Craft industry leaders reflect on the best of two difficult years

By Steve Graham

Charlie Hoxmeier is looking forward to 2022, and expects Colorado craft breweries to continue growing.

“The community of brewers and craft beer drinkers in this state is like no other,” he said. “Many companies across the state are still trudging through the lingering impacts of COVID ... but craft beer is part of the fabric of life in Colorado, and not going anywhere anytime soon.”

Hoxmeier is the chief brewing officer at Gilded Goat Brewing Company in Fort Collins.

He was among several Colorado craft beer leaders who said 2021 was better than 2020, but not as good as 2019 in many cases.

Jesse Sommers, vice president of Berthoud Brewing Co., said this year was more profitable and enjoyable.

Charlie Hoxmeier hoists a keg at Gilded Goat Brewing

“2021 was a lot more fun than 2020,” Sommers said. “It was great to see our friends back in the taprooms with us.”

He joined several craft brewers in thanking Colorado’s craft beer drinkers.

“Colorado has an awesome beer market. It's great to see the smaller communities continue to grow in the beer world,” Sommers said. “We are very fortunate to have a pretty beer educated populace, which is hugely beneficial when it comes to sales in liquor stores.”

Holidaily Brewing in Golden was a particularly bright star on the Colorado craft scene, enjoying substantial growth in both 2020 and 2021.

“We expanded our distribution footprint to four additional states, opened a second taproom in the Denver Tech Center, and grew our team by 43 percent,” said owner Karen Hertz. “Despite the challenges that 2021 brought, it was a successful year overall and we’re grateful for our community’s continued support.”

Holidaily’s growth far exceeded the national average.

“With our unique niche of brewing quality, gluten-free beers, we were one of the few breweries that saw exponential revenue growth in both our taproom and distribution outlets during the pandemic,” she said. “Our distribution sales averaged 68 percent growth in 2021. Our taproom sales increased 17 percent.”

Charlie Berger, co-owner of Denver Beer Company, said DBC wholesale numbers increased about 9 percent between 2020 and 2021, and noted that the industry is still being creative.

“Colorado brewers are industry leaders in both innovation and quality,” he said.

Michael Memsic, co-owner of Sanitas Brewing Co. in Boulder, said his brewery also finished 2021 very strong.

“We started off very slow with the winter shutdown still in effect, but finished with some of the best months in our history, especially in the taproom,” Memsic said. “This year was a great rebound from 2020 and we are stoked for what 2022 will bring.”

Nationally, the Brewers Association (BA) tallied a 6-percent increase in U.S. breweries in 2021, for a total of more than 9,000. The group estimates that small craft breweries contributed roughly $62 billion to the national economy, and accounted for more than 400,000 jobs, including breweries and related industries.

CAUTIOUS EXCITEMENT MOVING FORWARD

In 2022, the BA predicts craft production and brewery sales will hit record highs, though it warns that draft beer sales may still not return to the 2019 levels. To be sure, several Colorado brewers reported an uptick from 2020, but lower revenues than in 2019.

Will Herdrick, co-owner of Intersect Brewing in Fort Collins, said he doesn’t expect to see massive continued growth moving forward.

“Back in the ’90s, when the market was a fraction of what it is today, you saw the opportunity for massive growth and the regional breweries taking shape,” Herdrick said. “I don't think you'll see any new breweries obtain that type of growth organically for a very long time, unless they are owned by a large conglomerate and they simply buy the market share.”

He also noted that 2022 will be especially challenging.

“With the pandemic seemingly becoming endemic, it's going to be a year of learning how to adapt to the ‘new normal’ in taprooms,” Herdrick said.

Hertz, of Holidaily, agreed. She saw customers anxious to be in both the original Golden taproom and the new DTC outlet.

“Customers have missed out on the taproom experience the past couple of years due to the pandemic and they are craving a space to spend time with others and build community,” Hertz said.

NEW BREWERIES, NEW APPROACHES

More than 30 new breweries opened in Colorado this year. Brewers in the state like to talk about the cooperative and supportive nature of the craft beer industry, when time allows. Herdrick, at Intersect, said he couldn’t really scope out new competition this year.

“We're always laser focused on our brewery and our customers,” he said. “Raising two kids and running a business wipes out 99 percent of my time.”

In 2021, craft aficionados could return to the taproom, after a pandemic year of mainly packaged beer. Brewers found creative options for to-go beer in 2020 (and plenty of us were drinking heartily during the lonely and frustrating lockdown), but sales still slumped.

“Coming out of a challenging year, small and independent breweries persevered and found new ways to innovate among a changing environment and evolving consumer preferences and expectations,” said Bob Pease, president and CEO of the BA. “Craft brewers’ ability to take risks, innovate flavors, and build better communities has made the U.S. the craft beer capital of the world, and I can’t wait to see what next year brings for brewers and beer lovers alike.”

Gilded Goat was one of those creative businesses, relying on a subscription program to stay afloat.

“We have a very devoted audience and mug club that carried us through 2020 and helped us finish 2021 especially hopeful,” Hoxmeier said. “We made all the pivots and adjustments to accommodate changing customer behavior, like everyone else, and are eternally grateful for our gracious and understanding customers and staff.”

FEMALE DRINKERS ON THE RISE

Craft consumers are changing along with the industry. The BA notes that female drinkers under 25 outnumber young male drinkers, and the group expects the trend to continue.

Sommers said the change has happened in many ways at Berthoud Brewing.
“I'd say we noticed the balance shift in the brewery as well as our taproom,” he said. “Our head brewer is Ms. Samantha Gebhardt, a young and very talented female brewer. But on the consumer side, I think we see a pretty big shift in who is filling the seats.”

Hoxmeier saw the shift on Gilded Goat’s Instagram page.

“Despite a fairly stable demographic in our taproom audience, analysis of our social media trends indicates greater engagement with women 21-31 compared to males of the same age range,” he said.

However, he warned that the craft landscape may be forever changed.

“Consumer behavior has probably been permanently affected by the pandemic, but there will always be excitement surrounding the opening of a new brewery,” Hoxmeier said. “Although 5-year survival and beyond requires a commitment to quality beer and an authentic brand.”

Memsic at Sanitas agreed that Colorado has a very crowded and competitive beer scene.

“It is nearly impossible to survive as a brewery in Colorado if you are not making interesting, high quality beer,” he said.

Inflation and supply-chain disruptions may hurt breweries in 2022, and will likely increase the costs of crowlers and six-packs.

Memsic warned that aluminum supplies in particular are going to hit the industry hard.

“I think the can situation is going to hurt a lot of medium to large brewers, especially in the first half of the year,” he said.

Still, the brewers and industry analysts remain optimistic.

“Craft brewers’ ability to take risks, innovate flavors, and build better communities has made the U.S. the craft beer capital of the world, and I can’t wait to see what next year brings for brewers and beer lovers alike,” said Pease, the BA president.

Read the BA’s full 2021 Year in Beer report here.