We are just days from 2024, so let’s review 2023, with most of the following data courtesy of the Brewers Association, a not-for-profit trade association dedicated to small and independent American craft brewers.

It would appear that the past year was a mixed bag for craft brewing. While year-end final numbers are not quite available yet, indicators point to production being down in 2023, which would be the first time (not counting the COVID-flattened 2020) that independent brewers have seen such a decline.

Craft beer also saw an ongoing shrinkage of market share in the alcoholic beverage category. The BA attributes this decline to several factors, including pricing, demographics, and marketing/branding. Bart Watson, chief economist for the Brewers Association, still put a positive spin on the middling news.

“While many individual businesses are struggling, there is good news in the continued overall popularity of the category. Yes, things are more challenging, but independent brewers still sell more than one out of eight beers in the United States; beer drinkers spend roughly one out of four of their beer dollars on a beer from a small and independent brewer; and the industry remains a source of jobs and community across the country,” he said in a statement.

Two prominent factors appeared again, contributing to the complexity in the craft beer industry: supply chain complications and issues related to climate change. Despite supply chain difficulties being somewhat less drastic than prior years, ongoing disruptions caused by climate change posed hardships for brewers throughout the year.

The environment influenced two primary ingredients used in brewing: barley and hops. The North American barley yield in 2023 exceeded 2022’s harvest, but still fell below the average of the past five years. Barley suffered from both below-average rainfall and above-average heat, particularly in Canadian prairie provinces and certain areas of Montana.

Although American hops production experienced fewer disruptions, the production of European hop varieties declined. Reflecting the broader trend of the year, it was a case of one step forward and one step back.

Nonetheless, a proposed bill – the United States Postal Service (USPS) Shipping Equity Act – could make a significant difference for craft brewing. This legislation aims to provide USPS with permissions equivalent to those of private carriers, allowing them to deliver alcohol in states where such delivery is legally permitted.

“While the Brewers Association, along with state guilds, will continue to fight for additional market access in areas such as direct-to-consumer shipping, many of craft’s current challenges will require new strategies to reach new and existing customers in new occasions with new flavors and innovations,” Watson said. “To grow in 2024, small brewers can work to take share within the same pie or grow the pie in new ways.”

This makes the legislation beneficial to breweries, consumers and the postal service.

That sounds like a win-win-win to me.

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