LONDON -- The craft-beer market in the United States will grow at a compound annual growth rate (CAGR) of 17.69% during the period 2017 through 2021, according to a new report from Technavio.
According to the report, Craft Beer Market in the U.S. 2017-2021, one of the major drivers for this market is the increasing number of craft breweries. "The market offers good return on investments, and this is attracting new players who are coming up with new product offerings," the report says. The increasing demand from consumers, especially millennials, is also aiding the market growth.
The number of breweries is expected to increase during the forecast period to meet the growing demand. The number of craft breweries in the U.S. increased by about 16% in 2016 compared to 2015. California and Colorado are two of the states with the highest number of craft breweries in the U.S. California has over 600 craft breweries, and Colorado has over 300 craft breweries.
The anticipated double-digit growth is welcome news to craft-beer brewers who have seen sales growth slow over the past year and a half.
In convenience stores, craft-beer sales were up 8% during 2016, compared to 26% growth a year earlier, according to IRI data. The beer category in all channels was down 3%, per Nielsen data.
According to the Technavio report, one of the major factors hindering the growth of the market is the high price of craft beer. "The cost of craft beer is almost twice that of conventional beer," the report says. "As craft breweries produce small batches of craft beer, they do not have the advantage of economies of scale. The high price of craft beer will deter price-conscious consumers from purchasing the product. It will hinder the growth of the market during the forecast period."
The study by London-based market research company Technavio was prepared based on a market analysis with input from industry experts, according to the company. The report covers the market landscape and its growth prospects over the coming years.
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