Bart Watson Talks About the New Realities for Craft Breweries

Bart Watson has one of the coolest jobs in America. He’s the Economist for the Brewers Association and the man behind the widely anticipated numbers documenting the brewing revolution going on in the United States.

Unfortunately, the latest figures don’t look so good. Given the rather modest 6% growth figures released by the Brewers Association last week after years of strong growth in the 10-20% range, it seemed reasonable to wonder if the craft beer industry, at least the industry defined as small and independent by the Brewers Association, is entering a market correction.  Signs this has already happened include the business failures of San Francisco’s Speakeasy Ales & Lagers and Metalcraft Fabrication, a Portland supplier of brewing equipment based in Portland. In a brief interview, Bart Watson delivered rapid fire responses to my questions about the state of craft beer.

Q: In 2014, small and independent brewers grew 18% by volume.  In 2015, that number was 12%.  Now in 2016, that number has dropped to 6%.  Is the party over?

Bart Watson: We’re certainly entering a new and more competitive phase.  There’s just a lot more breweries and larger breweries have gotten more aggressive.  It’s also becoming less instructive to look at the national as a whole and instead look at certain regions.  In some areas of the country where craft does well, when you combine craft market share plus imports, you’re looking at 60-70% market share.  It’s tough for a craft brewery to grow a lot in a place like that. A key to brewery growth will be how to adapt and enter regions where craft beer has a lot less penetration.

Q: Speakeasy has gone into receivership due to a failed expansion launched in 2015.  Metalcraft Fabrication is going out of business for the same reason.  These were two solid craft beer companies who expanded in more optimistic times.  Are we going to see more stories like this?

Bart Watson: I think we will more see more of this, that’s part of business in competitive times.  The last five years in craft beer were not normal.  Everyone could succeed. Now we’re seeing a new competitive industry, and companies will need to be more cautious.  Companies that were overly optimistic will run into trouble and I think we’ll see some more failures.

Q: Some of the beer with biggest growth in 2016 include Goose Island IPA (81.7%), Lagunitas IPA and Little Sumpin’ (20.3% and 45.2%), and Firestone Walker 805 Blonde Ale (74.4%)….none of these were from small independent breweries.  Considering small independent brewers grew at only 6%, do these numbers validate a lot of people’s concerns about brewery acquisitions by large corporations.

Bart Watson: We’ll see.  If you look at these things more holistically, it’s a mixed bag.  Shock Top and BlueMoon didn’t have good years.  Craft beer plus big business doesn’t automatically translate to big success.  Some of these growth figures for the beers you point out are already slowing down.  We’ll see how it plays out in the long term.

Certainly, when you put big money and distribution behind a craft brand, that can be powerful combination.  Large breweries are trying to replicate what succeeded for local breweries….tasting rooms, festivals…trying to be like smaller brands.  We’ll see what consumers think about this.


Having survived a couple market corrections in the fiber optics and solar panel industries in my professional life, I know all too well what happens to smart, seemingly careful people who get trapped in expansion plans that are no longer sustainable when the market suddenly slows. It’s easy to get caught up with the latest news, figures and speculation on market corrections, forgetting that lots of people’s jobs, dreams and livelihoods are suddenly on the line like never before. Best of luck to everyone in the industry dealing with beer’s new realities.

(Bart Watson photo from the Brewers Association)



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