Craft beer and the breweries that make it have had quite the moment over the past decade and a half, recording explosive growth.
According to the Brewers Association for Small and Independent Craft Brewers, the number of craft breweries across the country has grown more than fivefold since 2010.
But recently, those good times may have ended, with local craft breweries across the country now hurting or even closing, and St. Louis’ market hasn’t been immune.
In the past few months, Urban Chestnut Brewing Co. filed for bankruptcy protection, O’Fallon Brewery closed, and Earthbound Beer announced it will shutter later this year after 10 years in business.
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“The craft beer core demographic has aged about a decade since we’ve been doing this, and we’re not necessarily replacing them with new drinkers, and that’s for a variety of reasons,” said Stuart Keating, a co-owner of Earthbound Beer.
There are more alcoholic drinks to rival craft beer these days like natural wine, craft spirits, ready-to-drink cocktails or hard seltzers, he said.
The plethora of options may be siphoning away some beer drinkers, said Fausto Gonzalez, an assistant professor of marketing at the Olin Business School at Washington University.
“The kinds of people who tend to drink a lot of craft beer also just tend to drink a lot of alcohol in general relative to the rest of the population,” he said. “These people are also interested in drinking different varieties of alcohol, and you get that play out in terms of people exploring different products.”
Price can play a role too, especially after the pandemic, Gonzalez said.
“Inflation has affected costs in all sorts of different ways, and so people are scaling back,” he said. “We’re spending in different ways.”
The cost of beer at and away from home has continued to rise, and at higher rates than wine or spirits in recent years too, Gonzalez said. And consumers may be considering the health impacts, he added.
Keating said he has noticed people just aren’t drinking as much as they may have been before.
“Especially younger people aren’t drinking, and if they are, they’re doing it in the privacy and safety of their own home,” he said. “People just aren’t going out as much.”
All of these factors may lead to more closures or a reduction in market presence for some local breweries, Keating said, adding that he doesn’t think the local market is oversaturated.
“It’s like asking if St. Louis is oversaturated for restaurants,” he said. “We expect restaurants to turn over because some concepts work, some don’t. Some places that are really good don’t make it for reasons that are outside of their control.”
Keating admits Earthbound did feel some financial squeeze, but he added current owners of the brewery had begun considering an exit last fall. The venture, which had always been focused on experimenting with “weird beers,” had run its course, he said.
“We’ve been doing it for a decade and restaurant years are like dog years — you age seven years for every year you spend doing it,” Keating said. “We’re all a decade older than we were when we started this, and we’re interested in doing different things.”
The reasons for Urban Chestnut’s bankruptcy filing or the closing of Earthbound or O’Fallon Brewery may not mirror each other, Gonzalez added.
“Although the timing suggests that maybe there is some of this pullback in consumption happening in the St. Louis region, I wouldn't necessarily say that’s sort of a trend that’s going to carry through to St. Louis as a whole,” he said. “I think there is still demand for craft breweries because people like supporting local businesses.”
Keating agrees, adding they serve an important function as spaces for the community to gather.
“They operate differently than a Chili’s or TGI Fridays or whatever,” he said. “I used to joke that nobody’s ever had a good idea at a Chili’s or Applebee's because you don’t go (there) to have great, interesting conversation.”
“St. Louis on the Air” brings you the stories of St. Louis and the people who live, work and create in our region. The show is produced by Miya Norfleet, Emily Woodbury, Danny Wicentowski, Elaine Cha and Alex Heuer. Jada Jones is our production assistant. The audio engineer is Aaron Doerr.
