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Highlights from the 2024 Craft Brewers Conference

Craft brewers decamped to Sin City in April for the 2024 Craft Brewers Conference (CBC) and BrewExpo, hosted by the Brewers Association.

Here are highlights from the event in Las Vegas:

Keynote: Uncle Nearest’s Fawn Weaver On Why Staying Small Wasn’t an Option

Uncle Nearest Distillery founder and CEO Fawn Weaver disregarded the advice of the spirits industry’s old heads on the way to building a billion-dollar brand, she shared during her fireside chat with Crowns and Hops Brewing co-founder and CEO Beny Ashurn on the opening day CBC.

“Literally every single thing that everyone told me, ‘This is what you do not do,’ we did,” Weaver said.

The path less traveled for Weaver included launching in control states when others suggested that she start in open states; expanding distribution nationwide within two years when others told her to try to focus on her home state for five to seven years before expanding; and leaning into awards instead of a brand story, when others told her that no one cares about awards.

“No person of color has ever succeeded [in the industry],” she said. “No woman at the top has ever been at the top. So why would I listen to what has always worked?”

Five years later, Weaver is lauded for her success in building the Uncle Nearest brand. The road to more than 1,100 awards for a brand that celebrates the story of the first known African-American master distiller is about being authentic and representing women and people of color in a predominantly white male dominated business, Weaver shared.

“I realized that if I could break through every ceiling, every barrier in this white male industry, that everybody else can do it in every other industry,” she said. “So I wasn’t representing hope for the spirits industry; I was representing women and people of color, period.”

When Uncle Nearest launched in 2017, Weaver’s women-led team was met with indifference and silence from supplier companies, retailers and distributors who wouldn’t return their calls. Weaver leaned on her husband, a Sony Pictures executive, to get through to decision makers.

When her husband reached out, those decision makers either took his call immediately or returned it by the end of the day. The decision makers had two questions for Weaver’s husband: Do you play golf? And do you drink beer?

Weaver said this allowed her to fly below the radar, which informed her strategy behind landing news stories in Uncle Nearest’s early days. In those stories, she wasn’t referred to as founder and CEO, but the chief historian, because “that’s something America could swallow at that time.”

Her true role as the driving force behind Uncle Nearest didn’t become public until 2019. And even then, the fact that the company was women-led and Black-owned didn’t come out until 2020.

“Why?” she said. “Because the juice can speak for itself. And if all ego is cast aside – don’t care what my color is, don’t care what my gender is – and if all of that wasn’t put aside so the juice spoke for itself, I would not be sitting here right now.”

The juice attracted consumers but the story kept them engaged, Weaver continued.

Through its growth period, Uncle Nearest has remained independent and resisted investment from strategics and private equity, including a $2 billion offer for the company, Weaver claimed. Instead, the company has relied on investment from 170 individual investors.

To build the brand, Weaver shared that she needed $230 million.

“What beer brand needs to do that?” she asked.

The decision to lean on individual investors has created 170 brand ambassadors who act as “an extension of myself,” Weaver said. And they have helped secure multiple national accounts.

Over the last year, Uncle Nearest has turned into an acquirer. In October 2023, the company acquired cognac maker Domaine Saint Martin. The company appears poised for more deal making, as Weaver teased an acquisition of a craft spirit brand – one that attempted to stay small but ultimately will be sold to Uncle Nearest once due diligence is completed.

“With craft distillers, there’s always been this pride in staying small,” she said. “The company that I’m acquiring – phenomenal company that was trying to stay small. The problem is you stay small too long, you will die or you will have to be acquired, and you will be acquired at a loss because you never had a goal or a dream to be bigger.”

Several times throughout the discussion, Weaver challenged the notion that brands should remain small. She added that there’s a piece of the craft beverage movement “that is so hung up on ego” and a desire to do everything themselves.

“There isn’t that much pride in doing your own accounting,” she said. “There is nothing great about aspiring to be small. It’s hard to be big when little’s got you.”

The commentary highlighted a striking difference between the trajectory of craft distillers and craft brewers, with the majority of the 9,683 small brewers producing fewer than 1,000 barrels of beer annually. The BA has championed those small and independently owned craft beer makers, while excluding those who have been acquired by a larger bev-alc producer from its ranks.

Weaver also shared that Uncle Nearest is trying to lift up other BIPOC companies along the way The company hosted 130 BIPOC founders, who were afforded the opportunity to pitch “all of the gatekeepers” in the industry, from distributors to retailers to investors.

“If we can make it to the top, we’re bringing everybody with us,” Weaver said.

Weaver concluded that success doesn’t make the work easier.

“The higher you go up, the thinner the atmosphere, the more difficult it is for you to breathe,” she said. “If you’re looking to get to this moment of easy, drop out now. If you’re going to the next level for purpose, then nobody can knock you off that mountain that you’re climbing.”

Bart Watson: Differentiation Vital for Craft to Return to Growth

For craft breweries to return to growth, they have to do more than just make great beer, BA chief economist and VP of strategy Bart Watson said during his state of the industry address on Day 2 of CBC.

Small and independent craft production declined -1% in 2023, according to the BA’s annual production survey. More than half (54%) of surveyed breweries recorded a decline in production, and the gap between openings (495) and closings (418) narrowed.

