CO2 Prices Hit Craft Breweries Hard
Craft beer businesses are struggling under the weight of soaring CO2 prices, which have climbed from 94 cents per kg in 2021 to $4.30 per kg in 2025 (1News, 2025). CO2 is essential for carbonating beer and preventing spoilage, but dwindling gas reserves and the temporary shutdown of New Zealand’s Kapuni plant in 2023 have driven prices up and supply insecure (1News, 2025). Brewers like Nathan McKenzie from Hopsession Brewing in Invercargill say they are receiving bills that seem impossible to pay, with suppliers confirming the new rates are not a mistake (1News, 2025). Simon Ross of Rhyme and Reason Brewery in Wānaka added that consumer reluctance to pay more for a pint is compounding the problem, as breweries face multiple cost pressures (1News, 2025).
US Craft Beer Market Shrinks in 2025
In the United States, the craft beer sector continues to contract. As of June 2025, there were 9,269 craft breweries operating, down 1% from the previous year (Craft Brewing Business, 2025). Microbreweries saw a 3% decline, and overall craft beer production dropped by 5% year-over-year (Craft Brewing Business, 2025). Distribution-focused breweries were hit hardest, while taprooms and brewpubs fared slightly better (Craft Brewing Business, 2025). Despite the downturn, 49% of brewers reported production growth, with the smallest breweries producing under 1,000 barrels per year faring best (Craft Brewing Business, 2025). The number of craft beer drinkers has increased, but frequency of consumption is down, reflecting broader economic pressures and changing consumer habits (Craft Brewing Business, 2025).
Beer Industry Calls for Regulation of THC Beverages
The American beer industry is pushing for federal regulation of THC-infused beverages, citing concerns about marketing to children and public health risks (Marijuana Moment, 2025). The Beer Institute and other trade groups argue that the current regulatory environment allows “bad actors” to exploit loopholes in the 2018 Farm Bill, leading to the sale of highly potent, unregulated THC products (Marijuana Moment, 2025). Minnesota Attorney General Keith Ellison and 38 other state attorneys general have urged Congress to clarify the federal definition of hemp (Marijuana Moment, 2025). Meanwhile, some small brewers are entering the hemp beverage market, creating alcohol-free THC-infused drinks as a response to shrinking beer sales (Marijuana Moment, 2025).
Non-Alcoholic Beer Sees Explosive Growth
Non-alcoholic beer is experiencing a surge in popularity, with sales up nearly 30% in 2025 and now accounting for 1% of the beer market (American Craft Beer, 2025). This growth is driven by rising consumer health awareness and a shift toward premiumization and sustainability (Packaging Dive, 2025). O-I Glass, a major packaging supplier, notes that while beer and wine sales are declining, there is growing interest in non-alcoholic beverages and food (Packaging Dive, 2025). The trend reflects a broader change in consumer preferences, with younger drinkers exploring new categories and older drinkers cutting back due to health or budget concerns (American Craft Beer, 2025).
Industry Events and Innovation
The 2025 California Craft Beer Summit, taking place from November 10-12, will bring together brewers, thought leaders, and innovators to discuss strategies for thriving in a challenging market (San Diego Beer News, 2025). The event will feature keynote conversations, educational sessions, and a tradeshow floor highlighting new products and services (San Diego Beer News, 2025). The Craft Brewers Conference 2025 in Indianapolis also drew nearly 8,000 industry professionals, offering networking, education, and insights (Brewers Association, 2025). These events underscore the industry’s focus on innovation and adaptation in the face of ongoing challenges.