Craft beer growth slows to 8 percent in first half 2016

Bye, bye to double digit growth? Craft beer slowed to its lowest growth rate in seven years. During the first six months of 2016, volumes were up 8 percent over the same period last year, says the Brewers’ Association (BA). That’s a big drop from the 13 percent rate craft beer notched in the first half of 2015, and just half the 16 percent expansion it enjoyed in 2014.

The slowdown in growth is party down to how the BA does its numbers. It excludes all the brewers that were sold, or in which a Big Brewer holds a sizeable stake. That excludes fast-growers like Lagunitas (part-owned by Heineken) and Ballast Point (bought by Constellation for USD 1 billion last year). Another fast grower like Goose Island (owned by AB-InBev) is not in the numbers either.

But the BA does include Boston Beer, Sierra Nevada and a couple of other big craft brewers, whose volumes declined during the first half, according to Beer Insights, an industry tracker.

If the 8 percent growth can be maintained through the rest of 2016, it will lead to a volume increase of about 2.3 million hl from the 26 million hl made in 2015, said Bart Watson, the BA’s chief economist.

The slowdown reflects the reality that, as the industry becomes increasingly larger, its rapid growth will become just a bit less rapid, he said.

A total of 917 breweries opened across the country over the first half of this year, bringing the total of operating breweries to 4,656. There’s another 2,200 in planning, says the BA.

It will be interesting to watch how the aging craft breweries adapt and how many newbies survive, says Beer Insights.