It’s been a tough year for US craft brewers. Craft beer production declined in 2024, while closures outpaced openings. The Brewers Association (BA) recently reported that craft brewers produced 23.1 million barrels beer (27 million hl) in 2024, down 4 percent from 2023. This is the largest volume decline since the 2020 covid pandemic. Craft beer’s market share held steady at 13.3 percent of total beer volume, as the overall beer market also contracted by 1.2 percent. This indicates that craft beer is adjusting to a shrinking pie. Over the past year, craft beer’s total retail dollar value rose to USD 28.9 billion, a 3 percent increase. Craft accounted for 24.7 percent of total beer retail dollars. Seen against a backdrop of lower volume sales, this reflects successful price increases and strong taproom sales.
However, the brewery count dipped for the first time in nearly 20 years. At the end of 2024, there were 9,612 operating craft breweries, down from 9,730 in 2023. The BA counted 434 openings and 501 closures, a net loss of 67 breweries. The BA fears that 2025 could bring more pressure and consolidation.
Tariffs on Scotch whisky exports to the US were called “disappointing” by the Scotch Whisky Association (SWA) and could have a wide impact on the industry. Announced on 2 April by President Donald Trump, the UK is now facing a 10 percent blanket tariff on the exports of its goods to the United States, which has long been Scotch whisky’s biggest market by value. It was worth GBP 971 million (USD 1.3 billion) in sales to the industry in 2024. The new tariff rate also comes whilst the industry is still recovering from the 25 percent tariff that was imposed by President Trump during his first term and saw Scotch whisky firms lose a total of GBP 600 million (USD 790 million) in lost exports. The tariff was paused by the Biden administration. Local distillers have highlighted the damaging impact the Trump tariffs could have on sales, but also on wider profits from whisky tourism. If tariffs fuel inflation or restrict consumer spending in the US, this could lead to fewer golf travellers, fewer distillery visits and a knock-on effect on local jobs.
Japan’s Suntory “will produce and try to sell locally”. President Trump’s pause in his reciprocal tariffs was the latest twist in a period of uncertainty for many Japanese food and beverage exporters. However, the reprieve of the 24 percent tariffs could end in early July, while Japanese companies still have to deal with the earlier 10 percent tariff slapped on their products entering their most important market.
Tokyo-based brewer and distiller Suntory, the maker of Jim Beam bourbon, responded to Mr Trump’s tariffs by saying it will pivot its sales to where it makes its spirits. Suntory spent USD 16 billion in 2014 to buy US drinks firm Beam, which makes it a major player in bourbon (Jim Beam) and Scotch whisky (Ardmore, Auchentoshan, Bowmore, Glen Garioch and Laphroaig). The group also makes wine and Orangina-branded soft drinks in Europe, as well as Pepsi drinks and canned coffee in Southeast Asia. The firm is considering shifting Scotch whisky sales to Europe from the US, explaining that it was planning to double down on sales of American whisky in the US market to mitigate “more tariff war and tit-for-tat actions”.
Mexican tequila and Canadian whiskey exempt from US tariffs for now. Diageo, the world’s largest drinks firm, avoided the worst of President Trump’s chaotic trade policy this month. Not only were its Don Julio tequila in Mexico and Crown Royal whiskey in Canada spared additional tariffs – they are altogether exempt from import tariffs in the US under the United States-Mexico-Canada Agreement (USMCA), a free trade agreement which was negotiated by the first Trump administration and came into effect in 2020. Canada and Mexico continue to face the 25 percent tariffs Mr Trump levied earlier this year. Alcoholic beverages made in those countries, meanwhile, are exempt, because they are among USMCA-compliant goods. But it is not a given that this will remain so. The USMCA comes up for a legislated six-year review in 2026, so the current tariffs war could be a preview of things to come.
Diageo has sold its majority stake in Seychelles Breweries to Mauritius-based Phoenix Beverages for around USD 80 million. The owner of Guinness held a 54.4 percent stake in the only total beverage company in Seychelles, which also makes SeyBrew beer. Phoenix Beverages, which produces Guinness and Smirnoff Ice for Diageo in Mauritius, is a subsidiary of local conglomerate IBL Group. Diageo’s sale of its stake in Seychelles Breweries is the latest in a series of disposals in Africa as the firm has pivoted to an asset-light model on the continent.
Craft washing: Australian retailers are called out. Independent craft brewers are accusing the country’s two major retailers, Coles and the Endeavour Group, of craft-washing. By making their private label beers look like indie brands, they are driving small, independent brewers out of the market. Across big corporation-owned bottle shops, there are many beers featuring vibrant colours and retro designs that look like indie beers, but most people fail to realise they are just disguised supermarket beers. Some observers believe the surge in private label beers has resulted in craft brewery closures. A total of 20 independent breweries across Australia (out of some 600) have shuttered in the year to February 2024.
Because the Australian alcohol off-premise is basically a duopoly of Coles and the Endeavour Group, supermarkets’ own brands now control more than 5 percent of Australia’s beer market, while independent brewers have just 7 percent. Cash-strapped consumers “are now consolidating their purchases, and they are going direct to the bigger retailers, and then, surprise, surprise, bigger retailers’ brands are cheaper,” one craft brewer was quoted as saying.
