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Craft has been mighty blustery, facing a litany of headwinds from ever-increasing competition within alc bevs, shifting societal and consumer behavior, claims of reduced alcohol consumption, messy and expensive supply chains, historically low consumer confidence, so on and so forth. It's a familiar list, Brewers Assn prexy/CEO Bart Watson reviewed during his State of the Industry talk closing the Craft Brewers Conference in Philly this afternoon. But all the doom and gloom, the negative narrative around craft beer represents its own kind of headwind for the segment, he suggested. The reality isn't nearly so bad, he argued. For instance, craft production volume declined 5% in total last year, but "39% of craft breweries grew," he emphasized. That's about 3,800 small brewing bizzes, just "slightly more than the total number of cideries," an industry bright spot in aggregate last yr. Dig a little deeper and 44% of brewpubs grew and 42% of regional brewers grew last yr, Bart explained. Those types of brewers outperformed others, but 38% of taproom brewers and 35% of microbreweries grew as well. Lots of cos found a way thru, he reminded. And just as he commented yesterday, early 2026 trends suggest things are already looking up.Craft's "Vibecession" Accentuating the positive throughout his talk, Bart identified "some parallels" between the prevailing feelings about craft beer in 2025 and the term "vibecession" used by a TikTok economist to describe a broader economic sensibility. In a vibecession, "the numbers aren't as bad as you think, but the vibes are off," Bart summarized. And it's self-fulfilling: "perception influences behavior, behavior influences outcome," which further fuels the bad vibes. Last yr for craft, "no, the numbers weren't great," Bart said plainly. But "if you dig in" there were "lots of bright spots" and it's "not as bad as maybe you think."Distributed Craft Challenged Amid Onslaught of "Shiny Objects" Distributed craft was the "more challenging part of the market last year," Bart reminded. Declines steepened for both regional and microbreweries in 2025 compared to 2024. Production by regionals dropped 6%, with micros (under 15K bbls) down a full 9%, experiencing the "most acute pain" (recall, org released core data on craft brewer performance by brewer type last wk). In distribution, larger breweries tended to outperform as consumers appear to be "turning to the familiar in an era of churn."For distributing breweries, it's not just about "delighting the consumer," Bart reminded, using a favored phrase of BA board chair Fred Matt (see below). They must also "delight their customers," or wholesalers. Craft is no longer "the shiniest object" the way it was a decade ago, the last time CBC was in Philly. "Today there are numerous shiny objects" from "hemp-derived THC," RTDs and "hard pretty much everything" from "sports drinks to party punches."Beer distributors are expanding to new bev categories and many see craft as a place to cut, Bart reminded, citing survey results from Bump Williams Consulting. While declines in wine & spirits could create oppys for craft to pick up some of the slack, the more that categories and bev distribution converge, the more critical it is for small brewers to differentiate their products and brands to remain relevant, he underscored.But the challenges aren't just outside of breweries' own doors. Cost increases are often harder to pass on to consumers for distributing breweries. Additionally, "unused capacity continues to haunt the craft brewing industry." Just "55% of the available capacity was being used for brewing beer" last yr, BA estimates. That said, some capacity is being used to produce other beverages and "we've seen stabilization," Bart noted, including some "capacity coming offline."Hospitality Outperforms as Consumers Seek "Something More" In total, hospitality breweries, as Bart called them again, declined by 3% last yr, outperforming both craft and the larger beer biz by a couple pts. The improvement here from 2024 was driven by brewpubs, down just about 1.5%, while taproom production dipped about 4%, same as in 2024.Still, these brewers significantly outperformed on-premise trends for beer and especially craft beer sold outside of breweries, Bart highlighted. In restaurants, total beer volume declined 8% with craft down 10%, Bart said. In bars, beer declined 6%, craft 9%. And overall on-premise draft beer volume dipped 5%, while craft fell 10%. So brewpubs and taprooms "are doing something right to beat those trends," he said."The most successful" of these hospitality breweries are "pushing against larger societal trends" as Americans are simply "going out less." To-go, take out and delivery sales jumped from 12% of sales for full-service restaurants in 2019 to 35% in 2025 and from 74% for limited service restaurants to 90%. "If total traffic is up about 10%," that implies "a large decline in in-person traffic."To that end, compared to 2010, the average 15-29 yr old spent 45% more time alone in 2023, a "huge jump," Bart pointed out, citing fed data. "If the gravity of the phone and the couch have increased, the force necessary to push against it needs to increase," Bart commented, adding that "it clearly can still be done." Helping the many thousands of hospitality breweries, which make up a majority of the org's members, harness this force is a key reason why the BA brought in Will Guidara, restaurateur/former owner of Eleven Madison Park and more, author of "Unreasonable Hospitality," as the event's keynote speaker.Replay of 30-Yr-Old Story; This Too Shall Pass The narrative surrounding craft right now is "not a happy one," rehashed over and over in popular press that typically tracks "the rise" and then "the reckoning," Bart summarized. But it's not a new story either. When the NY Times published an article about craft's challenges last yr, a longtime member forwarded Bart an article the same paper published in 1997, he explained. Change some names, some dates, some categories in play and both articles essentially cover the "same ground.""That 1997 story starts just as gloomy" as the 2025 version. But it ends with some bright spots and hopefulness. Looking back at the "general arc" of the almost 30 yrs for craft brewing since 1997, the story is "undoubtedly positive." So "the doom and gloom was ultimately much less correct" than those brief closing bright spots. "Our community has weathered these challenges before," Bart said, arguing that there are "ample signs of a reemergence." In short, "this storm, like those before it, is going to pass."Phones Down, Beers (and Vibes) Up Bart, the BA and a growing number of industry members continue to try to remind folks about the upsides of the industry and also the experience of going out and drinking beer. The org's recent media assets for National Beer Day riffed on similar themes seen in mktg from larger brewers and cos across consumer products, Bart reminded: "Phones Down. Beers Up." The world looks particularly "dark and chaotic at times," he acknowledged, but "when you stop scrolling, put your phone down and pick up a beer, reality starts to look a lot better than the vibes."

Good Vibes Only: "No, the Numbers Weren't Great," But It's "Not as Bad as Maybe You Think," Bart Sez

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