The Brewers Association 2020 Midyear Survey shows both the variety of market challenges for craft brewers during the pandemic and the challenges of gathering accurate survey data. The Brewers Association (BA), a trade association that represents craft brewers by its definition and is always a great resource for info regardless of what you think of that definition, recently released another survey of its membership, trying to capture a sense of industry growth or decline in what was still a thriving market in 2019.
Last year, craft brewers collectively produced 26.3 million barrels of beer and realized just under 4 percent total growth, increasing craft’s overall beer market share by volume to 13.6 percent, according to other BA info. But, how’s the first half of 2020 been? As one might expect, not great. Bart Watson, economist for the BA, explained:
Based on the results of our midyear survey, it appears that craft volumes declined around 10% in the first half of 2020 versus the same period in 2019.
Yet, there is still optimism in the industry. In the same survey, it’s noted that most brewers forecasted modest growth in the second half.
One final piece we asked about was brewers predictions for the second half of 2020. Obviously we received a fair number of answers like “no clue.” But most brewers provided an estimate, and on aggregate, those forecasts averaged out to 4% growth in the second half of the year (versus the same period in 2019).
That’s encouraging, but everyone’s definitely guessing right now. Watson is quick to note that his volumes decline number of 10% took a bit of theorizing.
… it is clear we need to assign bigger error bars to that statement than in the past, due to increased variation in brewer performance, greater challenges in aggregating sources such as scan data, and a lack of accurate tax data to fill in the gaps. Simply put, in normal years, when I use various methods to triangulate on midyear growth, they generally end up fairly close; this year they are all over the place.
For instance: The May 2020 unofficial estimate of domestic tax paid shipments by beer brewers is 14,216,000 barrels or bbls, a decrease of 6.6 percent vs. May 2019 removals of 15,216,000. Of course, everyone is expecting significant revisions for March 2020, April 2020, May 2020 and future months’ tax estimates as TTB Industry Circular 2020-2 has postponed reporting requirements for filing and payment due dates for up to 90 days. Even with these types of hurdles, Watson tries to share some market trends. Here a few important ones.
- As of June 30, the Brewers Association database showed 8,217 active craft breweries, up from 7,480 during a comparable time frame last year. Adding in large and other non-craft brewers brought the U.S. total to 8,341. That is a deceleration from mid-year 2019.
- While it remains possible that closings will accelerate as 2020 continues, through the end of June, the BA’s database only shows 112 closings. That’s only 4 percent higher than the number found during the same time period last year.
- In contrast, the BA has only counted 301 openings. A number that is about 20 percent lower than the opening count through the first six months of 2019 (found by this point last year).