Craft Beer Sales Fall as Taproom Breweries Outperform

The U.S. craft beer industry contracted in 2025, but breweries that leaned on food, service and on-site hospitality held up better than the rest of the market, according to annual data released Monday by the Brewers Association.

Total craft beer production fell 5.1% last year, as broader weakness in beer consumption continued to pressure the category. Even so, 39% of breweries reported growth and another 1% said production was flat, meaning about two in five breweries avoided a decline.

The report points to a widening gap between breweries that depend mainly on packaged beer sales and those that have built business models around taprooms, brewpubs and other hospitality-driven operations. Craft brewers also edged up their share of the overall beer market by volume, to 13.3% from 13.2%, even as total beer volume fell 5.7%.

Matt Gacioch, an economist at the Brewers Association, said in a statement that the industry outlook suggested “cautious optimism,” though he added that it was still too early to say the market had settled into a new normal. He said breweries that offer “consistent quality, human connection, and unique experiences” were most likely to stand out.

Among business models, brewpubs were the least affected. Their overall decline was 1.7%, smaller than the losses reported by taprooms, which fell 3.9%, microbreweries at 8.9% and regional breweries at 5.9%. The stronger showing for brewpubs reflects a broader shift toward businesses that can capture more revenue from food and service, not just beer.

Retail dollar sales for craft beer fell 3.6% to $27.8 billion in 2025, a smaller drop than production because of higher average prices and more on-site consumption. Craft beer held a 24.6% share of total beer retail dollar sales, essentially unchanged from the year before.

Employment in the sector also declined, with about 8,000 jobs lost and total employment falling to 189,000, down 4% from 2024. The number of operating craft breweries dropped 2.9% to 9,578. New openings slowed sharply to 300 from 518 a year earlier, while closures totaled 481, down from 591.

The slowdown in openings suggests fewer easy opportunities for new entrants and more competition for shelf space, tap handles and customers. At the same time, the data shows that breweries with a clear identity and a strong in-person experience are still finding ways to grow or at least hold steady even as the broader craft beer market contracts.