The Brewers Association, a trade association representing small and independent1 American craft brewers, released annual production rankings for the U.S. craft brewing industry.
Boston Beer, which owns Milton-based Dogfish Head, ranks as the No. 2 craft brewer behind Pennsylvania’s Yuengling. Family-owned Yuenging and Boston Beer continue to be classified as craft brewers despite their size. According to the asssociation, the two brewers qualify, since a non-craft beer company does not own a large chunk of their stock. Boston Beer accounts for only 4% of the nation’s beer market.
No other Delaware breweries made the top 50 list. Delaware has more than 30 breweries, despite a few closings.
Dogfish Head has been squeezed by competition from industry giants that have aquired craft breweries, one example being Anheuser Busch Inbev, which owns Chicago’s Goose Island, along with hyperlocal brewers in Delaware and other states. Delaware has upwards of two dozen craft brewers with a few in expansion mode.
Dogfish Head founder Sam Calagione said previously competitive pressues were a factor in Dogfish being acquired by Boston Beer. Dogfish has seen a decline in volume, due in part to the strategy of not resorting to heavy discounting to build market share. Calagione and his wife Mariah remain stockholders in Boston Beer as part of the $300 milllion buyout, with the Milton brewery and its brewpub in Rehoboth rolling out specialty and short-run offerings.
Boston Beer has a major presence in seltzers, ciders and teas.
Craft brewers have also merged or formed colletives, one example being Artisinal Brewing Ventures, which owns Delaware Valley-based Victory Brewing.
In 2022, small and independent brewers collectively produced 24.3 million barrels of beer, on par with 2021’s numbers, and craft’s overall beer market share by volume grew to 13.2%, up slightly from 13.1% the previous year. This came despite the overall beer market shrinking by 3%.
Openings decreased for a second consecutive year, with the continued decline reflecting a more mature market. The closing rate increased in 2022 but continued to remain relatively low, at approximately 3%. Many of these closings came from brewpub chains that have closed locations, One exception is Iron Hill, which continues to open brewpub locations in the South.
Iron Hill was founded in Newark and is now based in Exton, PA.
“The relatively low closure rate reflects both the solid demand for fuller flavored local beer as well as the versatility and flexibility of small brewers,” Watson stated.
|1||D. G. Yuengling and Son Inc||Pottsville||PA|
|2||Boston Beer Co||Boston, Milton||MA, DE|
|3||Sierra Nevada Brewing Co||Chico||CA|
|4||Duvel Moortgat USA||Paso Robles, Kansas City, Cooperstown||CA, MO, NY|
|5||Gambrinus Company||Shiner, Berkeley||TX, CA|
|6||Artisanal Brewing Ventures||Dowingtown, Lakewood, Brooklyn||PA, NY, NY|
|8||CANarchy||Longmont, Tampa, Salt Lake City, Comstock, Dallas||CO, FL, UT, MI, TX|
|9||Tilray Beer Brands||Atlanta, Montauk, San Diego||GA, NY, CA|
Sales growth was stronger than volume due to pricing and a larger piece of the pie from smaller brewers — who are more likely to sell onsite and via distributed draught. Also a factor is a continued shift back to more lucrative on-premise sales at bars and restaurants.
Craft brewers accounted for 189,413 direct jobs, a 9% increase from 2021, driven by growth in breweries and a continued shift to hospitality-focused business models.
“2022 presented small brewers with a number of challenges, including rising operating and material costs and increasing competition, particularly in distribution,” said Bart Watson, chief economist of the Brewers Association. “In this maturing and competitive market, collective growth for the category is hard to come by.”
The maturity trend has included a smaller population of younger people, a prime beer market. Younger drinkers have also moved over to distilled spirits. Older drinkers have also fueled a shift toward whiskeys.
The number of operating craft breweries continued to climb in 2022, reaching an all-time high of 9,552, including 2,035 microbreweries, 3,418 brewpubs, 3,838 taproom breweries, and 261 regional craft breweries. Big brewers also tapped into the market for low-calorie beers that many craft brewers avoid, the one exception being Dogfish Head.
The total U.S. operating brewery count was 9,709, up from 9,384 in 2021. Throughout the year, there were 549 new brewery openings and 319 closings.