Watson addresses industry with confidence

As Bart Watson hits the middle of his first year as Brewers Association (BA) president, I was most curious to learn how he sees the current state of the craft beer industry (mid-2025). I got a good read on that while attending his presentations at this spring’s Craft Brewers Conference.

In both his State of the Industry keynote address, and his hour-long talk with a group of beer journalists and communicators, he expressed a broad and clear—and also very positive—agenda for craft brewers and the BA.

His keynote topic asked if the market data measures from 2024/2025 are Headwinds or New Realities. He proffered it was some of both.

He noted this mixed bag includes some significant challenges:

• The count of craft drinkers continues to grow, but, even with more craft drinkers, they were not drinking more craft beer.
• Last year, craft beer sales were down 4 percent, which wa the worst year-to-year performance since the BA began measuring it in the 1990s.
• Today’s craft beer drinkers are also drinking more in other beverage sectors. 
• Brewers did better if they also produced beverages beyond beer. Breweries that did were up 1% versus the overall decline of 4%.
• Following the COVID years’ big sales declines, beer customers are still drinking less on-premise beer. Draft sales are still hurting.
• Instead of sticking with traditional beer styles/flavors, today’s younger beer drinkers are seeking broader flavor profiles. 
• Today’s customers have more options when looking for adult beverages and flavor categories. 
• The industry, along with the nation, is in midst of a tough economic climate. Price elasticity has increased in recent years. Tariffs may increase some beer prices.
• People are drinking a bit less overall, but that appears to be recovering.

Watson’s take from these factoids and trends: Don’t panic, get to work by offering products and strategies that align with what customers want.

Working with new market realities

In the early 2000’s when craft beer was building a base and preparing for its big leap up, the competition was about 100 percent Big Beer. Beer from small and independent brewers was the other, the new alternative beverage. Back then, competition from adult beverage categories such as non-alcoholic beer, THC beer, canned cocktails, and hard seltzers was either non-existent or extremely minuscule. 

Today, the lay of the land has changed dramatically. Competition from other beverage categories has increased. Craft beer is no longer the new kid on the block. In fact, it can be seen by younger adults as your old dad’s drink.

Many questions arise. How should craft brewers respond? How does craft recapture/recreate its old magic? Where does Watson see today’s market opportunities?

The answer is a multi-faceted update in thinking about product mix and business strategies.

Brewers should look closer at the products and flavors offered by their beverage competitors, Watson said that for people who don’t drink craft beer, research shows the biggest reason they report is that they do not like the flavor. This might be largely due to IPA’s dominance of the taps at many breweries. Strong bitter flavor is way behind fruity-juicy for younger, newer beer drinkers, who typically prefer lighter, more fruit-forward flavors.

Brewers can update their portfolios and taproom menus by offering more beer styles and flavors that appeal to entry-level customer. If they can’t make them in-house, at least offer commercial varieties of other popular beverage alcohol and NA products. Welcome into your taproom those folks who aren’t into traditional craft beer styles. Brewers should not concede that space to the competition.

Value alignment

Another big opportunity he sees: Today’s customers want products that align with their values. You have to show them your products do align — that’s more important now than ever due to all the other categories in competition with beer. 

Small and independent brewers should get more involved in their communities. Just operating a little corner taproom selling only beer may not be enough today for the brewery to grow or even to survive.

Many of today’s successful brewers look beyond their own walls and get more involved in things outside the brewery. These brewers find community issues, activities, and movements that they believe in and can get involved with. This recruits and attracts involved community citizens—not just beer geeks—to their businesses. Buying a brewery’s products becomes a way for a customer to support important community values, creates loyalty, and builds sales.

Watson says he hopes the BA can communicate strategies to better welcome a brewer’s community into its taproom.

Becoming more beverage inclusive

Watson reports that brewers can find increased success today by offering more options both in beverage and food. It seems a reality today that brewers are viewed by most customers as simply being a part of the overall hospitality industry. In that vein, the local taproom doesn’t just compete with other area taprooms, but must compete with all other beverage outlets, restaurants, and entertainment venues. 

