HILLSIDE, ILLINOIS – JANUARY 06: Craft beers are offered for sale at a big box store on January 06, … More
If the American Craft Brewing industry thought the last few years were tough with softening sales and changing consumer preferences, things are probably going to get worse before they get better. That was the recurring message in the recent ‘Tariffs on Tap: Navigating Trade Policy Shifts in Craft Brewing’ webinar, presented by the Brewers Association (BA).
As the largest trade group for American brewers, the Brewers Association (BA) serves as the advocate for craft beer on Capitol Hill, the industry organizer, and its loudest cheerleader. The webinar, held on April 17, 2025, is part of the organization’s outreach to its thousands of members about the ongoing tariff changes, spotlighting the struggles of one of America’s favorite homegrown industries.
All three presenters —Bart Watson, the president and CEO of the Brewers Association; Scott Metzger, the president and COO of Craft Ohana; and Steve Rannekleiv, a managing director at Rabobank —emphasized that these are unprecedented times for craft brewers. “This is going to be a time where the challenges being presented might be more existential to breweries’ survival than a temporary one for brewers,” said Metzger.
The webinar took place just two days after the BA released its Annual Craft Brewing Industry Report, which highlighted the challenges faced by a mature industry as it combats a shrinking alcohol market. The craft beer industry experienced a 4% decrease in production, while maintaining a flat market share by volume at 13.3%. 2024 also saw its first decline in brewery numbers since 2005 finishing at 9,612, down 135 breweries from 9,747 in 2023.
One of the main worries facing breweries under the new tariffs is how to deal with possible price increases for the essential goods needed to make their beers. The standing 25% tariff on aluminum (beer cans) and steel (brewing equipment) is the first cause of concern but there are others. Over 40% of the barley used by brewers comes from Canada. Many hops are sourced from Europe and Australia, while malts come from Europe and bottle caps from Mexico.
While conventional wisdom would see the brewers passing any increases in cost of goods along to its consumers all three speakers expressed worries about that. The price of craft beer has steadily risen over the last decade, especially during the pandemic, and many worry that any large increase could further drive drinkers away.
“We are entering an era where assumptions we once held—such as the idea that beer is an inelastic good (one that can withstand price increases)—are about to be significantly tested,” Metzger expressed. “We are in a brand new world where the consumer has alternatives to craft beer that didn’t exist before that they can turn too.”
Craft brewing is already a low profit margin business and if brewers swallow the costs of goods out of fear of raising prices it could lead to unbalanced spreadsheets that ultimately see more closures. If they raise prices then they risk turning drinkers’ away long term; once prices increase, they rarely decrease, which add to the dilemma. It’s a lose-lose bet for brewers.
Another issue facing brewers is the uncertainly surrounding the economy right now. Between the imposition and suspension of tariffs, the softening of the stock market, and historically low consumer sentiment numbers, brewers have an even more difficult path to navigate.
“The back and forth of everything is leaving people wondering why they should invest now if there is going to be a policy change in a few days or four-years?” said Rannekleiv. “How do you think about making long term investments, especially if the threat of inflation is looming again.”
One other issue brought up by all three is the financial stresses both employees and consumers are facing. Brewers are going to have to take an active role in their operations engaging in everything from interactions with their customers to ensuring that their teams feel supported. The key to that is making sure that they have a plan in place to deal with issues as they arise and having the ability to quickly pivot for consumer demand.
Watson expressed that, historically, craft consumers come from higher socio-economic backgrounds and have weathered difficulties well, but that stability is uncertain. “For parts of the U.S. this will be good for and for others it won’t be. Brewers that understand where they are and how this all is impacting their consumers will be the ones that come through this. Brewer’s that don’t might not.
Despite the difficulties, glimmers of hope were shared during the call by all three presenters. Mexican beer, which has been on a tear the last decade may lose market share if it’s prices go up, that could push consumers to look at craft beer as an alternative. Cider, which ideally is completely domestically produced, could find its position improving. The 19.2 oz can, which has been the hottest product for craft, should only grow as consumers look for value. That in turn could introduce drinkers to new brands.
The craft beer movement has been nothing short of an American success story. It has transformed the face of beer worldwide and at the BA’s latest count employees almost 200,000 people directly, plus untold more both down and upstream. That is one of the messages Watson said are being emphasized in Washington, D.C., as they actively work to help the industry survive these uncertain times. While the current climate poses significant challenges, the craft brewing industry is resilient and unlikely to disappear; however, we may witness a rise in brewery closures, surpassing the 529 that shut down in 2024.
In these tough times, all craft brewers can do is hunker down and focus on what they do best: brewing great beer that puts a smile on people’s faces, ensuring that the craft beer culture endures despite the hurdles ahead.
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