Brewers Association’s Year in Beer Report: 9,500 Breweries Operated in the US in 2022; 550+ Breweries Open, 200+ Close

U.S. craft breweries saw a “varied recovery” in 2022, with volume returning to pre-COVID-19 pandemic levels, but not all channels bouncing back and margins tightening, according to the Brewers Association’s (BA) annual Year in Beer report.

“The maturing craft industry continues to grow more competitive, facing both internal business pressures and externally the continued growth of new beverage alcohol competitors,” BA chief economist Bart Watson said in a press release. “While these challenges are daunting, craft brewers are known for their innovation and flexibility, and will need both as they evolve to meet the next generation of beer lovers with new beers and new occasions.”

More than 9,500 breweries operated in the U.S. at some point in 2022, according to the BA. The trade group estimates more than 550 breweries opened during the year, while more than 200 closed. In 2021, an estimated 710 breweries opened while 176 closed, according to the BA’s 2021 report.

The numbers indicate slowing brewery growth, which is not entirely due to the COVID-19 pandemic, but rather a continued pattern of a “maturing industry,” Watson said during the Brewbound Live conference in Santa Monica in December.

While craft beer volume has returned to 2019 levels, not all channels have “bounc[ed] back equally,” Watson said in a video accompanying the Year in Beer report.

On-premise establishments have “continued their long and unsteady recovery in 2022,” and business has returned, but draft sales are still recovering.

In a similar sentiment, small and local brewpubs and taprooms have “proved nimble” and are faring well despite “continued supply disruptions,” while micros and regionals have struggled, tackling fights for shelf space “in an increasingly competitive distribution climate.”

The BA highlighted its 2022 legislative and regulatory battles for small brewers, including several fights against lowered excise tax rates for spirits-based ready-to-drink canned cocktails (RTDs) in Arizona, New Jersey, Washington, Vermont, Illinois, New Jersey, California and Colorado.

Excise tax changes have been spearheaded by the Distilled Spirits Council of the United States (DISCUS), which argues that “alcohol is alcohol” and RTDs with a similar ABV to malt-based beverages should be taxed at the same rate.

The BA also applauded the U.S. Department of Treasury’s report on competition in beer, wine and spirits, published in February. The BA shared comments with the Treasury, the Department of Justice (DOJ) and the Federal Trade Commission (FTC) prior to the report expressing concerns over “wholesaler consolidation, unfair state franchise laws, and restrictions on direct-to-consumer sales” and later applauded the report for its recognition of laws that “inhibited the growth and competitiveness of craft producers.”

The BA will continue to advocate for regulatory changes and against lower excise tax rates in 2023, as well as for the United States Postal Service (USPS) Shipping Equity Act (H.R.3287/S.1663), which would allow the USPS to ship alcoholic beverages. Bills were introduced into the House and Senate in 2021.

The BA also highlighted the continuation of its mentorship program, which has now matched 102 mentors with 124 mentees, as well as its mini grant program, which has donated more than $150,000 to diversity, equity and inclusion (DEI) organizations and advocates.

Additionally, the trade group celebrated the return of the Great American Beer Festival (GABF) after a two-year hiatus. More than 40,000 attendees celebrated the 40th anniversary of the event, held October 6-8, which featured 500 breweries and more than 2,000 beers. The first GABF in 1982 featured 24 breweries and 47 beers, according to the BA.

Supply chain challenges will persist into 2023, as barley and hops face “unprecedented challenges created by climate change,” according to the BA.

“Although the 2022 harvest improved, the severe depletion of stocks in 2021 kept barley supplies and prices high in a very dynamic and changing market,” the BA wrote.

While the U.S. – which recorded the largest hop acreage in 2021 – is expected to record an average hop crop yield for 2022, Germany – which boasted the second largest hop acreage in 2021 – is expected to record a hop yield -20.4% below 2021 levels and -18% below its average yield, according to global hop supplier BarthHaas in an August report.

