Despite the lingering effects of the pandemic-induced shutdowns, craft beer industries have begun to return to normalcy in the last year. It was the first time that production declined by 9% in the modern craft era, caused by the pandemic. However, the industry still faces some challenges.
It is no longer the case that breweries and brands are introduced seemingly endlessly, as they have done for much of the past century. There are issues that the industry must deal with daily, such as: future shutdowns, supply chain problems and the sudden rise of the RTD category and beyond beer (think hard kombuchas, seltzers, ciders, pops and juices). Fortunately, modern brewery software like Beer30 can help overcome these hurdles.
Breweries that specialize in craft beer add variety to the beer market. As the industry grows, there will likely be several challenges and opportunities during 2022. Here are some challenges craft breweries may face in 2022.
The pandemic has impacted supply chains, introduced new competitors like ready-to-drink (RTD) beverages, and raised concerns about future shutdowns. Although the outlook for craft breweries in 2022 is promising, there are still significant challenges. Below, we discuss the main obstacles and how the right brewery management software can assist in navigating them.
Water is a critical component for brewing craft beer. Most craft breweries rely on a clean and consistent local water supply, and the water used must meet specific mineral requirements. On average, it takes seven gallons of water to produce one gallon of beer, making water management crucial.
Environmental factors like droughts and heat waves also impact the availability of key ingredients such as hops and barley. These environmental challenges can be better managed with brewery software, which can track ingredient sourcing, manage water usage, and forecast supply needs based on environmental changes. Data-driven insights from the software help breweries adjust to these variables more efficiently.
The diversity of craft beer production schedules presents another challenge for small breweries. With over 6,000 craft breweries producing more than 20,000 beer brands in the U.S., maintaining a predictable production schedule can be difficult. Brewery software allows breweries to manage production schedules more effectively, enabling better inventory control and minimizing the risk of overproduction or stockouts.
Using software to automate production tasks and track key metrics helps brewers maintain consistency while scaling production. This optimization ensures that breweries meet market demand and maximize profitability.
In the craft beer market, consumers are not always loyal to specific brands. Craft breweries must continually innovate and introduce new flavors to stay relevant. Seasonal brews, collaborations, and limited-edition releases help breweries stand out in a crowded market. Brewery software plays a vital role in managing product development, tracking customer preferences, and monitoring sales data to identify emerging trends.
By leveraging software to track product performance and customer feedback, breweries can quickly pivot their offerings to meet changing consumer demands. This adaptability is key to maintaining a competitive edge.
A growing number of small brewers have been distributing to retail and restaurant outlets to compete within the $26 billion craft beer market in the United States. However, this trend has also created new challenges. Among them is a reduction in wholesale margins.
Further, brewers who market in a larger geographic area may need to invest in attractive packaging and displays for their products. These materials bring prospective customers into contact with the brand. Manufacturing these materials is, therefore, more costly.
Breweries need to communicate their value to loyal customers to make up for these increased costs. Perhaps your craft brewery creates the most incredible fan-favorite flavors that aren’t available anywhere else. Or maybe you donate a portion of the proceeds of each can to a local charity. Whatever your strategy, be sure to be creative and fully committed!
The explosion of craft breweries since the late 1980s has created a fiercely competitive environment. This saturation has made it increasingly difficult for breweries to stand out. Along with increased competition, there is a higher demand for skilled employees.
Brewery software can help smaller breweries differentiate themselves by improving operational efficiency, enhancing production quality, and enabling better decision-making. With access to real-time data, breweries can make smarter business decisions and remain competitive in a saturated market.
Today, craft breweries vary significantly in financial stability and business operations. In the coming year, companies that can address challenges will likely prosper. The current saturated market may pose challenges for other, less-equipped breweries in 2022.
Taproom and brewpub beer shifted out of the draft and into packaged beer last year. Thankfully, we’ve seen a remarkable rebound in craft beer sales this year, helping craft beer recover from the blow 2020 dealt. The industry is forecast to grow by at least 5% in 2022. Even if we don’t reach the levels we had before COVID, we will be close to doing so.
Fortunately, the number of brewery closures was lower than anticipated. It is inspiring to see craft breweries persevering. Their small size allows them to be agile and adaptable while quickly discovering new business opportunities. This is what makes them successful. Closings have slowed, and we are optimistic about the industry as a whole.
As always, our goal at The 5th Ingredient is to help brewers focus on the quality of their beer. With our Beer30 brewery software, breweries of all sizes can reap the benefits of real-time data at their fingertips and combat the above issues.