Much of craft’s decline is due to demand, which has followed a “textbook” S-curve pattern of increasing rapidly 10+ years ago, to now becoming static as product is easily accessible and no longer new. From 2012 to 2019, the number of craft drinkers was growing an average of +3.5% annually. From 2019 to now, that growth has compounded to +1.6%.

The cost to make, market and sell beer has also continued to increase, as “pretty much everything has gone up in cost in recent years,” and craft revenue has been unable to keep up.

“The crux of this challenge is not necessarily the input price increases [for operations], but the combination of that with our inability to follow them up in pricing,” Watson said.

“When you look at other consumer product goods categories, some of them would just pass those prices on to the customer,” he continued. Craft’s hesitancy to do so is a response to the state of supply and demand, and how relevant companies feel their brand is “relative to the total category.”

There is still room – and reason – for optimism, according to Watson. Forty-four percent of craft breweries who responded to the survey, recorded an increase in production in 2023.

“That 44% represents thousands of companies that faced all those challenges that I already laid out for you, and still found ways to rise above and find growth,” he said.

Craft breweries are also starting to redefine what “growth” means to them.

“When I talk to brewers about distribution in the past, it was always, ‘Where can I go next? How much beer can I sell?’” Watson said. “This year, I’ve heard a lot of reframing around where are the places and brands that I can sell that are actually going to make me money.

“Craft is entering its era of operations,” he continued “People are recognizing that it’s not just about the great beer you make, but you have to have a profitable business behind it.”

Craft has the ability to “restart” growth as a segment, but it will rely on companies either finding more occasions for their brands, or bringing new drinkers into the segment. Both pathways require companies to lean into what makes them different in a sea of choice across not just beer, but all bev-alc.

“It made a lot of sense in that era of rapid growth to stick close to the herd, to do what was working, to make the styles that everyone else was making, to have the industrial chic warehouse taproom that everybody would expect with craft,” Watson said. “That said, in an era of incremental growth, that’s not going to work for everyone collectively.

“To find those new customers, win those new occasions, we’re going to need companies to find different paths, find their own unique paths,” he continued.

NB2A: Black-Owned Breweries Are Growing Based on Craft’s Original Playbook – Authenticity and Community

While craft finished 2023 in decline, Black-owned craft breweries were able to grow, according to National Black Brewers Association (NB2A) executive director Kevin Asato in a press conference ahead of the World Beer Cup award ceremony on Day 3.

More specific numbers on Black-owned breweries’ sales and impact will be released in late May, but Asato gave a preview of what to expect from that report, including that Black-owned craft breweries are consistently outperforming both the overall craft segment and total beer.

“What is the secret sauce that these individuals hold?” Asato asked. “Very simple: It’s their authentic self. It’s the culture. It is very simple that in the beer industry, what these individuals are doing, and the association that we’re trying to bring together, we are bringing culture to the cup, and it’s exactly the same recipe that actually had craft beer grow before.

“When you think about how craft beer grew, it was an iconic piece of community property,” he continued. “Craft beer was that local place within a community that people would come to, and that people would have a desire to congregate together, share a pint, talk about life, talk about what’s going on in the community. Craft beer exploded with that, because it had a community that supported it.”

That “authentic” connection to community is happening now with Black-owned businesses. Yet they are still an incredibly small portion of the overall craft pie.

Of the 9,683 craft breweries that operated in the U.S. in 2023, only 85 breweries were Black-owned – less than 1%, Asato said.

“There are 13% Black Americans in the United States,” Asato said. “There are 8% of the [Americans] who drink that are Black. How do we get away and allow this industry that we love to only have less than 1% of Black ownership in these breweries? How do we let that happen?”

There is also a major disparity between Black consumers who drink bev-alc, and Black consumers who drink beer – more than any other demographic group, Asato said. About 88% of Black Americans who drink bev-alc drink spirits, while only 46% of the same population drink beer. That’s equivalent to about 16 million consumers who drink alcohol, but don’t drink beer, according to Asato.

“I can assign a very simple consumption model to this: one beer a day, two times a week, all of a sudden that volume starts to really start to materialize into something significant,” he said. “The craft beer industry, the beer industry as a whole, actually has an avenue of new drinkers that could be introduced into this market, and they are Black.”

NB2A president and Weathered Souls co-founder Marcus Baskerville echoed these remarks and the potential impact Black consumers could have on craft beer if there were more breweries for them to connect with. Baskerville emphasized that supporting Black-owned craft breweries doesn’t just help those individual businesses, it helps all craft breweries, as Black-owned breweries help introduce craft beer to consumers that can then spread their dollars and support across the segment.

“Craft beer isn’t oversaturated at this point, craft beer is oversaturated with white males,” Baskerville said. “There’s a completely whole different demographic that we have not even been able to hit yet.”

Black-owned breweries cannot do it on their own and need the support of fellow industry members, NB2A first VP and Brooklyn Brewery brewmaster Garrett Oliver said.

“America propagates this toxic idea that there is such thing as a self-made man,” Oliver said. “This is always a lie.

“If you’re a self-made man, or a self-made woman, is that even a thing to aspire to?” he continued. “I’m gonna say that it isn’t, because if you’re self-made, you show up alone. Alone. By yourself. Is this really what beer is about? Is this what we want it to be? No.”