Craft beer rates slow in 2016 while digesting major growth

The American craft beer industry saw its tremendous growth slowed in 2016 from previous years, even as local brewers move forward on their own expansion plans.

The U.S. industry experienced last year an increase of 6 percent of volume with production of ?24.6 million barrels, the Brewers Association trade group reported Tuesday. It also had a 10 percent jump in retail value in 2016, for an overall total of $23.5 billion in sales.

The group represents breweries that produce 6 million barrels or less annually or have a less than ?25 percent ownership stake by large brewers, a rule that excludes Petaluma-based Lagunitas Brewing Co.

While impressive, the numbers were smaller than in 2015, which showed a 13 percent rise in volume and a 16 percent growth in value. And it comes at a time where there have some been notable problems, including layoffs at Stone Brewing Co. in Escondido and Green Flash Brewing in San Diego, as well as San Francisco’s Speakeasy Ales & Lagers being placed into receivership because it could not pay its bills.

“Small and independent brewers are operating in a new brewing reality still filled with opportunity, but within a much more competitive landscape,” said Bart Watson, chief economist of the Brewers Association, in a statement. “The average brewer is getting smaller and growth is more diffuse within the craft category, with producers at the tail helping to drive growth for the overall segment.”

The number of operating breweries nationwide rose by 17 percent to a total of 5,301. In 2016, 826 breweries opened and 97 closed.

So far, the local industry remains buoyant. There are roughly 30 breweries operating in Sonoma County with a spate opening last year and early this year. There also have been expansion plans, with Bear Republic Brewing Co. opening a new location in Rohnert Park this year and cult favorite Russian River Brewing Co. of Santa Rosa breaking ground next month on its new Windsor location.

“I still believe the best days are ahead,” said Christopher Jackson, owner of Seismic Brewing Co. in Santa Rosa, which aims to have its production available locally in taprooms by May.

Seismic is one of the most ambitious ventures in the industry in recent years; its multimillion plant will be one of the most environmentally friendly breweries in the country. Jackson, who is co-proprietor of his family’s Jackson Family Wines business, noted that the wine industry continues to grow, even though at a less robust pace. It showed a mere 2.8 percent increase in volume last year, he said, putting craft beer’s trajectory in perspective.

“I still see increased consumer choice,” he said. “I think growth rates are healthy and sustainable.”

You can reach Staff Writer Bill Swindell at 707-521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.