Craft sure ain't what it was just a year ago. Over course of 2016, most top craft brewers slowed. Up to half of 36 brewers over 100K bbls declined. Craft shipments grew another 6.9%, 1.55 mil bbls to 23.9 mil bbls last yr, we estimate. That's a little less than half craft's trend in 2015, over a mil bbls smaller volume growth. Many brewers didn't meet their goals and many expect difficulties to continue, perhaps get tuffer in 2017. This is a huge change from the go-go years of 2010-2015.

Yet craft remains a bright spot in total US beer industry, if not as bright as it used to be. Total domestic taxpaid shipments declined by about 0.8% in 2016, Beer Institute reported yesterday. Strong import growth will likely lift total US volume into positive territory barely, up less than 1% for a 3d year in a row, less than 0.5% for 2d yr in a row. So craft gained solid share of the US beer biz again. Just less: craft up 0.7 share of total US beer volume to 11, our early estimates suggest.

Look down at bottom of table below. Small brewers shipping less than 100K bbls last yr, over 5,000 of 'em by Brewers Assn count, collectively grew by almost 14%, we estimate. That's much slower than 25% growth for this group in 2015. But pretty great compared to 2% growth put up by Top 36 (over 100K bbls) combined. These smaller brewers ("Others") gained another 2.7 share of craft volume to 45.2. Since 2011, they contributed about 2/3 of total craft volume growth. But last yr, this massive, diverse and ever-changing group gained over 1.3 mil bbls. That's 85% of craft's overall growth. Every year they inch closer to 50 share of craft as hundreds more open across the US. Amidst continued consolidation, the segment fragments further. 

	Shipments Bbls - 000		Change		Craft Share		Bbls	Change 2011-16
	2016	2015	bbls	%	2016	2015	2011	bbls	%
Boston*	2,300	2,510	-210	-8.4	9.6	11.2	2,096	204	9.7
Sierra Nevada	1,137	1,221	-84	-6.9	4.8	5.5	858	279	32.5
New Belgium	958	914	44	4.8	4.0	4.1	713	245	34.4
Lagunitas	918	789	129	16.3	3.8	3.5	161	757	470.2
Craft Brew Alliance*	760	788	-28	-3.6	3.2	3.5	623	137	22.0
Goose Island*	605	485	120	24.7	2.5	2.2	150	455	303.3
Spoetzl (Shiner)	550	605	-55	-9.1	2.3	2.7	487	63	12.9
Bell's	422	371	51	13.7	1.8	1.7	180	242	134.4
Ballast Point*	375	277	98	35.4	1.6	1.2	29	346	1193.1
Deschutes	372	344	28	8.1	1.6	1.5	223	149	66.8
Firestone Walker	354	272	82	30.1	1.5	1.2	100	254	254.0
Founders	348	270	78	28.9	1.5	1.2	41	307	748.8
Stone	346	326	20	6.1	1.4	1.5	149	197	132.2
Brooklyn	282	277	5	1.8	1.2	1.2	140	142	101.4
Dogfish Head	237	237	0	0.0	1.0	1.1	144	93	64.6
SweetWater	227	219	8	3.7	0.9	1.0	95	132	138.9
New Glarus	214	195	19	9.7	0.9	0.9	109	105	96.3
Matt	204	222	-18	-8.1	0.9	1.0	196	8	4.1
Oskar Blues	201	192	9	4.7	0.8	0.9	59	142	240.7
Harpoon	198	204	-6	-2.9	0.8	0.9	173	25	14.5
Boulevard	196	196	0	0.0	0.8	0.9	157	39	24.8
Abita	155	170	-15	-8.8	0.6	0.8	125	30	24.0
Alaskan	154	160	-6	-3.8	0.6	0.7	130	24	18.5
Anchor*	145	155	-10	-6.5	0.6	0.7	103	42	40.8
Great Lakes	140	147	-7	-4.8	0.6	0.7	109	31	28.4
Victory	139	142	-3	-2.1	0.6	0.6	69	70	101.4
Schell*	135	136	-1	-0.7	0.6	0.6	130	5	3.8
Summit	128	129	-1	-1.0	0.5	0.6	104	24	22.8
Odell	121	110	11	10.0	0.5	0.5	58	63	108.6
Long Trail*	121	141	-20	-14.2	0.5	0.6	120	1	0.8
Full Sail*	115	115	0	0.0	0.5	0.5	105	10	9.5
Shipyard*	109	119	-10	-8.4	0.5	0.5	129	-20	-15.5
Rogue	106	106	0	0.0	0.4	0.5	92	14	15.2
21st Amendment	105	103	2	2.0	0.4	0.5	25	80	320.2
Flying Dog	101	97	4	4.1	0.4	0.4	72	29	40.3
Ninkasi	100	101	-1	-1.0	0.4	0.5	56	44	78.6
Top 36	13,078	12,845	223	1.8	54.7	57.5	8,310	4,768	57.4
Others	10,822	9,505	1,317	13.9	45.3	42.5	4,090	6,732	164.6
Total*	23,900	22,350	1,550	6.9			12,400	9,950	80.2

*CBN estimate. All other figures based on data provided by individual brewers.

