For the past two and a half years, my project with Hop Take has been to tell you about things that are happening in the American beer business, and offer social, political, and historical context to help you make sense of why they’re happening. I’ve mostly tried to avoid making predictions here about what might happen in the future, though, for the obvious reason that I can’t say for sure, and the slightly less obvious reason that I hate being wrong.
Still, my penultimate column of 2024 was a reflection on the year that unfolded for the country’s ~9,700 breweries, so it feels editorially appropriate to use these inches to look ahead to 2025. It’s also become a bit of a tradition. Last year, I filed a similar forecast, flagging the following storylines that I thought would shape the beer industry in 2024:
- Anheuser-Busch InBev’s progress on the comeback trail.
- Boston Beer Co.’s ability to defend Twisted Tea’s crown against an army of challengers.
- The fight for ABI’s shelf space between Molson Coors and Constellation Brands.
- Monster’s monster sophomore season sales opportunity.
- The pace of consolidation among craft brewers and distributors.
- Statehouse battles over tax equivalency, soft-to-hard alcopops, and more.
As predictions go, these are fairly broad, a far cry from the well-defined, quantifiable outcomes on which Vegas bookies might allow you to place actual bets. But with the benefit of 12 months of hindsight, I think they’ve held up pretty well. So let’s spin the wheel again, shall we? All of this is conjecture, and none of this is investment advice. Here are the turning points and trends I think will play major factors in how 2025 unfolds for the United States’ brewers, distributors, retailers — and of course, its millions of beer drinkers, too.
How — if at all — Trump’s threatened deportations and tariffs affect Modelo et al.
Last April, I ran a thought experiment, gaming out factors that could halt the meteoric, generational rise of Constellation Brands’ market-leading Mexican lager leviathan. Of all the hypotheticals, the darkest one has proved to be the most urgent. With the incoming administration putting forth frankly racist, sociopolitically incoherent proposals to deport millions of people (many of whom buy Modelo, mind) and start a trade war on the U.S.-Mexican border (south of which lie Constellation’s multi-billion-dollar breweries), the country’s third-largest macrobrewer is uniquely vulnerable among its peers to the draconian, delusional economic regime Trump and his allies insist they’ll impose in 2025.
The long-awaited/-feared arrival of the 2025 USDA dietary guidelines.
It’s been over a year since Senator Ted Cruz told President Biden to kiss his ass in reaction to a bunk headline about the federal public health bureaucracy supposedly angling to force American drinkers to limit themselves to two drinks per week. It wasn’t, but the battle over the United States Department of Agriculture’s scheduled revisions to its Dietary Guidelines for Americans (DGA) regarding beverage alcohol has only gotten uglier since. I’ll be watching closely how corporations, watchdog groups, and politicians jockey to influence the final draft of the 2025 DGA, and what effect — if any — it has on challenges to the brewing industry in the courtroom and drinkers’ actual behavior in the beer aisle.
Whether the mortar between Big Craft and Small Craft finally crumbles.
Longtime beer writer Jeff Alworth contended — I think correctly — that 2024 was the year that Big Beer “divorce[d]” craft beer. Will 2025 be the year the contradictions between the biggest Brewers Association-defined craft brewers — your Boston Beers, your Sierra Nevadas, your Monsters and Tilrays — heighten to the point that an industrial taxonomy grouping those firms in with craft brewing’s tiny-volume long-tailers simply no longer best describes reality? I heard more chatter from brewers to this effect over the past year than any other point in the decade and a half I’ve been on the beat. Can the BA hold the center together on independent brewers as the segment weathers its second shakeout? Incoming president/CEO Bart Watson is the man for the job — but he’s got his work cut out for him, and then some.
How much more share Twisted Tea loses in the segment it built.
Apropos of the item above, Boston Beer Co.’s performance in 2025 will depend in large part on how well it’s able to shore up the brightest spot in its portfolio against direct and indirect competitors big and small. Obviously, BBC is just one company, but its unique position in the market — first-wave craft-beer champion with Samuel Adams, hard seltzer segment builder-turned-cautionary tale with Truly, mainstream-media frame-setter with eminently quotable co-founder Jim Koch — gives it outsize influence on how retailers, distributors, and investors understand the beer category. If Twea’s growth continues to give ground (and especially if that happens concurrent to continued Truly trouble), it’ll set a tough tone for the industry writ large.
