The craft beer industry is navigating a complex landscape midway through 2025 as volume declines continue, with nearly half of breweries reporting production growth while closures persist across the sector. Industry data underscores both challenges and opportunities shaping the market.
Craft Beer Volume and Brewery Counts Decline
According to the Brewers Association midyear 2025 report, craft beer volume fell 4.1% in the first half of the year, slightly outperforming overall beer’s 4.2% decline (Brewers Association, 2025). The U.S. craft brewery count also dipped by 1% to 9,269, with closures outpacing openings for the third consecutive year (Craft Brewing Business, 2025). Wholesale distributor demand remains weak, as evidenced by a Beer Purchasers Index score of 15—well below the 50 threshold for growth—signaling distributor reluctance to support craft brands (Craft Brewing Business, 2025).
Off-Premise Channel Pressure and Consumer Spending
Retailer and wholesaler rationalization, intensifying competition for shelf space, and tighter consumer spending are constraining craft beer sales, especially in the off-premise channel where the majority of volume is sold (Brewers Association, 2025; The Drinks Business, 2025). Despite volume setbacks, nearly half of survey respondents—especially small on-site taprooms and brewpubs producing under 1,000 barrels annually—reported growth, highlighting a bifurcation in the market (Brewers Association, 2025).
Small Brewers and Brewpub Models Gain Relative Strength
While large and regional breweries face volume pressure, smaller taprooms and brewpubs have maintained more positive production trends, representing an outsized share of craft businesses—73% despite only 15% of overall industry volume in 2024 (Brewers Association, 2025). These models benefit from direct consumer engagement and local market dynamics that help offset broader distribution challenges.
Market Trends Driving Innovation and Diversification
The craft beer sector is also evolving with growing consumer interest in wellness and experimentation. Rising health consciousness is shifting demand toward non- and low-alcohol beers as brewers rapidly innovate in these categories (IMARC Group, 2024). Moreover, hybrid styles and cold IPAs continue to shape brewery portfolios, while sustainable brewing practices gain traction, albeit remaining nascent (Escarpment Labs, 2024).
Cannabis-Infused Beverages Emerging as a ‘Fifth Category’
Significant growth in cannabis consumption in the U.S. is influencing beverage trends, with cannabis-infused drinks gaining interest alongside craft beer in certain states. Minnesota’s recent legalization for THC-infused taproom drinks exemplifies a bridging between the cannabis and craft beer industries, though this category remains in early, data-scarce stages (Hop Culture, 2025).
Industry Outlook and Strategic Implications
For craft breweries, lean operations, focus on taproom sales, and local partnerships are essential strategies amid distributor pullback and shifting consumer patterns (Craft Brewing Business, 2025). Diversifying product portfolios beyond traditional beer, including non-alcoholic and cannabis-infused beverages, offers pathways to sustain growth in a competitive landscape.