Decline in U.S. Craft Breweries, Sales Has Wisconsin Brewers Unfazed
Two craft breweries highlight expansion plans and growth despite headwinds.
QuinnDombrowski (CC-BY-SA)
After more craft breweries closed than opened across the nation for the first time in 20 years, a pair of Wisconsin craft brewery owners say they’re adapting to the times.
Last year, craft beer sales declined across the country by 4 percent, according to the Brewers Association. And in Wisconsin, the total number of craft breweries declined for the first time in over 20 years.
Modern craft breweries face a number of challenges, from increasing costs and the rising popularity of THC-based drinks and hard seltzers, to younger generations drinking less alcohol.
What’s the key to surviving these challenges to the brewing industry?
For New Glarus Brewing Company founder and CEO Deb Carey, it’s adapting and expanding. On WPR’s “Wisconsin Today,” Carey called moments like what brewers are facing now an “opportunity and a challenge.”
“Customers are so sophisticated that the table stakes are beyond anybody’s imagining from 10 or 20 years ago,” she said. “You can’t just throw a shingle out and do the kind of ‘I’ve built it so they’ll come’ anymore.”
Carey said this isn’t the first time in her over 30 years operating New Glarus — the largest craft brewery in Wisconsin and one of the largest in the country — that the industry faced challenges, such as the COVID-19 pandemic when bars closed for a time.
But now, Carey said, the biggest challenge breweries are facing is uncertainty in the state of the economy. The latest Consumer Price Index showed that inflation remains a factor in America, with June prices being 2.7 percent more expensive than the same time last year. And President Donald Trump’s tariffs on aluminum and agricultural products could hike costs for producers.
“(Economic uncertainty) makes everybody a little apprehensive about spending or celebrating, and they’re more careful with their income,” she said.
“I have friends who think (tariffs are) great and it’s moving forward, and we’ll all see in a few years how that pans out,” Carey added. “I pray every day that they are right. However, the fact of the matter is that at this point, it does create economic pressure on pricing and really is harming a lot of breweries.”
Carey said her own brewery is relatively shielded from increased prices from tariffs, due to sourcing most of its products locally. But that isn’t the case for many other craft breweries around the state.
How should breweries prepare to make it through economically uncertain times? For Fox River Brewing Company’s CEO Jay Supple, it’s keeping tabs on the trends and always having an eye toward expansion.
Supple told “Wisconsin Today” that the biggest thing is increasing volume and awareness for your brand to keep up with rising costs to materials and labor.
“A lot of your costs can be offset with volume,” he said. “It’s really critical that you try to increase your volumes. Because as you increase volume, obviously it’s more cash flow, which helps minimize the risk as well as minimize the cost of doing business.”
Supple said he and his family are often crisscrossing the state, making deliveries for his breweries, trying to remain busy all year round. This week, they’re working in Green Bay in preparation for this year’s Packers training camp.
Supple said the current downward trend in national craft breweries does show weakness in an already risky industry, but he added that there are risks to businesses in almost everything they do.
Carey said craft breweries support not only the brewing industry but also the many local businesses they work with.
“It takes a village to make a beer,” she said. “Our wholesalers are the ones who bring it to the market. Retailers, tavern owners, they’re the people who are serving the beer. There’s an army of people making the beer and there are all kinds of little side industries, like our insurance company and the bankers.”
“Sometimes, I think people forget that when businesses struggle or flourish, it really does have a big impact on your local economy,” she added. “And that’s one of the great things about craft beer, is we really are economic drivers for our communities.”
National downturn in craft breweries has Wisconsin brewers unfazed was originally published by Wisconsin Public Radio.
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