“As the economy ramps back up and on-premise beer and restaurant sales increase, so will demand for CO2,” the BA continued. “More brewers may feel the pain of facing curtailed production schedules or even full-scale shutdowns as some brewers did during the pandemic.”

“2023 will be a reset for many brewers as the maturing craft industry continues to grow more competitive, facing both internal business pressures and externally the continued growth of new beverage alcohol competitors,” Watson said. “While these challenges are daunting, craft brewers are known for their innovation and flexibility, and will need both as they evolve to meet the next generation of beer lovers with new beers and new occasions. “

The BA’s predictions for 2023 include:

• Brewery openings in the U.S. will be “the lowest in over a decade”;

• “Distributed craft volume will not grow”;

• The supply chain “will remain rocky,” although average prices “will come down from 2022 peaks;

• And “total brewery employment will still grow.”

John Mallett to Depart Bell’s After 20+ Years

Industry veteran John Mallett will depart from Bell’s Brewery next month, after more than 20 years with the Comstock, Michigan-based brewery.

News of the departure comes exactly a year after Mallett was placed in the role of VP of brewing and quality for both Bell’s and New Belgium Brewing, helping oversee the integration of the two companies after Bell’s was acquired by New Belgium’s parent company, Kirin-owned Lion Little World Beverages.

Now that the integration is complete, Mallett has made the decision to “take a step back and devote more time to his family and hobbies, such as skiing and sailing,” a Bell’s spokesperson told Brewbound.

“John’s contributions to Bell’s, and to the entire craft beer community, are truly impossible to measure or even say out loud,” Bell’s EVP Carrie Yunker said in a press release. “He’s a brilliant brewer and a visionary operator who brings a strong sense of passion and a willingness to bust through constraints to every beer he makes and every life he touches.”

Mallett has been brewing craft beer for more than 35 years, holding positions at Commonwealth Brewery (Boston) and

Old Dominion Brewing Co. (Ashburn, Virgina), before joining Bell’s in 2001. At the time, Bell’s was breaking ground on its now-main brewing facility in Comstock, Michigan. Bell’s grew to be the sixthlargest Brewers Association-defined craft brewery by volume in 2021, producing 490,000 barrels of beer.

While at Bell’s, Mallett was a “driving force behind the commitment to both quality and safety that the company is known for today,” helping to establish “robust teams and processes focused specifically on best-in-class quality standards and safety-always protocols,” according to the release.

“As volume growth continued to demand numerous expansions and build outs of the Comstock, Michigan, brewery, Mallett remained committed to growing manufacturing capabilities responsibly, with a focus on protecting our resources for generations to come,” the company wrote.

In 2021, Bell’s celebrated Mallett’s 20th anniversary with the company by launching the John Mallet Scholarship, which helps fund an individual’s studies at the Master Brewers Association of the

Americas. Bell’s committed to funding the scholarship – which debuted in 2022 – for the first three years, including covering registration and travel for the awardee. Bell’s founder Larry Bell also donated $125,000 to the fund “in an effort to permanently endow the scholarship,” according to a press release.

“As I reflect on my 20+ years of working out of Comstock, the brightest point by far is the relationships I’ve built with coworkers, beer fans, farmers, researchers, suppliers, tradespersons, students, the media, publicans, design professionals, educators, distributors, regulators and fellow brewers,” Mallett said in Wednesday’s release. “I can say without hesitation or doubt, that this has been an experience beyond my wildest dreams. The brands and breweries we’ve built together are impressive, but the people and teams behind these achievements deserve a far greater spotlight.”

There are no plans to fill Mallett’s position at this time, according to the Bell’s spokesperson, noting that “the impact John’s had on the brewery – and the craft beer community – is irreplaceable, but he has done an excellent job of training and preparing the leaders in place at Bell’s today to continue this work in his absence.”

