The Current State of Craft Breweries

The past decade has seen a huge increase in the number of craft breweries not just in Minnesota and the Midwest, but all across the country. As of June 30th, 2018 there were 6,655 breweries nationwide, up from 2,420 just from 2012. Minnesota has increased from 35 in 2011 to 158 in 2017. The Brewers Association estimates an additional 2,500 to 3,000 are planning to open nationwide in coming years, which will still easily outpace brewery closings.

Here at Kloster Collateral, we’ve been keeping an eye on brewery equipment values, as we’ve appraised nearly a dozen breweries in the past couple years. While used equipment prices still appear to be holding strong, some recent statistics have shown what we’ve been expecting…a gradual decline, or at least plateauing, in the craft brewery segment.

The Brewers Association reports that although breweries of all sizes are still growing, the rate of growth is starting to slow. The smallest brewers (10k or less in CE – case equivalent – yearly sales) continue to show the fastest growth, 42% in 2017 compared to 30% in 2018. Large breweries (100k – 1MM CE) went from 6% growth in 2017 to -1.5% growth in 2018.

What does all of this mean from a collateral perspective? It still appears that there is strong demand for new and used brewing equipment. has an active classifieds section with lots of equipment being bought and sold. Conversations we’ve had with brewery personnel suggest some softening on wait times for stainless tanks, which were being procured from Korea and other overseas manufacturers for a long time due to wait times from North American suppliers. A positive factor regarding commercial brewing equipment is that it is made to last, as is most food and beverage stainless steel equipment. We typically assume a 30 year life expectancy on name brand brewing systems and tanks.

So while this is an industry we are watching closely, unless there is an unforeseen catastrophic change to impact the craft brewing industry, we see used equipment values remaining relatively strong for the time being.