BOULDER — As 2025 turns to 2026, the state of the local craft beer industry might bring to mind a line from Prince’s 1982 hit “1999”: “Parties weren’t meant to last.”
For many brewers, the keg-tapping bullish vibes that characterized much of the sector’s past couple of decades of growth have begun over the past few years to morph into the bearish drag of picking up empties and nursing the hangover that is industry contraction.
“Barring a drastic change in the last few weeks of the year, 2025 will be the second consecutive year in which brewery closings outpace brewery openings,” according to the recently released “Year in Beer 2025” report from the Boulder-based craft beer trade group Brewers Association.
Recent closures include Sanitas Brewing Co., which closed its Boulder brewery and taprooms in Lafayette and Englewood Dec. 20, and Loveland’s Big Beaver Brewing Co., which closed in November.
As of its midyear survey, BA estimated that craft production was down 5%, a steeper decline than the 4% drop in volume the industry experienced in 2024.
“While full 2025 production numbers will not be finalized until the Beer Industry Production Survey in Q1 2026, scan data for Q3 2025 suggests a continued weakening in the back half of 2025,” according to the Year in Beer report. “As such, we may expect contraction slightly beyond that midyear figure for the full year of 2025.”
The association has tallied 9,778 breweries in operation, along with 268 new brewery openings and 434 closings in 2025.
“What made the delta bigger between opening rate and closing rate was the significant decline in the rate of brewery openings,” said Matt Gacioch, staff economist for the Brewers Association. “They’re just there just aren’t nearly as many breweries that are kind of rising to fill you know that space in the market” created by the closures, which are occurring only slightly more frequently than in past years.
“There was a time in the mid-2010s where brewery openings were like 10x the number of breweries closing,” he said.
So has this equation become so out of whack? ”Like any business problem it’s a complex series of factors,” Gacioch said.
One factor: “With the rising cost of money (as a result of higher interest rates and more-tight-fisted investors), it’s made it tougher in a capital intensive industry to get a new business off the ground.”
Beyond shifts in the broader financial atmosphere, the folks who control the purse strings could be more hesitant to fund new brewing ventures, Gacioch said, because “we might have reached the level of saturation in the market right now where lenders are just less likely to take at face value that a craft beer business is going to be automatically successful.”
Despite the maturity of the Boulder Valley and Northern Colorado craft scene relative to many other parts of the country, Gacioch said there is still room for new players.
“When we’re talking about tap rooms and brew pubs in particular, saturation can really come down to very localized geography and the demographics and the demand of a particular neighborhood,” he said. “Are there parts of the Front Range that have reached market saturation in terms of what consumers are willing to pay for? I think, ‘absolutely.’ Are there no opportunities to find a niche within the Front Range? I don’t think that’s the case, either.”
Gacioch added: “We’ve been lucky here on the Front Range to have access to some of the best and most-innovative and earliest moving craft brewers anywhere in the country and world. And part of that means that there’s been a lot of time for the craft beer scene to develop and meet consumer demand. But if there’s not new demand coming in from new consumers or consumers frequenting (breweries and taprooms) more often, then that is a sign of a market that is going to be tougher to enter.”
Part of the challenge brewers face in attracting new demand is the fact that younger consumers tend to go out less, and when they do, they’re often not drinking craft beer.
Steve Conrad, head brewer at Busey Brews Smokehouse and Brewery in Nederland, noted at BizWest’s Brewers CEO Roundtable in October that “the younger generation doesn’t seem to be engaging in the craft-beer world as much as people my age that are on the way out.”
Jeffrey Green, co-owner of Very Nice Brewing Co., which lost its Nederland brewery to a fire on Oct. 8 but still has one in Gilpin County, built upon that theme during the roundtable discussion.
“The general going-out culture has been set back,” he said. “I know a lot of people say young people aren’t drinking, but I think it’s a bigger problem. People have stopped going out in general. My wife owns half the brewery, and she doesn’t drink either.”
That shift has been very real for Davin Helden, owner of Liquid Mechanics Brewing Co. in Lafayette.
“The generation that helped craft beer get cool are boomers now,” he said at the October event. “We’re getting older, and our doctors are saying, ‘Hey, don’t drink four IPAs a day. Maybe like one or two.’ We’re seeing people that are in that age demographic still coming in, but it’s one or two beers instead of three or four. And it’s twice a week instead of three or four times a week. Those are the regulars. And then the younger kids, the 21 to 35, grew up differently. When I grew up, if you wanted to have fun, you found other kids, and eventually that turned into also drinking beer.”
But trends tend to be cyclical.