Brewers Association to Increase Membership Dues in February

The Brewers Association (BA) will increase the cost of membership for the first time in nearly two decades, the organization reminded members.

New prices – which are tiered according to brewery size –were scheduled to go into effectFebruary 1. The increase was first announced in November.

Annual dues will increase $30 for both breweries producing between 0 and 500 barrels, which will see their rate increase to $225, and breweries producing between 501-2,500 barrels, which will see their rate increase to $325.

Larger breweries pay both a flat fee and a per-barrel fee. Breweries with production volume between 2,501-60,000 barrels will see their flat fee increase by $30, to $325, and their perbarrel rate increase by $0.01, to $0.11 per barrel beyond 2,500.

The flat rate for breweries with annual output between 60,001-150,000 will increase $605, to $6,650. The per-barrel rate for those breweries will increase $0.0065, to $0.0715 per barrel beyond 60,000.

The largest breweries – those producing between 150,000 and 2 million barrels – will see their flat rate increase $1,200, to $13,200; the per-barrel rate will increase $0.0005, to $0.0055 per barrel beyond 150,000.

Only the 14 largest BA-defined craft breweries produced more than 150,000 barrels in 2021, according to the BA’s May/June edition of the New Brewer. They included D.G. Yuengling and Son Inc., Boston Beer Company (Samuel Adams, Dogfish Head), Sierra Nevada, Duvel Moortgat USA (Firestone Walker, Boulevard, Brewery Ommegang), Gambrinus (Shiner, Trumer), Bell’s Brewery, CANarchy (Oskar Blues, Cigar City, Deep Ellum, Wasatch, Squatters, Perrin), Artisanal Brewing Ventures (Victory, Southern Tier, Sixpoint), Stone, SweetWater, Deschutes, New Glarus, Brooklyn Brewery, and Matt Brewing (Saranac).

Of these, Yuengling is not a member, according to the BA’s member directory. Lion Little World Beverages’ 2021 acquisition of Bell’s may preclude the brewery from full membership moving forward.

The BA defines independent craft breweries as those who hold brewers licenses from the U.S Department of Treasury Alcohol and Tobacco Tax and Trade Bureaus (TTB), produce fewer than 6 million barrels annually, and are not more than 25% owned by another “beverage alcohol industry member that is not itself a craft brewer.”

In addition to professional brewery memberships, the BA offers memberships to allied trade businesses and organizations ($495), distributors ($395), craft beer retailers ($95) and individuals

($175). Dues for these memberships are not increasing in 2023, a BA spokesperson told Brewbound.

Membership dues make up the BA’s second largest source of annual revenue behind events. Membership dues in 2021 – the most recent year numbers were available – totaled $4,508,011, a decline of $345,347 from the $4,853,358 that the organization generated in 2020, according to the group’s 2021 annual report.

The 2021 membership revenue figure marks a five-year low for the BA, falling just below 2016’s membership revenue of $4,678,181, when the organization counted 8,882 total professional members.

Membership revenue has declined $640,676 in the five-year period since 2019, which represented a highwater mark for the BA with dues accounting for $5,148,687 in revenue. The BA counted 10,966 members across all classes that year. Membership revenue topped the $5 million mark for the first time in 2018, as the organization collected $5,122,013, with 10,739 members across all classes, the last year in which the organization shared membership numbers.

The news of membership dues increases follows the BA announcing in December that it has ceased one of its four signature events, the SAVOR beer-and-food pairing event that was held annually in Washington, D.C.

SAVOR along with the Great American Beer Festival (GABF), Craft Brewers Conference (CBC) and the American Homebrewers Association’s HomebrewCon made up the BA’s big four events. In 2019, the year before the COVID-19 pandemic forced the BA to cancel the in-person versions of its events, events generated

$16,173,153 in revenue for the organization, more than double the events revenue from 2021 when the BA brought in $7,294,944. In 2020, with the pandemic in full effect canceling in-person events, the BA’s events revenue dipped to $1,701,215, according to the group’s 2020 stewardship report.

