Craft brewers, once the daring entrepreneurs of the beer making world, are facing stiff challenges. People are drinking less, production costs are rising, employees are hard to find and there are more beverage options on store shelves.

The proof is in the numbers. U.S. beer shipments are expected to sink to their lowest levels, according to the Beer Marketer’s Insights, a trade publication. Last year in Oregon, 20 breweries closed their doors, leaving about 350 breweries in operation.

But not everyone is feeling the squeeze.

“Like everyone else, we have noticed a change in the craft beer industry, and it has slowed things down for us a bit,” said Ryan Duley, Sunriver Brewing Co. director of marketing. “The industry and our business were on such an radical climb with many years of double-digit year-over-year growth. I know a lot of us in the industry knew that kind of trend couldn’t last forever.

“At Sunriver Brewing, we are happy that we are one of the breweries doing relatively well through this transition.”

Surviving change

Central Oregon brewers say they can survive slumping sales

Central Oregon beer landscape changes

Craft beer contributed $8.7 billion in 2022 to the Oregon economy and $72.2 billion nationwide for the same period, the year data are most current, according to the Brewers Association.

While unrelated to slumping sales, Central Oregon’s beer landscape did experience changes: Cascade Lakes Brewing announced it would close its west-side location and Anheuser-Busch sold 10 Barrel Brewing Co. to Tilray Brands, a cannabis lifestyle company.

Changing hands

Cannabis company completes purchase of 10 Barrel Brewing

In Central Oregon, there are about 22 breweries competing for shelf space and the attention of consumers, who are now being tempted by other adult beverages like mocktails, cocktails, CBD infused beverages, seltzers, non-alcoholic beer and cannabis.

Across the country, sales fell more than 5% for U.S. beer, according to the Beer Marketer’s Insights, a trade publication.

“It’s a tough time right now for breweries,” said Sean Albrecht, Bend Brewing Co. head brewer. “We have a great spot and that thrives during the summer, and it’s something other breweries don’t have.”

Many breweries have still not recovered from pandemic-related lockdowns that forced many of them to halt production of their draft beer sales and pivot to canned products, according to the Brewers Association. Draft beer sales, according to the Brewers Association, are down 30% nationwide.

Closure

Cascade Lakes Brewing Co. to close west Bend location

Craft beer growth not sustainable

For years, the craft beer industry had sustained double digit growth, said Ben Edmunds, Oregon Brewers Guild president.

“That kind of growth wasn’t sustainable,” said Edmunds, who is the brewmaster for Breakside Brewery in Portland. “The industry is in a more maturing stage. The closings are a sign of a normal, market maturing.”

After all those years of growth, the closures reflect a marketplace that is self-regulating, said Lester Jones, National Beer Wholesalers Association economist.

“A couple years of a bad years, doesn’t make a trend,” Jones said. “We have to keep in mind that the industry has had a good run for 25 years. There is still so much innovation going on.”

Innovation helps bottom line

Some of that innovation is a response to changing consumer tastes that now welcome non-alcoholic brews and seltzers, Edmunds said.

“This is new,” Edmunds said. “Brewers are paying attention. Those who are not, need to rethink their line and revamp.”

At Crux Fermentation Project in Bend, sales of its non-alcoholic beers, which are sold under the label NØMØ, jumped 25% in December, compared to the same period the year before, said Cam O’Conner, managing director and Crux Brewmaster.

“It looks like this January will be our best month of sales for our NØMØ products,” O’Conner said. “Usually, the summer months are the best. We’re going to eclipse those months this month.”

Craft beer consumers are also looking for beer with fewer calories and less alcohol by volume products, said Albrecht, of Bend Brewing.

“There’s a lot of competition,” said Albrecht. “People are conscious now of how much money they’re spending. It’s definitely a factor. We are keeping an eye on the trends and working to make our business run more efficiently.”