Cannabis firm Tilray ceases operations at Hop Valley brewery. This could impact as many as 50 employees. The taproom in nearby Springfield will remain open. Tilray’s brewery portfolio includes some 20 brands. When AB-InBev and Molson Coors abandoned some of their craft breweries, Tilray jumped at the opportunity: Well-known craft beer brands including Redhook, Widmer Brothers, 10 Barrel, Blue Point, Revolver, Breckenridge Brewery, Terrapin, Hop Valley, and others are now under Tilray’s umbrella. Because Tilray’s main business is still cannabis and it is not a Big Brewer, the firm fits the Brewers Association’s definition of a craft brewer. As such, Tilray in 2024 ranked as the fourth- largest craft brewer in the nation, behind Yuengling, Boston Beer and Sierra Nevada.
Hop Valley Brewing was founded in 2009. In 2016, it was acquired by Molson Coors. At its peak, in 2021, the brewery produced 110,000 barrels beer. By 2023, output had declined to a reported 75,000 barrels beer. That was before it was sold to Tilray in the following year. Hop Valley’s beers will now be brewed at other Tilray-owned production sites in the region. The decision to shutter Hop Valley mirrors the February closing of Revolver Brewing in Texas. Already in September 2024, Tilray laid off the entire innovations brewing team at 10 Barrel in Oregon.
AB-InBev invests USD 1 million in craft brewer Wicked Weed in Asheville, North Carolina, which it acquired in 2017. The news coincided with the winding down of operations at its production facility in Portsmouth, New Hampshire, “over the next few months”. Having already shuttered Elysian’s production brewery in Seattle at the end of 2024, AB-InBev’s decision to also wind down operations in Portsmouth reflects a broader trend of operational consolidation. The Portsmouth facility, originally built by craft brewer Redhook in 1996 to look like Redhook’s west coast brewery in Seattle, was renamed Cisco Brewers in 2018, when under the ownership of Craft Brew Alliance (CBA). AB-InBev bought the rest of CBA it did not own yet in 2020.
Labatt shifts Mill Street’s production from Toronto to London, Ontario. Labatt Breweries is closing the Mill Street brewery in Toronto when the current ten-year lease expires later this year. The move will result in 39 job losses, but workers will be offered roles at other Labatt operations. Labatt bought Mill Street Brewery, a popular Toronto-based craft brewer, in 2015 for an undisclosed sum. In those days it brewed an estimated 100,000 hl beer. As part of the deal, Labatt invested CAD 10 million (USD 7 million) in Mill Street’s brewing operations. Founded in 2002, Mill Street is named after its original location at 55 Mill Street in the Distillery District. Its three brewpubs – at Pearson airport, the distillery district, and Ottawa – will continue to operate. It is a hard time in Canada’s craft beer industry, which has seen breweries close or acquired amid a tough economy and changing consumer preferences. The number of Canadian breweries exploded during a 2010s craft beer boom, jumping from 310 in 2010 to nearly 1,200 in 2020, industry group Beer Canada says.
Danish distiller Stauning in trouble after Diageo exits incubator Distill Ventures. Drinks firm Diageo is changing its strategy, which will hit the award-winning Danish distiller Stauning hard. At the end of March, Stauning had to lay off 13 of its 50 employees and cut production by half. The future looks uncertain, now that its main investor Diageo has backed out of its incubator Distill Ventures. The Danish firm does not know yet what Distill Ventures/Diageo plans to do with its 49 percent stake in the distiller. Making matters worse, Stauning has not turned a profit yet, which has a lot to do with the fact that the distillery’s products must mature for years before they can be sold. In 2015, Distill Ventures invested more than DKK 100 million (USD 15 million) in Stauning through its accelerator programme to help the firm expand production and keep up with rising demand.
Diageo has sunk over USD 320 million into its incubator since it was established in 2013, helping more than 35 fledgling businesses along the way. Apparently, no longer. On 13 March Diageo announced it will pull out of Distill Ventures. The decision has consequences far beyond Stauning. It is understood that some involvement will persist with a couple of the operations covered by the incubator – possibly prior to some form of acquisition – but it is bad news for most of the roughly 20 brands that were part of the programme before the plug was pulled.
Beer will likely get more expensive in Canada soon. The ongoing tariff rift between Canada and the US is set to raise the price of beer cans on both sides of the border. Industry group Beer Canada expects Canada’s beer industry to take a CAD 330 million (USD 230 million) hit this year. Canada provides about 70 percent of the US’s primary metals like aluminium, but it is mainly US manufacturers which turn the metal into cans, particularly the popular 473-ml tallboy cans. Because Canada’s retaliatory tariffs on US goods include aluminium products, beer cans will likely be hit with tariffs at least twice before making it to Canadians’ fridges.
The 25-year-old craft brewery Steam Whistle from Toronto, which uses more than 9 million tallboy cans per year, expects its packaging costs to rise by about CAD 1 million. Some 85 percent of beer in Canada is now sold in cans. With the cost of raw aluminium and finished cans going up, Canadian beer drinkers are likely to see price hikes, especially from smaller breweries that have less wiggle room to absorb the extra cost.
Number of breweries in Germany declines again. Massive cost increases are causing more and more breweries to go out of business. Over the past five years, the number of breweries has fallen by 93. This corresponds to a decline of 6 percent. According to the Federal Statistical Office, there were only 1,459 breweries operating in 2024. This past year alone, 52 brewery businesses failed. Up until the covid pandemic in 2020, the number of operating breweries had risen continuously, by a total of more than 250 businesses since 1994. The main reasons for the increase in the past decades were the craft beer movement and the wave of start-ups it triggered.