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The Craft Beer Boom Has Gone Flat

Aug 01, 2017

Brewers are making more craft beer than ever, but the days of the industry's explosive growth may be nearing their end.

Mid-year figures from the Brewers Association, the trade group for independent brewers, shows that American craft beer production volumes increased 5% in the first half of 2017.

That's slightly less than 2016's mid-year increase of 8% and notably lower than the 16% mid-year production increase of 2015.

Craft beer's chill may not be all that surprising, says officials.

"The growth pace for small and independent brewers has stabilized at a rate that still reflects progress, but in a more mature market," says Bart Watson, chief economist of the Brewers Association. "Some breweries are continuing to grow, whereas others are having to evolve their position and nurture new opportunities to ensure they keep pace."

Over the past two years, the number of breweries in the U.S. has increased almost 50%. As of June 30, there were 5,562 breweries operating in the U.S., 900 more than there were at this time last year. And another 2,739 breweries are in the planning stage, says the Brewers Association.

"Craft brewers are beacons of innovation, revitalization and collaboration," says Watson, who notes that the businesses contributions to the overall economy are significant and invaluable. "From reforming the federal excise tax to ensuring the right to free and fair market access, opportunities exist to help craft brewers continue to thrive," he adds.

But analysts are a bit more cautious. Last week, Goldman Sachs downgraded Boston Beer Co. (sam), maker of Samuel Adams, to "sell" citing concerns about slowing U.S. beer volumes.

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