in 2012, time Magazine Published an article titled “Your Own Wine: The Microbrewery Boom,” heralding the rise of locally sourced, handcrafted, small-batch breweries popping up across the United States. At the time, there were 250 craft breweries in the country — there were only about 50 in 2005 — and the article boldly asserted that in just 10 years, that number could exceed 1,000.
Ten years later, there are more than 2,600 craft breweries in the United States, and industry observers believe this is just the beginning. Outlets such as absorb Magazine 2022 headlines declare: “Craft distilling is booming and just getting started,” some analysts predict 29% CAGR over the next ten years.
Recent headlines tell a different story: reports of dozens of breweries closing New York, DCand span South. Exceed 20 breweries Closed in New York over the past few years— America’s second largest state As with most craft breweries, 50% of brewery owners in the Empire State either expect to close by the end of 2025 or are unsure whether to continue operating after that time.
In the world of craft distilling, things are far from plain sailing. Unsurprisingly, the COVID-19 pandemic has Industry back on track, as breweries were forced to close for a period of time, delaying or canceling expansion plans and furloughing large numbers of employees. Many have also honorably turned to producing hand sanitizer to help address the nationwide shortage, and for their sacrifice, they received Years of harassment from the Food and Drug Administration.
Like a wobbly boxer in a boxing ring, the craft brewing industry initially seemed to weather the blow and even continue to grow in the wake of the coronavirus pandemic. Now it faces another potential elimination game. Not just alcohol sales decline In general, in the United States, younger generations are showing increasing interest in low- and non-alcoholic beverages, but the growth rate in the number of craft breweries fall down By 2023, the growth rate will fall to 2.4%, down from the previous year’s growth rate of more than 17%.
Although some blame market saturation The main culprit for this sudden shift is cumbersome laws and regulations. As competition intensifies, many alcohol wholesalers are becoming less interested in adding craft spirits to their product portfolios. Given that almost every state is three-tier system When it comes to alcohol distribution, brewers are legally required to work with these government-imposed middlemen in order to get their products on retail shelves.
exist control statethe government serves as the wholesaler and sometimes retailer of all distilled spirits, and distilleries must submit their spirits to selection committee A final decision will be made on whether to allow sales in state-run stores. If they refuse, a brewery could be shut out of the entire home market in one fell swoop.
One promising approach is hard seltzer craze This could provide a lifeline to craft distilleries interested in making canned cocktails. but too high Tax rates and grocery store sales ban In many states, canned, spirit-based cocktails are expensive to produce and difficult to sell through normal channels.
Another obstacle is the laws in many states that severely limit the amount of spirits a distillery can serve to customers—sometimes as little as 3 ounces every visit.
Clearly, the real problem for the craft beer industry is basic market access. When a business cannot get its products in front of consumers and into their hands, it has a hard time surviving in the long term.
One immediately available solution is to allow breweries to sell products directly to consumers via mail-order shipping, called direct-to-consumer shipping. If you handcraft jewelry and can’t get a local jeweler to represent your products, you can set up an Etsy account and instantly unlock new market access; the same goes for local bakers, jam makers, or just about any other craft producer.
However, all wineries except small-scale wineries are not allowed to engage in direct-to-consumer sales. few states. In comparison, direct-to-consumer wine shipping is Legal in almost every state— in many cases for more than a decade. main be opposed to expected from alcohol wholesalers, who appear determined to defend their government-mandated middleman role at all costs.
Although many wholesalers had little interest in selling handcrafted goods in the first place, they actively pushed to stifle direct-to-consumer reform efforts in the following ways: peddling issues despite the existence Empirical Research In contrast to.
Craft breweries have been arbitrarily cut off from much of their customer base due to a series of outdated protectionist government policies. No wonder they started going bankrupt.
