Beer Marketer's Insights - Indie Craft Production Off Just 1% in 2023, BA Sez; Top 50 Near 1/2 of Volume; 51% Capacity Use

Small and independent US craft brewers produced about 23.4 mil bbls in 2023, "another competitive and challenging year," Brewers Assn chief economist and strategy veep Bart Watson shared today. That's down around 1% vs 2022, apples-to-apples, and "a little bit worse than last year," Bart commented. Org revised its 2022 craft production estimate downward from the slightly positive side of flat to the negative side. This yr's reported trend may be "more positive" than some expected, he acknowledged. That's driven by a "set of brewers that are maybe priced below where typical craft brewers may be," driven by largest indie craft brewer for BA, Yuengling, plus fast-growing non-alc beer. By BA's metrics, small & indie craft brewers gained share last yr, with total beer down just north of 5%. (Recall, our estimates for craft are substantially softer.)Top 50 Over 11 Mil Bbls, Near 1/2 of BA Craft Production Also released today, the list of the 50 largest BA-defined craft brewing companies features "a lot of familiar names," Bart commented, led by Yuengling, followed by Boston Beer and then Sierra Nevada. Those 3 players produced around 4.9 mil bbls last yr, we estimate, or over 20% of BA craft volume, while the top 10 was about 1/3. In total, the top-50 BA-defined craft cos likely in realm of 11.2-11.3 mil bbls, we estimate, or a little less than half of total BA volume. Another 9,600+ cos contributed the other 12+ mil bbls.The most notable departure from this yr's BA top-50 is Stone, which recall sold to Sapporo. It was the #7 indie craft co in 2022. Tilray ranks as #6 on this list, but is poised to be much higher at the end this year, Bart explained. That's because the brands the co acquired from AB only counted toward Tilray's total when the deal closed in Oct. Duvel Moortgat USA, including part-owned Firestone Walker and wholly owned Boulevard, ranks #4 on BA's list, followed by Gambrinus. Artisanal Brewing Ventures is #7, ahead of Brooklyn, Monster and Athletic, up 3 ranks to #10 on this list.Big Rank Bumps for Pittsburgh, Jacks Abby, Fiddlehead Pittsburgh Brewing posted the biggest jump in rankings, up 10 spots to #21, ahead of Rhinegeist and behind 3 Floyds. That suggests the maker of Iron City, among other brands, produced around 110K bbls last yr, up around 25% from 2022. MA's Jacks Abby jumped 9 rankings to #38 last yr, tho much of that growth is seemingly from addition of Night Shift as an alternating proprietorship. Fiddlehead famously flew in 2023, gaining 8 rankings on BA's list to #28. Allagash and Georgetown each moved up 5 ranks to #15 and 16.Growing Number of Brewing Groups; Sizable Slips One of key "patterns" in the top-50 list this yr includes the "continued emergence of groups" representing multiple craft brands and facilities, Bart noted. (Recall, our own list of top craft players, including major brewers, published Mar 1, highlights the same pattern.) At least 16 of the top-50 players have formed thru M&A or strategic partnerships, not counting another half dozen with notable contract brewing bizzes. That includes 6 of the top-10, underscoring the growing importance of portfolios to achieve scale in craft.Other groups of note include FX Matt, after its acquisition of Flying Dog and Harpoon's growing cadre of brands. Two groups, Great Frontier (including Ninkasi and Ecliptic) and United States Beverage (Uinta, Captain Lawrence) appeared on the list for the 1st time. So did Drake's, ranking #49, after its acquisition of Bear Republic. Montucky Cold Snacks appeared at #40, tho its production in 2022 was also large enough to rank in the top-50. After solid growth, Coronado also joined the list at #48.Plenty of top players also struggled last year, sliding back in the rankings. None fell further than contract producer and maker of Boxer and Mountain Crest brands, Minhas, down 14 ranks to #29. MN's Summit fell 11 ranks (tho that could include a restatement of prior year reported volumes, CBN understands). The relatively new brewing group known as IndieBrew, comprising Scofflaw and Bearded Iris, fell back 5 slots to #50, suggesting flat-to-declining volume in 2023, we estimate. And another group, Made by the Water, which ranked #50 in 2023, no longer made the list this time after that co's difficulties.Still Biggest Brewery Count Ever; Lowest Capacity Utilization in Years Close to 9,700 indie craft breweries operated at some point in 2023, according to BA count. That's still up a bit, hitting another record. The count includes 3,900 taproom breweries, almost 3,500 brewpubs and well over 2,000 microbreweries. Not quite 500 breweries opened last year, while 418 breweries closed their doors. That puts closing rate at about 4%, BA shared, still a relatively low number. "Even as growth has downshifted, small brewers have proved quite resilient," Bart said.He works to exclude beyond beer volume from these numbers, so craft-produced seltzers, ciders and more would expand total number for craft (and recall, seltzer trends particularly soft last yr). Yet somewhere around 650 craft brewers now have permits to make distilled spirits, Bart shared. That doesn't mean all of them are using those permits. But small brewers keep diversifying, seeking new ways to use existing capacity. Indeed, only 51-52% of existing craft capacity was put to use in 2023, Bart estimates. Down from 54% in 2022. That estimate a bit rougher than production total, but it's still very likely that last yr it was the "lowest" BA measured since Bart started at org over a decade ago.

Indie Craft Production Off Just 1% in 2023, BA Sez; Top 50 Near 1/2 of Volume; 51% Capacity Use

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