Note: Table above shows mostly self-reported 2016 shipments totals for craft brewers over 100K bbls. Shipments in italics are estimates based on self-reported trends. CBN estimated totals for public companies, plus those we did not hear from by presstime. All numbers subject to revision.

Top 2 Down 8% Together; Strategic Strength; Trends All Over Map, -9% to +35% In this intensely competitive environment, top 2 craft brewers collectively dropped about 290K bbls, 8% we estimate. That's never happened before. Boston Beer's craft beer biz down at least 8% last yr. Boston's beer trend difficult to peg, as it doesn't break that out and also sells cider, tea etc. But top Sam Adams brands down mid-teens in IRI off-premise; total Sam portfolio -9% in Nielsen off-premise scans. Sierra Nevada shipments -7% last yr (as CBN reported). So Boston now under 10 share of craft, Sierra under 5. They had 20.7 share and 7.8 share, respectively, 10 yrs ago. Think of it: Top 2 craft brewers dropped from 28.5 share to 15 share of craft segment in a decade. New Belgium finished up 5% in 2016, just below segment growth.

Lagunitas put up largest bbl-gain in craft +129K bbls, 16%. CBA down a few points last yr, we estimate. So no change in top 5 rankings. Still movin' up: largest AB-owned craft brand, Goose Island now #6. It was only other top-36 brewer to gain over 100K bbls and put up one of fastest trends of the bunch last yr. In fact, its estimated 25% gain was 1 of just 4 trends over 20%. In 2015, 9 of Top 36 grew more than 20%; 12 in 2014. (See below for more on AB High End brands.) Spoetzl (Shiner) shipments down 9%, the co told us.

But much more general health in next bunch on list. Bell's up 14%, more like smaller players. Ballast Point +35% to about 375K bbls, fastest trend in Top 36. But it more than doubled in 2015. Deschutes also beat the category by a hair, gained share. Firestone Walker still strong, put up only other trend over +30%. Founders tracked closely right behind. Ballast, Firestone and Founders all flew past 300K bbls and all passed Stone, +6%. Note that many of fastest growers here at least party owned by larger brewing outfits, with Heineken, AB and Constellation all represented in craft's top 10.

Stuck in the Middle? Most Craft Brewers 125-250K in US Flat or Down; No Brewer's Land Big dropoff in total volume of brewers below Stone. Many brewers below 250K bbls declined. Of 16 brewers who sold 125-250K bbls in US last yr, 13 flat or down. That's where a lot of brewers seemed stuck in the middle last yr. Only Brooklyn totaled between 250-350K bbls. But only about half its volume in US, and that too declined slightly. So there's's now this "no brewer's land" roughly between 250K-350K bbls. If you look at Oskar Blues (+5%) within total Oskar Blues Holdings group (with Cigar City, Perrin, Squatters/Wasatch), it transcends this gap and moves into group of larger players. But no other portfolio play does. So how many below this line at about 250K bbls will break thru?

Just a handful of standouts on rest of the list. New Glarus slowed too but grew ahead of the category, a rock-solid +10% all in one state. Odell also up 10%. Both SweetWater and only new brewer on this list, Flying Dog, up about 4%. 21st Amendment up about 2%, co shared while noting relatively large split with depletions trend, +8%. Dogfish Head, Boulevard and Rogue all reported flat years to CBN. Summit and Ninkasi each down about 1%. Alaskan and Great Lakes both down a little for second yr in a row. Matt and Abita reported 8-9% declines after modest gains in 2015. So did Southern Tier, which put it back below 100K bbls. It's portfolio-mate, Victory, also down in 2016, -2%.

