The U.S. craft beer industry continued to shrink in 2025, marking the second straight year in which brewery closures outpaced new openings.
Midyear data from the Brewers Association showed craft beer volume down an estimated 5%, a steeper decline than in 2024.
Third-quarter retail data pointed to further weakening in the second half of the year, suggesting full-year production will fall beyond midyear estimates.
The Brewers Association tracked 268 new brewery openings in 2025 and 434 closures. That means closures exceeded openings by more than 60%.
While closures accounted for about 4.4% of all operating breweries, the imbalance underscores ongoing pressure on new and existing producers.
By the end of the year, the number of small and independent breweries operating in the United States totaled 9,778.
The industry supported more than 443,000 jobs and contributed an estimated $72.5 billion to the U.S. economy.
The association cited shifts in consumer behavior, retailer consolidation, higher costs tied to inflation and tariffs, and increased competition as key challenges.
Many brewers responded by adjusting product lines, revising business models, or expanding offerings such as low- and mid-alcohol beers.
Changes in consumer habits may also be affecting demand.
Gallup surveys in recent years have shown a gradual decline in the share of U.S. adults who say they drink alcohol.
The share of U.S. adults who say they drink alcohol has fallen to 54%, the lowest level recorded in Gallup’s polling history. The decline continues a long-term trend, down from about 60% a decade ago and more than 70% in the late 1970s.
The report also found rising concerns about alcohol’s health effects.
A growing majority of adults now say even moderate drinking is bad for health, reflecting shifting attitudes that may influence consumption patterns across beer, wine, and spirits.
Large producers have also shown caution. Jim Beam recently paused production at one of its facilities, citing inventory levels and softer demand, signaling pressure across multiple segments of the beverage market.
Jim Beam said it will halt bourbon production at its Clermont, Kentucky, distillery for at least a year beginning in 2026, citing reduced demand and ongoing tariff pressures affecting the whiskey industry.
The company said the pause will allow time for investments and improvements at the site, while its larger distillery in Boston, Kentucky, will continue operating.
The move comes as U.S. spirits exports have declined, including a sharp drop in shipments to Canada, even as bourbon inventories have grown substantially, with about 16 million barrels currently aging in Kentucky warehouses.
The Brewers Association said lower interest rates and possible clarity on trade policy could ease some constraints, though most challenges facing craft brewers are expected to continue into 2026.