Why are so many craft breweries closing?

An industry that exploded 500% in a decade—9,500 breweries chasing Millennial dollars—now closing faster than opening as every tailwind turns to headwind.

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By The Numbers

9,500

breweries by 2020

399

breweries closed in 2024

335

new breweries opened in 2024

What They Nailed Early

Craft brewing rode a perfect storm: Jimmy Carter legalized home brewing in 1978, unleashing hobbyist nerds who discovered European flavor. By the 2010s, cheap capital met Millennial demand for community and uniqueness. Industry grew 500% in a decade.

What Changed

COVID permanently changed behavior—people stopped leaving home. Inflation spiked input costs 20-40% while Millennials aged out of prime drinking years. Gen Z doesn't care about craft beer. Capital got expensive. The industry is overbuilt with airplane economics: a few percentage points of lost demand means bankruptcy.

Where it Landed

First-ever net closures: 399 shut versus 335 opened in 2024. Consumption flat, but margins crushed. High-profile names like Anchor Brewing sold as hobby projects. The boom is over.

The Principles

Tailwinds don't last forever. Demographics, cheap capital, and consumer trends that built you can reverse fast—smart operators exit before the tide turns.

Airplane economics are brutal. High fixed costs mean a 10% demand drop can flip you from profit to bankruptcy when you're capacity-constrained.

Generational bets are fragile. Millennials loved craft beer; Gen Z thinks it's fake. If your model depends on one cohort, plan for the cliff.

Builder's Takeaway

If you're riding a boom, watch for these reversals:

•

Cheap capital fuels overbuilding—when rates rise, the weakest operators die first

•

Demographic tailwinds age out—plan for the generation behind to want something different

•

High fixed costs = no margin for error when demand softens even slightly

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