For years, craft breweries have been proliferating nationwide – and particularly in Southern California, with hundreds of sudsy startups to be found from Los Angeles to San Diego.
The Brewers Assn., a trade group, estimates that about 9,300 craft breweries now operate across the country.
But have we finally reached peak craft? The association says the number of federal permits issued to craft brewers last year was the smallest since 2013.
It estimates this year will see the fewest new craft breweries in over a decade.
“I don’t know that we’ve reached peak craft yet since we’re still seeing growth in other small beverage alcohol producers,” says Bart Watson, chief economist for the Brewers Assn. “But I think we’re seeing a point where breweries really have to work to differentiate.”
To the uninitiated, the world of craft brews can be bewildering. Indian pale ales, or IPAs, lagers, pilsners, stouts, porters, wheat beer – the choices seem endless.
Highland Park Brewery near Dodger Stadium emerged from the pandemic in relatively good shape. But Marketing Director James Sullivan says times are tough for a number of local craft brewers.
“I think it’s going to be a difficult year,” he says. “I feel like we’re going to see a lot more closures. I feel like we’re going to see a lot more turnover.”
Sullivan says the thirsty local market may not yet have hit peak craft. But that day is coming.
“I think we’re getting there,” he told me. “I think, you know, starting this year, we’re going to see a lot of our locals unfortunately closing, and it’s tough to see.”
If none of this has put you off, and you harbor dreams of being a craft-brew kingpin, bring your checkbook.
The Brewers Assn. estimates it can cost about half a million bucks to launch a bare-bones craft brewery.
If you plan to distribute to stores, bars and restaurants, that’ll run into the millions of dollars.
And you may end up thirsty for profit.