What Congress does with hemp-derived THC in the new farm bill… if there is one.
We already know craft brewers in states where it’s legal have found great growth opportunities for nonalcoholic beverages infused with tetrahydrocannabinol. What we don’t know is how long those opportunities will last. Part of the reason that, for example, California was able to issue an emergency ban on the products in September 2024 is because federal law is painfully vague on the matter of their existence. It’s been six years since Congress passed a proper farm bill, and Capitol Hill insiders and industry observers alike are dubious that it’ll pass another in 2025. If federal legislators beat expectations on this front, it could be bad news for THC and the brewers that have been able to capitalize on it; ditto if they don’t, though. We’ll see if the limbo persists another year.
Whether distributors can secure the permanent tax exemption they’ve long coveted.
Stay focused on Washington, D.C., because I expect action there in 2025 that will influence the pace of middle-tier consolidation for the rest of the decade. In 2017, the first Trump administration passed tax cuts for our big beautiful billionaires at the middle class’s expense. One of its mechanisms for doing so was the temporary 20 percent tax deduction for pass-through businesses — a corporate structure in which many (if not most) beer wholesalers are organized. The deduction is set to expire at the end of 2025 if it’s not extended or made permanent. You could imagine that a normalized tax bill, combined with the generational shifts within the middle tier’s ownership class and fierce competition from already-consolidated competitors, could trigger another wave of mergers and acquisitions as larger, less local wholesalers and/or Wall Street interlopers provide exits to the local multi-millionaires looking to cash out their family’s lucrative franchises once and for all. Is that like… a good reason to codify more tax cuts? The National Beer Wholesalers Association says yes, and what the powerful trade group’s constituents want, they often get.
How craft brewers respond to encroachment on hard-won c-store and on-premise placements.
We spent most of this year talking about the ways in which craft beer has struggled compared to the category. Two channels in particular strike me as must-wins for the full-flavored beer segment in 2025. Customer demand for single-serve stovepipes in the convenience store have made Voodoo Ranger a household name (and credit to New Belgium Brewery for building that demand, no doubt). But those coolers ain’t getting bigger, and they’re already crowded, with more competition for placements from flavored malt beverages, wine-based canned cocktails, non-alcoholic super-premium energy drinks… you name it. Defending c-store placements will require craft brewers to sharpen their value propositions and tell new stories about the segment, which is hard but necessary. Can they do it? Will they? Also hard but necessary: defending placements in bars and restaurants, concert halls, and stadiums from many of those same competitors. Draft wine and cocktails exist, but they’re sub-optimal while draft beer is super optimal. I’m heartened by reports from Kate Bernot and Bryan Roth at Sightlines about craft brewers already bucking broader trends and capturing real growth by going after tap handles. Their peers would do well to follow, and the segment will do well if they do.
🤯 Hop-ocalypse Now
Mere hours after we published last week’s Hop Take citing Boston Beer Co.’s woes as one of the defining beer business stories of 2024, the firm advised investors that it was lowering its earnings projections by almost $2 per share and paying one of its contractors $26 million in exchange for a revised agreement that will (presumably/hopefully) save money long-term. If 2023 was the winter of Anheuser-Busch InBev’s discontent, I think this year may go down as BBC’s own. Yeesh.
📈 Ups…
Tilray Brands’ outspoken chief exec Irwin Simon is now positioning 10 Barrel Brewing Co. sub-brand Pub Cerveza as a tariff-free alternative to Modelo/Corona; never change, Irwin… A new University of Michigan study shows teen drinking rates have continued to decline since the pandemic, defying fears of a backslide on historic reductions since the ‘90s… Hop growers’ acreage reductions appeared to put a dent in the sector’s oversupply in 2024…
📉 …and downs
Fifteen of the top 25 best-selling beer vendors in Circana-tracked off-premise retail recorded dollar and volume declines year-to-date through November 2024… If Bud Light’s trends hold through the end of 2024, it’ll have lost some $1.35 billion in sales since last year’s fiasco began… ABI’s ill-fated start-up arm ZX Ventures announced plans to shutter RateBeer come February 2025…
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