The craft beer business is still in a shakeout phase that began in 2023, with volumes declining and brewery closures outpacing openings for the third year in a row. Notable closings during the year included Rogue Ales & Spirits (multi-state footprint), Iron Hill Brewery (Mid-Atlantic/Southeast brewpub chain), Sanitas Brewing Company (Colorado), and 21st Amendment Brewery (California).
Analysts point to a number of factors in the craft beer slowdown, including commodity costs, slowing taproom traffic in some markets, and consumers drinking beer less often or shifting to other formats rather than abandoning beer entirely. The rising costs of ingredients, labor, and products are also factors, as well as the crackdown on illegal immigration. An increase in the percentage of beer drinkers choosing zero-alcohol versions is also considered a headwind to craft beer demand.
“If the craft beer industry is a ship, we can comfortably say we’re no longer in the safety of a harbor. The days of relative calm are behind us, and brewers are getting their sea legs in this new, challenging open water,” highlighted Matt Gacioch, staff economist at the Brewers Association. “Changing consumer behaviors, retailer rationalization, cost increases due to inflation and tariffs, and more competition than ever have been compounding difficulties in 2025. And still, brewers are stepping up to meet today’s challenges head on by adjusting their offerings and, sometimes, their entire business models,” he noted.
The 2026 craft beer industry outlook is for another small volume decline, continued closures and consolidation, but gradual stabilization as weaker players exit and stronger, focused, taproom-centric breweries adapt business models and product mixes to new consumer preferences. There is also the expectation for more M&A as larger players make strategic plays.
The Brewers Association noted that while many of the headwinds facing the craft beer industry are unlikely to disappear in 2026, there may be reason for cautious optimism due to falling interest rates and Supreme Court guidance on the legality of certain tariffs. On the demand side, recent surveys indicate that consumers are expecting to socialize more in the year ahead, which could be a positive for craft beer sales.
Tilray (TLRY) is a major player in the craft beer industry after buying eight U.S. beer and craft-adjacent brands from Anheuser-Busch InBev (BUD) and four from Molson Coors (TAP). Boston Beer (SAM) is still considered a craft beer leader even after its beverage portfolio has diversified.