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Just a half-day into the Craft Brewers Conference in Philly, the vibe is generally pretty positive, Brewers Assn prexy/CEO Bart Watson explained during a media breakfast this morn. Last yr, it felt like the craft brewing biz was in a "grin-and-bear-it stage," Bart thought. But this yr it feels like more folks are "coming out the other side." Breweries that choose to attend CBC naturally self-select, skewing attendance towards those that feel like they can afford it, he acknowledged. Still, conversations he's had so far reveal "a lot of positivity and a lot of success that's out there." Perhaps that's because things are looking distinctly brighter thru the first qtr of 2026. It shows up in scan data, sure, but Bart's also "hearing this from members." For yrs, January has arrived with "a lot of doom and gloom." Not in 2026. Easier comps are a key piece of that, natch. And the industry's been in the process of clearing up brands in distribution, which opens up "more opportunities" for those that remain. Then too, a bunch of breweries have spent the last few yrs "getting their distribution footprints in the right place," which is "starting to pay dividends."State of the Industry Preview: Hospitality Breweries Did Better; Closings Still Surprisingly "Static" In total, 2025 was more "negative for distributing breweries," but by some metrics "actually positive for hospitality breweries," Bart commented. Brewpubs and taprooms "had a slightly better year" last yr than in 2024. So tho the hospitality biz is not exactly "healthy" in all, those breweries tend to have more freedom than distributing breweries to "chart their own path and do their own thing," Bart commented. "Distribution is competitive," as both wholesalers and retailers are "looking for innovation in new places outside craft." Sometimes small brewers are "capturing that volume" by expanding their portfolios, but far from all the time.As always, opening and closing numbers "will go up" as time goes by and the full picture comes together. But not dramatically. And as of now, BA counted "300 openings and 481 closings last year," Bart shared. He's still surprised that closings haven't ramped up further. They're still "kind of static" and "lower than I would have expected." The closing rate of about 5% is still "below where it is for overall hospitality businesses," he reminded. And "maybe it's still coming," he said of a possible spike in closings.Instead, the change in the overall brewery count is still far more driven by an ongoing steady decline in the number of breweries opening. It's a "tough time to open a brewery," Bart acknowledged. It's no longer as easy to "walk into a bank," say the word "brewery" and get a loan. Those folks who are opening breweries are much more "clear-eyed about the challenges" and most are "small and locally focused," he finds, looking to serve communities not currently served by existing breweries.Don't Count Craft Out: Look Out for Regional Lagers; Expanding Flavor Cues Away from IPA "We've been in this place before," Bart reminded. In the mid-to-late 90s, craft faced "a lot of headwinds and [was] going nowhere." But then things opened up and it saw a couple decades of gains. It's unlikely to see that kind of growth again, but it's "quite plausible that craft has another period of growth," Bart thinks. For instance, if "regional lagers continue to catch the leaky bucket" of mainstream beer, he said, using a familiar line of Jim Koch's. Then too, if brewers keep exploring the diversity of beer styles, it's possible that "another one hits in the marketplace" like IPA did.That said, there's "more work" to do explaining to consumers that "craft does not equal IPA," Bart noted. "The number one reason 21-34 year olds say they don't drink craft" is that "they don't like the flavor," the BA's consumer research shows. And they also tend to associate craft "with IPA flavors." So folks in the biz need to "lean back into the education that built the category" around the diversity of beer styles and beer flavors.It Ain't Quality, It's Other Sources of "Flavor and Variety"; Shifting Views of "Craft" Bart doesn't see evidence that quality is a reason folks are leaving craft, he said. Certain brands? Sure. But with so many breweries, there's less risk to the segment as a whole, it appears. Instead, "the main reason[s] people are switching" away from craft "are economic" and competitive, he thinks. In particular, consumers are switching to other sources of "flavor and variety," which "used to be things that craft owned," but it simply no longer does. Younger legal age drinkers are "entering beverage alcohol&hellip;later in life," Bart reminded, after "underage drinking has plummeted" over the past few decades. The delayed entrance is also economic as it's "taking longer" for early 20-somethings "to establish an economic foothold," he said.Bart also spoke of the importance of building a pipeline of new consumers, both in terms of younger legal age drinkers and at lower price points. If folks aren't coming in, then there's no one to trade up to higher priced products, where craft has historically lived. That said, some new brands are starting to challenge that idea. Brands like Garage Beer and Tivoli's Outlaw play at different price points and were among the fastest-growing small brewers last yr. But that's in line with how the BA has talked about its membership for years, Bart reminded, emphasizing "independent ownership" more than a "product category" or a price tier. These days, the throughline for its "small and independent" members is more about the company than the kind of beer they're making. And "independence equals the freedom to do what you think is right for your company," Bart said.Finding Middle Ground on Hemp; Tariff and Cost-Based Advocacy When it comes to BA's advocacy work, hottest topic of the time poses some special challenges rooted in the org's diverse membership. "We have members very much on both sides of this issue," Bart said about intoxicating hemp beverages. Officially, the org argues that there is a "certain set of rules that need to be included in any regulatory environment" for hemp-derived THC (see below). And those products and beverages "can have a place in the market if it is regulated in a way that looks a lot like beverage alcohol," Bart explained.Since taking the reins of the BA, Bart's spent far more time talking about tariffs than he expected, however. Small brewer costs went way up starting during the pandemic and remain much higher than they were. Cans are a particular "pain point" that only intensifies with the recent war in Iran. That's because 30-40% of the price of aluminum is energy and about 20% of the new aluminum coming into the US comes from the Middle East, he explained. But cans still aren't markedly more expensive than bottles and plenty of small brewers lack the equipment to bottle instead of can, Bart pointed out, something that's unlikely to shift much in the near term. That said, small brewers are broadly "rethinking" their supply chain in response to these cost increases, Bart shared, including seeking ways to source more of their raw materials domestically or even locally.Consolidation Among Breweries an Old Story; Consolidation Among Distribs Point to Legal Structures Stories like the breaking news about Firestone Walker and Duvel USA taking on the Stone brand are part of a "long tradition" of consolidating brands "in beer and brewing," Bart reminded. There have long been periods when "there's excess capacity out there" and brands come together to more efficiently use it. But it's "too soon to comment really" on "who's doing it right and what's successful." To determine that, "the devil is gonna be in the details" of "how you sell those portfolios side by side," Bart thinks. In the past, success has been determined more by effectively integrating sales than by integrating production.Then too, "distributor consolidation poses challenges for small suppliers," Bart reminded. He understands the imperative and why it's happening. But because "distributors like scale and focus as they get bigger," that "poses challenges for those who are smaller." He often reminds brewers that "it's not your size that matters, it's your size over your distribution footprint," urging them to gain scale in smaller geographies. Generally, changes in the middle tier raise the importance of ensuring that state laws work for small brewing bizzes, Bart reminded, including having the option to self distribute and to "move to houses that want to focus on them," if they're available.Org Faces Challenges Alongside the Biz; Shifts in Big Events The Brewers Assn itself has faced its own challenges in recent yrs, Bart acknowledged, as the org is a "microcosm of the industry." The BA lost about $2 mil last yr, he said, and it's aiming to "cut that this year." Changes made to its large events, CBC and GABF, should help, he thinks. CBC is happening on a shorter schedule, Bart mentioned, and org "lowered the price" after hearing from members that it was "too costly and too long to shut down breweries." So the "goal was not to maximize profit" but to "keep it relevant for the community" and "make it a more accessible event." Final attendance numbers aren't in yet as a "shocking number of people still walk up and buy tickets to this thing" when they arrive, Bart said. But it looks like it'll be roughly even with last yr at 7-8K attendees, a notable change as org seems to have stemmed the years-long decline in attendance.

Better Start to 2026 Brightens Mood at CBC; Bart Runs the Gamut at Breakfast: Consumers, Styles, Advocacy

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