Colorado craft breweries have been at the center of Colorado’s identity for decades, but now they are facing a number of difficult challenges. Inflation, distribution issues and changing consumer habits are creating uncertainty about the future of the state's beloved brews.
BizWest recently conducted two CEO Roundtables with beer industry leaders to hear their thoughts and ideas for innovation in a rapidly-changing industry. KUNC’s Emma VandenEinde recently spoke with Chris Wood, editor and publisher with BizWest, about what the future of the industry could look like.
Some of those projections about the future of craft brews are hard to swallow.
“It's trouble, and it doesn't look like it's going to get better anytime soon,” Wood said. “It's all really taking a toll on the industry, with some of the brewers that we talked to saying that it's simply not as fun anymore to operate a brewery.”
Some breweries have had to adapt their products to offer things other than beer – from hard seltzers to ready-to-drink cocktails and wine. This is primarily due to the fact that Gen Z drinks about 20% less than millennials do—and if they do drink, it’s usually not beer.
Wood said breweries need to pay attention to these habits and find new ways to draw younger drinkers in if they want to stay alive.
“They have to really focus on the experience and the story that they have to tell,” he said. “If you go to High Hops taproom (near) Greeley, they have things like trivia night, they have bands, they have some of those things that would help attract those younger consumers.”
With inflation factoring into the picture, it’s not easy to simply raise prices for beer either. There’s still some supply chain issues lingering from the COVID-19 pandemic, along with aluminum and hops shortages, which all affect the industry’s bottom line. Additionally, some brewers are concerned about rising real estate prices pricing them out of cities.
But Wood said people expect a certain price for a drink, and if it falls outside of that range, they won’t buy it.
“Some brewers said they should be charging maybe $10 a pint for a beer, but that's a very high price for a lot of customers to pay,” he said. “The owner of High Hops taproom (near) Greeley told us that even $7 a pint is out of reach for most CSU students. And as a former college student, I can attest to that.”
Additionally, with the recent Colorado law allowing grocery stores to sell wine alongside beer, some experts are expecting some liquor stores in the state to close down.
But despite these challenges, the number of breweries in the state is stable and actually increasing slightly. The Brewers Association, based in Boulder, states that as of 2022, there were 440 craft breweries in Colorado. That’s an increase of 12 breweries over the previous year.
“Colorado has seen a number of breweries shut down this year, including Black Bottle Brewery in Fort Collins. But a lot of the time, another brewery will take over space vacated by a different brewery,” Wood said. “In the case of Black Bottle, Verboten Brewing out of Loveland is acquiring the former Black Bottle location for a new taproom.”
Still, many brewers feel gloomy about the future of the brewing industry, according to Wood and his observations of the two CEO Roundtables, painting a challenging picture for the years to come.
