It’s hard to ignore the climate of Delaware craft beer after multiple breweries appear to be closing. Fordham & Dominion (Dover) announced a closure over the summer, Blue Earl Brewing (Smyrna) closed in September, Hangman Brewing (Claymont) alluded to closing down at the expiration of their lease in 2024.
What’s causing this?
Folks in the craft beer industry have known for a little while now that the boom times are over. In the early 2010’s, there were around 3,000 breweries in the U.S., and opening one that made decent beer was a slam-dunk recipe for success. Growth was nearly guaranteed as craft beer gained in popularity.
Fast forward to 2023: there are nearly 10,000 breweries in the U.S. Every small town has one. Larger towns have multiple. The competition got really fierce, really fast. And then interesting alternatives like seltzers, RTDs (ready to drink cocktails), and NA beers (non-alcoholic) began to appear. You have seen the shelves at the liquor store…indeed, they are very crowded.
There was a global pandemic thrown in the mix that precipitated a litany of rapid changes in consumer demand (on-premise pours way down, to-go beer way up, and recently those trends flipped again). Agile breweries recognized the change and adjusted where they could. But unfortunately, with capital intensive businesses (those tanks ain’t cheap), infrastructure can be hard to change.
And then the growth of craft beer leveled off. The supply finally met the demand. Business savvy individuals call this “market maturity”.
The forecasted future growth in craft beer will simply not enable every one of the 10,000 U.S. breweries to grow. The math just doesn’t work. The craft beer pie is not getting bigger fast enough (although I should note that the pie is still enormous).
What does this mean for Delaware craft beer? I think we will see a slow down in brewery openings and perhaps even an additional closure or two, BUT we’ll also see several thriving and expanding breweries. You'll know who those brewers are because they will be offering something compelling that you really want (and a lot of other people will want it too).
I think that’s something to be optimistic about.
-Jimmy