Year in Beer
The Brewers Association takes a look back at a year that was marked both by recovery and relief but also new challenges and disruptions.
On the path to future growth
As the sales tide swung back toward bars, restaurants, and breweries, many craft brewers began to see the path back to their former production volumes, or even new growth.
Record Brewery Count
Despite the pandemic, more than 9,000 breweries operated in the United States in 2021, a 6 percent increase from 2020.
With a strong presence across the 50 states and the District of Columbia, even in a challenging year craft breweries are a powerful economic force at the local, state, and national level. Small and independent American craft brewers contributed $62.1 billion to the U.S. economy in 2020.
The industry also provided more than 400,000 total jobs, with nearly 140,000 jobs directly at breweries and brewpubs, including serving staff at brewpubs.
The Big Fight for Small Brewers
- Enacted in March, the American Rescue Plan Act legislation created the Restaurant Revitalization Fund (RRF)– a $28.6 billion fund which provided grants to hospitality businesses. The initial legislation did not list breweries as being eligible for grants, but the Brewers Association fought hard to ensure that breweries would be included in the RESTAURANTS Act (H.R. 793/S.255). Thanks to our efforts, approximately 1,600 breweries received more than $450 million in grants.
- The BA continues to advocate for full funding for the RRF. The Restaurant Revitalization Fund Replenishment Act (H.R.3807/S.2091) seeks to add an additional $60 billion to the RRF, thereby providing critical funding for the recovery of small hospitality businesses who did not receive funding in the first round of RRF grants.
- The American Rescue Plan Act also extended the Employee Retention Tax Credit, which allowed qualifying businesses that saw revenue declines or that had to temporarily shut down operations due to government orders related to COVID-19 take a credit for a portion of the wages they pay to some or all of their employees.
Fair Trade Practice
The President’s Executive Order seeks to reinvigorate healthy market competition in an economy increasingly dominated by multinationals and companies shielded from competition by exclusionary practices and protectionist laws. The Executive Order contains two specific provisions related to the alcohol beverage industry, and the Brewers Association wants to make sure that small and independent brewers’ voices are heard by the federal agencies examining competition in the beer market. Our comments aim to elicit more stringent antitrust enforcement by federal competition authorities, enlist federal help in shining a spotlight on unfair and protectionist state laws, and secure more rigorous and effective enforcement of federal trade practice laws.
Excise Tax Relief
On Dec. 27, 2020, language from the Craft Beverage Modernization and Tax Reform Act (CBMTRA) was enacted, making the existing federal excise tax rates permanent, was signed into law. This effort was a top lobbying priority for the Brewers Association and came at a critical time for the industry. The successful passage of CBMTRA was the culmination of more than a decade of advocacy and a testament to the brewing industry’s growing political influence, as more than three fourths of the U.S. Congress supported the bill. Small and independent breweries across the United States will save more than $80 million each year on federal excise taxes.
The United States Postal Service (USPS) Shipping Equity Act (H.R.3287/S.1663) is bipartisan legislation that would give USPS the same ability as private carriers to ship alcohol in states where it is legal to do so. This legislation is benefcial to breweries, consumers and the postal service.
Supply Chain Disruptions
Weather damage, labor issues, and manufacturing shortages and delays have impacted the brewing industry throughout the year.
2021 Barley production dropped to 118 million bushels, down 31 percent from 2020. Yields in Canada were also down sharply, at 38 percent below 2020. This was the smallest U.S. crop since 1934 and the smallest North American crop since 1949. Learn More
Baby hop yards (first-year plantings) and some aroma varieties appear to be the most heavily affected by the heat. Learn More
Many craft brewers pivoted to packaging their product to bring in much-needed income when their primary sales platforms disappeared (tasting rooms, bars, and restaurants) during the pandemic. Cans currently make up around 60 percent of independent craft packaged volume, and, as demand for sustainable aluminum beverage packaging continues to grow at an accelerated pace and large beverage brands switch from plastic bottles to cans, the squeeze on supply for small brewers continues to tighten.
Brewed For All
The American beverage alcohol consumer is increasingly diverse and female.
That shift is ongoing and will likely continue going forward. For example, female drinkers under 25 now outnumber male drinkers under 25. For craft to continue growing and moving more in the larger beer and beverage alcohol consumer market, it will need to connect better with that diverse customer base. The Brewers Association is working to build those resources to help the craft brewing community thrive.
There’s a Craft Beer for Everyone
Sour or sweet. Low alcohol or no alcohol. Fresh and fruity or barrel aged and stout. There is a beer style and flavor for everyone. Innovation is hard and exciting, particularly at a time when retail spots are limited but craft as a category has to find more new beers if it’s going to get back to growth.
2022 Beer Predictions
Comparable craft production will exceed 2019 levels once again.
On premise sales will improve, but draught will still not be back to 2019 levels.
At the brewery, sales will hit all-time highs.
Operating brewery numbers will continue to climb, but at a lower rate than in previous years.
Inflation will come to craft: brewing and manufacturing cost increases will lead to a hike in average beer prices over recent years.
For years, small and independent U.S. craft breweries have been turning the beer world upside down. Their ability to take risks, innovate flavors, and build better communities has made the U.S. the craft beer capital of the world.
The independent craft brewer seal is a certification mark that identifies truly independent craft beer. Over 85 percent of all independent craft volume has already joined the movement and signed up to use the seal. To date more than 5,600 breweries have adopted the seal.
Now more than ever, these breweries need our support. So #SeekTheSeal and step up and order a pint, fill a growler, and stock the fridge. Inside, outside, or curbside … join us in supporting these main street businesses that give our hometowns their unique flavor and keep our glasses full of independence you can taste.