Five-Yr Change: Craft +10 Mil Bbls; No One Close to Lagunitas; Boston +10% in 5 Yrs Craft still wildly bigger and more varied than it was even 5 yrs ago. Segment grew by about 80%, near 10 mil bbls since 2011. Lagunitas added more bbls in last 5 yrs than anyone. No one really even came close. It grew by over 750K bbls and finished 2016 almost 6X its size in 2011. Second biggest 5-yr bbl-gainer is Goose: AB quadrupled biz it bought in 2011. But Ballast Point had by far best 5-yr trend. Last yr it shipped almost 13X what it did 5 yrs ago. Founders expanded by about 8.5X. All those brewers added over 300K bbls between 2011-2016. The 4 collectively gained 1.865 mil bbls. Sierra and New Belgium both up about 30% in that time. Firestone Walker added more bbls than NBB and 3.5X its own size back in 2011. Bell's more than doubled in that time. One final sign of changing times: all 8 of those cos added more bbls to craft growth in last 5 yrs than Boston Beer, still by far the largest craft brewer, over a mil bbls bigger, twice the size of #2. And no doubt, this will all change further in another 12 months.

Steady stream of new breweries hasn't let up much. The segment fragments further as more consumers are faced with even more local options. Since start of 2017, we've come across lots of stories of new brewing bizzes. Here's a selection of 'em. Note some common themes: finding communities with no or few existing breweries; focus on "approachable" styles; non-beer bizzes expanding into brewing.

All of those above trends showed up in handful of clips from area around Cincinnati, OH (where, recall, New Riff Distilling closing Ei8ht Ball Brewing operation, to be opened under different name, see issue #6). Not far away, Grainworks Brewing will open a 5K sq-ft brewery on a 10-bbl system, choosing beers that are more "middle of the road to begin with, just because we know this area is in transition now," founder Steven Brock told the Journal-News. A little further north, near Indiana border, Kennedy Vineyards will open Big Rack Brewery on site, per Early Bird Paper (note same story from other wineries: War Horse Brewing opened last year within Three Brothers Winery in NY, per recent Democrat & Chronicle profile). But non-alc bev bizzes also adding breweries too: on opposite side of OH, Biker BrewHouse recently opened with 2.5-bbl system in back corner of Harley-Davidson Bike Town dealership outside Akron, Akron Beacon-Journal wrote. We also read about entrepreneurs planning to focus on "approachable" styles just outside of brewery-dense Twin Cities, Minnesota and others moving forward with plans to bring local beer to new communities in Augusta, GA and Elizabeth City, NC.

What of brewery-rich California? Folks still somehow find whitespace there. LA Times just featured 3 in Burbank, including Simmzy's, existing "chain of five craft-focused pubs" that's adding a 7-bbl brewery to its Burbank location. It'll supply house beers to other locations (moving away from contracting with Golden Road, Firestone Walker, per paper) and make "super food-friendly beers." Just-opened Verdugo West Brewing also related to existing on-premise retailers, while Lincoln Beer Co started making beer last fall, still waits on a taproom, but hopes to "bring more balance back to a beer culture that's gone hop crazy," Times wrote. Plans for more beer bizzes up in Fresno too, the Fresno Bee wrote in longer look at expanding craft scene there. Existing small breweries keep growing (like Dust Bowl's new facility and busy restaurant), but paper notes definitive plans for new ones and rumors of many more eyeing downtown. That includes Border Hop Brewing, part of broader development project to include apartments and restaurants, and a gastropub project from one nearby restaurant and local House of Pendragon Brewing. Speaking of dragons, Dragon's Tale Brewery just celebrated grand opening as 1st brewery in Montclair (couple communities over from Azusa), per Inland Valley Daily Bulletin. Meanwhile, lots of existing breweries in Calif (and elsewhere) look to open new taprooms, like Fieldwork's coming 4th and 5th taprooms and Brew Rebellion's new nano location in Banning.

How 'bout developers looking to breweries to help revitalize vacant malls? See Saw Works Brewing in TN, which could open taproom at re-developed mall, that'll include residential oppys too, WBIR reported. And that mall project outside Buffalo (see vol 7, #107 from last Dec) now has brewery name and investment amount: Big Thunder Brewing could spend $3.3 mil to build out brewpub (and potential teaching brewery for local community college) with 20-bbl brewhouse there, per Buffalo News. What of a potential 15 new breweries in tiny Livingston county in upstate NY? That's how many fledgling companies currently compete in "Brew in Livingston" contest, according to Democrat & Chronicle. County economic development board promised $185K in grant money from Finger Lakes Regional Econ Dev Council to set of winners, with area officials seeing possibility for area to go from 2 to a dozen or more breweries in short order. Wow.