How is beer doing in 2024?
Originally written and published for Men’s Journal, January 2024
Beer news has been grim lately. The original craft brewery, Anchor, was put on the auction block by its owners—and it’s been sitting there for months. There are weekly stories of small brewers consolidating or filing for bankruptcy protection. And closer to home, you likely saw at least one local taproom close for good. Meanwhile, Gen Z doesn't carry on it's fore-drinkers' love of malted beverages, as last year beer consumption dropped to its lowest volume since 1999.
What the hell is happening to beer? Ask any industry veteran, consulting company, brewery, distributor, or bar owner what 2024 has in store for them and you could get every possible answer. The industry will go up, down, left, and right. Beer is dying. Beer is thriving. Beer needs a facelift. Beer is at the top of its game.
Well folks, I'm here for all of it, and as one of those beer industry veterans quietly suffering through the national malaise of Dry January (I supremely respect your decision not to drink alcohol, it's just not for me), I've got great news for you. Beer is gonna be just fine. Read on, thirsty patriot, and take solace in the frothy, cold, sagacious breakdown below.
So How Is Beer Doing in 2024?
Like anything worth pondering, the answer to that high-gravity question is complex. It's a hot, steamy mash of macro and micro-economic factors, consumer demand, and pricing in an industry that has quickly matured. Depending on the size of the business you're looking at, the answer also changes dramatically. More than 95 percent of breweries in the U.S. are quite small , and if you're one of those small breweries and you run a tight ship, you'll most likely be ok moving forward. I'm not saying the past couple years—or the next 18—won't have a lot of challenges (cost of goods, labor, and demand being just a few of them), but broadly speaking, it shouldn't break the bank. If you're the world's largest brewer, Anheuser-Busch InBev, and you lost 26 percent of the volume on your most important brand in the past 12 months (Bud Light), then you're singing a different song at this point. Luckily, Bud Light’s problems are not craft beer’s problems.
I want to establish a nearly irrefutable fact: People really, really love beer. This has been true for roughly 10,000 years, and given the amount of beer consumed every single day, this is still very, very, very true. Just because we're guzzling less volume and drinking a wider variety of alcoholic beverages in general (I've personally been on the cocktail train for a bit, and it's been a blast so far), doesn't mean our affinity for the world's greatest drink has subsided. Beer has endured it all, and grown through it all.It's all part of the ride in a cyclical business. We love beer, and we will keep loving beer.
There are powerful and relevant factors impacting beer's performance in the market, as I mentioned above. The cost of doing business has increased rather dramatically in a short amount of time. Everything has gotten more expensive to produce, and employing people to produce those goods has also gotten more expensive. Couple that with a relative leveling of overall demand, a highly competitive market, a whittling down of available options on the shelf from major retailers, and you've got a noticeable headwind on your go-to-market strategy. I'm not saying it's easy out there by any means.
But the Breweries Are All Closing!
Are they? They're ALL closing?
Reality check: They're not all closing. Some are closing. More are still opening. By the best estimate, roughly 420 breweries opened last year, while at least 385 closed. That's a big change from five years ago, when there were almost five times as many openings as closings. But the good news is that there are still more than 9,000 breweries pouring pints, and most will continue doing just that for the foreseeable future. The slower overall industry growth is a sign of the times, but it's also just the evolution of the beer business. Companies open and close all the time, and not all of them make headlines.
The Craft Beer Industry Has (Finally) Matured
A mature industry has a relatively equal number of entries and exits. At the beginning of any particular industry maturation, there can be a shake-out separating successful from unsuccessful companies, and that's what will continue to happen moving into 2024. I’m already on the record saying this, but I think another 500 U.S. breweries will close over the next 12-18 months. Why? 90 percent of the time it's business mismanagement. These breweries will almost always close for preventable reasons, and this shakeout leaves a little more room for everyone else to thrive, grow, learn, and hone their products, services, and market position. There will be plenty of cases where factors outside of a brewery's control cause them to shut down, but these are fringe cases when you look at the whole pie.
Beer has been on a euphoric, amazing, spectacular run for nearly 15 years. In that time, craft beer saw year after year of double-digit growth as an entire generation of Americans, beginning with my fellow elder millennials and I, cut their teeth on more hops, malts, and beer styles than every previous generation in American history. We were soaked in great beer, and it's only gotten better. The U.S makes the best beer in the world now (I'll die on that hill), and for any beer drinker out there, 2024 remains a golden age of choice, quality, and variety.
The proverbial tide has stopped its inexorable rise, and with it, we will lose a lot of the businesses that might be in beer for the wrong reasons. If you run a brewery, it’s a great time for soul-searching and assessing your strategy.. I’ve worked in the beer business for 15-plus years now in many different roles across commercial strategy, marketing, and education. Through my brand consulting and digital design company here at The Brew Enthusiast, I have this conversation with clients all the time: It’s a great time to examine your whole business and find your soft spots. Make better beer. Use better technology. Invest in yourself, your people, and your processes. You'll be well-positioned in a couple years to take all the demand that exists in spades out there. From a beer drinker’s perspective, a more competitive market means everyone has to step up their game and that means better quality, competitive pricing, and a better experience every time you grab a pint.
Keep the Faith. Go Have a Beer.
Will there be less great beer to drink in 2024? Are all your favorite American adjunct lagers, barrel-aged stouts, funky saisons, foeder-aged Czech lagers, and 3 pounds-per-barrel IPAs going to vanish from the store shelves, only to replaced by a hodgepodge of High Noons, White Claws, THC-infused bubbly drinks, and every other non-beer bev-alc option under the sun?
No. Fantastic beer, in all shapes, sizes, styles, prices, and formats, is here for the long haul. While there might be slightly fewer great beers at your local grocery store, that just means you'll have to stop into the brewery and grab it fresh once in a while. A cheeky pint and a 4-pack on your way home—what's better than that?
