Despite some headwinds for the U.S. beer industry, the number of operating breweries continues to grow rapidly.
After surpassing a record high of 5,000 in 2016, active breweries will likely total 7,000 by the end of 2018. This is according to Bart Watson, Brewers Association chief economist, who shared his forecast last week during the California Craft Brewers Association’s Craft Beer Summit, Expo and Beer Festival in Sacramento.
While U.S. breweries have not yet reached 7,000, Watson believes the momentum of the industry means that milestone is now a near lock. The number of active permits for breweries registered with the TTB is currently 9,000.
Those totals are impressive in scope, but not necessarily conducive to better sales.
“There’s a lot of growth out there, but it’s not being realized by everybody because there are so many companies competing for that growth rate,” Watson said during his opening-session talk. He believes that mid-single digit growth numbers, as craft beer realized during the first half of this year, are now more of the norm, rather than the explosive growth of past years.
He worries that the regional craft beer market is already saturated, making growth difficult, or at the cost of other regional producers. Although sales at craft brewery’s tap rooms have risen significantly, the appeal of drinking “local” has lost some luster, Watson argued, due to increasing competition, which now includes many local wineries and distilleries.
Watson also said that states with legal cannabis have actually experienced better beer sales than those that lack pot laws.