“At some point, it’ll be like a flip,” Helden said. “The younger kids will say, ‘Hey, maybe what my parents were doing was cool, being out in person, sitting around a campfire with a keg.”
The craft-beer industry, which BA estimates supports 443,000 jobs nationwide and contributes $72.5 billion to the United State’s economy, isn’t just shrinking in terms of volume and number of breweries in operation, it’s consolidating through mergers and acquisitions. Local players have been active in the M&A game.
While an increase in mergers and acquisitions can sometimes be a result of investors taking advantage of weaker players in a softening industry, that may not necessarily be the case with the consolidating local craft scene.
“The kind of strategic consolidation that’s happening in Colorado is another example of sort of a new version of innovation within the craft space,” Gacioch said. “Craft brewers have always been innovators. A lot of times that’s meant evolving from a stout to an imperial stout to a peanut butter stout to a s’mores stout — innovations on the product side. What you’re seeing now — not just in Colorado, but this is particularly prevalent here — are innovations trying to make new business models work.”
Wilding Brands, a Lafayette-headquartered umbrella company that has made several splashy acquisitions in the beverage space since its formation last year, absorbed Boulder’s Upslope Brewing Co. in October.
Formed last year in a merger between Stem Ciders, Denver Beer Co. and Funkwerks, Wilding Brands is led by Colorado craft-beverage veterans Eric Foster, Brad Lincoln and Charlie Berger, who began his career on the bottling line at Great Divide Brewing Co. before founding Denver Beer Co.
Wilding bought Great Divide in April and Denver’s Station 26 Brewing Co. about two months later.
With the Upslope acquisition, Wilding says it now expects to brew 80,000 barrels across its portfolio, which the company claims will make it Colorado’s second-largest independent craft producer.
Longmont-based craft brewing stalwart Left Hand Brewing Co. acquired Dry Dock Brewing Co. this spring, and now produces the Aurora-born brand’s apricot-forward line of beers at Left Hand’s Boulder County brewery.
Eric Wallace, Left Hand’s co-founder and CEO, told BizWest in April that Left Hand parent company Indian Peaks Brewing Co. will continue to seek out new partnerships in the form of both contract-brewing deals and acquisitions.
Left Hand Brewing Co. is located along Boston Avenue in Longmont. The Longmont-based craft brewer acquired Dry Dock Brewing Co. in 2025. (Courtesy Left Hand Brewing Co.)“We’re creative, and we’re flexible, if nothing else,” he said at the time, but “operating conditions just continue to get harder” for independent breweries that are hesitant to align with out-of-state (or even out-of-country) mega-conglomerates.
“By combining production facilities for Dry Dock and Left Hand, you can maximize capacity and some of those fixed costs you’re not paying for twice at two different facilities,” Gacioch said. “At Wilding, you also have those production efficiencies, but they’re also really focused on having the office and administrative work consolidated.”
Business combinations are “a sign that people aren’t giving up,” he added. “This is an industry that is saying, ‘Yeah, things are hard. The environment has changed. Consumers have changed. What wholesalers and retailers are doing has changed. But we have agency over what we have control over, and so we’re going to try to get creative in solving for the problems that exist today.’”
Craft brewers are likely not alone among adult beverage-makers in feeling a bit uneasy heading into the new year.
“In 2025, it’s been contraction across the board,” Gacioch said. “That’s for craft beer, for beer overall (including macro-brewers). Certainly wine has had a really tough couple years. Interestingly spirits have even been in decline this year. For a number of years, spirits were kind of the poster child for growth.”
So what could 2026 have in store for the craft scene?
First the bad news: According to the BA report, “many of the headwinds currently facing the industry aren’t expected to disappear in 2026.”
However “there may be reason for cautious optimism in some areas. With interest rates expected to continue declining, the opportunity for measured expansion will become more viable,” the report said. “The Supreme Court may issue guidance shortly on the legality of certain tariffs, potentially reducing some of the ambiguity in procurement planning. Some consumer research also indicates that consumers are expecting to socialize more in the year ahead — always a good sign for craft beer.”
Gacioch is taking a frosty-mug-half-full approach towards looking ahead to the new year.
“Maybe it’s just the optimist in me, but beer is a beverage that has been around since the dawn of civilization,” he said. “ I feel like beer will find a way forward through this. It’ll always be some kind of a roller coaster, but it’s the business owners who get creative about finding ways to succeed in today’s environment that’ll be around into the future.”
This article was first published by BizWest, an independent news organization, and is published under a license agreement. © 2025 BizWest Media LLC.
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