Beer industry in decline as craft breweries face higher costs

For the first time, more craft beer breweries are shutting down than opening up.

Breweries and taprooms are dealing with rising supply costs while demand for beer is slipping, according to the Brewers Association.

Bart Watson is the president and chief executive officer of the Brewers Association. Watson said things got worse for many craft breweries during the COVID-19 pandemic.

“The pandemic obviously also had secondary ripples for the economy, for supply chains and it changed consumer patterns overall. We are seeing people certainly spend as much at bars and restaurants as they did before, but they are doing so in different ways – more to go and delivery.”

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Last year, beer sales dropped 2% nationwide, and in Colorado, beer sales fell by over 3%, according to the Colorado Liquor Enforcement Division.

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Even though Colorado has the fourth most breweries of any state, right behind Pennsylvania, New York, and California, it saw some of the highest number of closures last year, according to the National Brewer Association.

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“Some of the most challenged regions are some of the most developed, like here in Colorado, the pacific northwest, the west coast in general,” Watson said.

Patrick Toland is a manager at Cabin Creek Brewing. Toland said they opened their brewery in May 2020. Cabin Creek is located in Georgetown, Colorado, which is a city about an hour west from Denver with just over 1,000 people.  

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“The cost of raw materials-especially for the beer [and] the grain has increased. The shipping has massively increased,” Toland said. 

This February, Cabin Creek Brewing, became the sole brewery in Georgetown after a nearby brewery closed. Toland said he’s kept the doors open by raising prices and expanding the menu.

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“A lot of big brands are aligning with trend setting on social media in terms of offering non-alcoholic or alcohol alternatives. We have had to do the same,” Toland said.

Even though Colorado has the fourth most breweries of any state, right behind Pennsylvania, New York, and California, it saw some of the most closures last year, data shows.