“For a while it was a very good time to be brewing beer in Chicago . . . but for the last year, things flipped…Not all breweries are going to make it.” Half Acre Founder Gabriel Magliaro to Crain’s
After years of double-digit growth craft beer’s momentum is slowing, fueling worries of rising craft beer closings. And some cities will be hit worse than others in 2020. Established brewing hubs like Denver, Seattle and San Diego are of course vulnerable…But so is Chicago.
Chicago and its near suburbs currently has an estimated 230 craft breweries online according to the Hop Review. That’s up from 157 in 2015.
And with the craft beer business slowing, the state’s craft beer industry which employ 21,468 people and generate $3.2 billion in economic impact according to the Brewers Association, is facing what could be a difficult 2020.
Chicago has been hit especially hard by the wider slowdown in craft beer….US sales grew 2.8 percent to $4.3 billion last year according IRI, a leading US market research company…down from 18 percent growth in 2015.
And as IRI’s beer, wine and spirits analyst Patrick Livingston explained to Crain’s Chicago Business, that leaves the nation’s third biggest city particularly susceptible to brewery closings in the coming year…
“Chicago is one of the leading decliners for craft beer because Chicago is a very well-developed craft beer market…There is more to lose here.”
Craft beer, which has been challenging global brewers like Anheuser-Busch and Molson Coors for almost two decades, has mainstreamed. And as part of that progression lost some of its perceived coolness especially with younger consumers who grew up with craft beer almost always being a given…the same demographic that is currently driving the emerging hard seltzer sector.
“We have some projections showing the hard seltzer category eclipsing the entire craft beer segment by 2022,” Livingston added, and unfortunately he may be right.
“The craft brewing industry is adapting to the new realities of a mature market landscape,” said Bart Watson, chief economist, Brewers Association.
And brewers in successful craft beer bastions like Chicago are now facing a more challenging economic landscape.