Craft Beer Biz Predictions For 2018

The thing about predictions is that many of them are so damn “predictable,” – continuations of already existing trends that have finally reached critical mass.

And much of what we expect to see coming down the pike this year has been brewing for a while now, but that doesn’t mean these won’t be consequential…

More Brewery Closings As Craft Beer’s Growth Slows

In 2017 the number of breweries operating in the United States reached an all-time high. And with more than 6000 breweries currently online and craft beer’s growth slowing (6% in 2016) we expect the number of brewery closings to rise in 2018.

Things could get particularly dicey for the nation’s larger craft breweries. According to the Brewers Association 25 of the top 50 saw their fortunes slow in 2015, and we expect to see (at the very least) some tactical retrenchment in that segment this year.

Big Beer’s Acquisition Strategy Will Accelerate Globally In 2018

AB InBev’s craft beer acquisition strategy is clearly working for them. Having finally completed their merger with SABMiller in 2016, they are more powerful than ever, and now oversee more than 400 beer brands…

And while they may be slowing their buying spree in the states (for now) in an effort to consolidate their holdings and their employees (their High End division eliminated hundreds of jobs last September) AB InBev’s international acquisition strategy appears to be accelerating.

At the end of 2015, AB InBev stirred things up in England when they purchased the popular Camden Town Brewery…

Late in September they purchased 4 Pines, their first craft beer property in Australia. And at the end of November they shocked Australia’s craft beer community, by scooping up Pirate Life Brewing, which had recently been voted that nation’s best brewery.

With unlimited economic resources, the world’s biggest beer company will continue to dominate retail space and tap lines with lowball pricing in the US as well as abroad, making it harder for true independent craft brewers to secure the necessary access to the marketplace.

And while we anticipate that more American craft breweries will sell their properties to Big Beer going forward…We expect that England and Australia will remain prime craft brewery acquisition targets in 2018.

More Craft Beer Alliances And Venture Capital plays

Another defensive strategy that really came in to its own in 2016 involves brewery partnerships and alignments – as well as venture capital plays in differing permutations.

Just a few of 2016’s highlights included…

Stone receiving a $90 million infusion from VMG Partners (and they still had some layoffs).

Pennsylvania’s Victory Brewing aligning themselves with New York’s Southern Tier under the Artisanal Brewing Ventures banner. And as an aligned force they’ll be opening a new experimental brewhouse in Charlotte, NC this year.

Boston-based Fireman Capital, which already owns Oskar Blues Colorado’s and the Utah Brewers’ Collective (home to Squatters Craft Beers and Wasatch), acquired a controlling interest in Tampa’s Cigar City Brewing.

And in May of 2017, Boston-based Castanea Partners brought a majority stake in SoCal’s The Bruery, which no doubt allowed them to expand to the East Coast with a new store in Washington, DC.

Given today’s increasingly crowded craft beer landscape, we expect to see these strategic arrangements to accelerate this year, with different combinations and new variations being introduced in 2018.