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CSDs

With Sierra Mist sales on the decline, PepsiCo has repositioned itself to compete against CocaCola’s Sprite with the debut of a new lemon-lime soda, Starry. “With one product dominating the category, consumers deserve another option,” said PepsiCo Beverages North America chief marketing officer Greg Lyons in a press release. Starry comes in both Regular and Zero Sugar varieties and is available at retailers and food service outlets nationwide. For more information, visit starrylemonlime.com.

MTN DEW announced the reemergence of its Pitch Black flavor, slated to roll out in January 2023. The LTO first launched in 2004 before returning to store shelves from 2016 to 2019. Now, the third iteration will also be offered in Zero Sugar and Energy formats. For more information, visit mountaindew.com.

Energy

Monster expanded its energy drink lineup with the addition of Monster Energy Zero Sugar. Available in the brand’s flagship flavor, each 16 oz. can boasts 160mg of caffeine and has just 10 calories. Monster Energy Zero Sugar is currently available on Amazon for $26.93 per 15-pack with a full launch coming by the end of Q1 2023. For more information, visit monsterenergy.com.

Austin, Texas-based better-for-you energy drink maker SOMI splashed into the new year with three new flavors: Osaka Redberries Matcha, Fancy Mango Matcha and Yuzu Lemonade Matcha. The zero sugar, matcha-based energy drinks feature ceremonial grade matcha and L-theanine and boast 140 mg of caffeine per 12 oz. can. All three flavors are available online for $42 per 12-pack and will soon make their debut at Central Market. For more information, visit drinksomi.com.

Cbd Beverages

Portland, Oregon-based CBD-infused sparkling water brand Aprch introduced the first edition of the Aprch Partner Project, Mint+Cucumber, made in partnership with snow goggle and helmet maker SMITH. According to the brand, the #WeRunCold cans are a tribute to SMITH’s #WeRunCold

Winter campaign features a mountain scape designed by Ryan Schmies. The limited-edition offering is available online for $12.99 per 12 oz. can. For more information, visit drinkaprch.com.

While its name might imply summery vibes, THC-infused cannabis beverage Endless Coast is ready to head indoors this winter with its new seasonal flavor release Spiced Apple, which pairs crisp apple notes with familiar notes of holiday spices. Available in 4-packs at adult-use cannabis stores across Massachusetts, each can contains 5mg of THC per 12 oz. can. For more information, visit endlesscoastseltzer.com.

NON-ALCOHOLIC

MIXOLOSHE expanded its lineup of non-alcoholic soft seltzers with three new products: Blueberry Gin & Tonic, Cosmic Bitter Spritz and Orange Old Fashioned. All of the drinks come in 12 oz. cans and have just 50 calories. Additionally, the brand will soon roll out three nonalcoholic spirits, including Gin, Whiskey and Tequila. The seltzers are available for $29.99 per 12-pack and the non-alcoholic spirits will be available for $29.99 per 750ml bottle. For more information, visit mixoloshe.com.

Siren Shrub Co. released a new limited edition flavor, Currant. The wine alternative features flavor notes of jam and is crafted with currants, organic apple cider vinegar and organic cane sugar. Siren Shrub Co. Currant will be available exclusively online for $22 per 16 oz. bottle. For more information, visit sirenshrubs.com.

Dr. Zero Zero has launched its non-alcoholic iteration of the Amaro, AmarNo. The new offering is formulated with extracts of sage, wormwood, Chinese rhubarb, quassia and orange. Dr. Zero Zero AmarNo is available online for $34.99 per bottle. For more information, visit drzerozero.com.

Sparkling Water

Sparkling water maker Spindrift announced the launch of four new varieties: Nojito, Peach Strawberry, Mint Green Tea and Mango Black Tea. The Nojito marks the brand’s first foray into the mocktail category and its first integration of an herb, mint. For more information, visit drinkspindrift.com.