This is especially true in a small population market like we have in West Virginia. There just aren’t enough craft beer-only drinkers to support beer-only taprooms. If you don’t sell some food and other beyond beer adult beverages, you won’t likely be successful.

Watson believes brewers must pick their fights carefully, both in product mix and sales territory. He noted that regional brewers are doing a little better than overall craft in this arena due to many regionals getting smarter about territory and product mix. 

While Watson reported brewery closings in 2024 outpaced openings, he said it was not by a lot. And the closing rate was only 5.5%

Putting that into context, “Five percent closings is still relatively low for an industry that is now largely hospitality operators,” he said. “The vast majority of those closings are very, very small businesses that don’t actually shift the overall industry that much.”

The smallest category of breweries—those producing under 500 barrels annually— were the worst performing, down 9% on the year. The best performing taprooms and brewpubs appeared to be the ones that were better at creating community meeting spaces or were helped by their food service.

But here again, Watson cautions us not to dwell on the negative. “Forty-three percent of breweries grew last year. We need to find more ways to celebrate that.”

A new time demands a new outlook

“What it looked like in 2005, it’s not going to look like today.” Watson told a group of beer journalists and communicators at CBC. “We need to tell our positive stories.” 

He’d like to see more reporting showing the broad population groups that are driving craft beer’s future, like younger adults, females, and minorities. 

“Brewers’ and craft’s demise are greatly exaggerated,” he said, “and we need to tell some of the positive stories. A lot of breweries had great years.”

Beer education remains important and needs to be emphasized, Watson says. He feels that a certain level of education is critical for people to understand craft beer. Going forward, he sees BA doing more efforts to provide tools for brewers to use in educating their customers.

“We’ve gotten off that in recent years, and need to do more focus on younger adult drinkers.”

He also says, that overall, the BA will continue to focus on its members and what their needs are.

“The specifics have changed but the overall vision has not.”

Coalition building

Watson expects to work with other beverage groups, but says it’s important to do it on a level playing field. He wants to be creative in addressing industry issues and problems. 

He will seek smart partnerships with other alcohol industry trade groups. He’ll continue to co-celebrate, lobby, and publicize with the overall beverage industry. He’ll continue working with other industry organizations, while advocating for laws and regs based on science.

One alcohol industry connection he sees growing in significance is the one between craft brewers and craft distillers. He noted that currently 700 of the nation’s 3000 craft distillers are also craft brewers. He thinks there could be more alliances between these entities.

In all the work needed to move craft beer ahead, Watson feels it’s important to evolve the definition of craft brewing to be more welcoming of other beverage types. 

To help differentiate the craft brewing industry in a manner that would help build stronger connections with customers and legislators, Watson suggests emphasizing the “small and independent” adjectives more to identify the brewers, and not so much just calling them craft.

“When you get to a bigger tent, keeping everybody under the same label is challenging,” he says.

He sees emphasizing the small & independent words as the most important thing that ties his BA members together. 

Still amazingly cooperative

Watson says you don’t see as many members of other mature industries cooperating on the state and national levels as you do in craft beer. He says craft brewers are highly collaborative. 

“People still want to contribute to the greater good.”

When asked what makes him most hopeful about the future of craft brewing, he responds: “Our members are innovative, fearless, entrepreneurs — many of whom have been through this before. The next generation [of brewery owners] are amazing people who are running amazing businesses. They are going to find their way through this. They’re going to do new cool things we would never even think of.”

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Bart Watson appears to be the kind of leader needed today by the craft brewing industry. His opinions and guidance are based on research, science, and careful observation—and not solely on craft beer passion. This is an encouraging, hopeful, and positive outlook— the kind now needed to move the small and independent brewing industry boldly into the future.

LINKS

CBC 2025 Recap
About Craft Brewers Conference