Craft Beer Fell 4 Percent. Microbreweries Fell 9 Percent. The Difference Is the Business Model.

Market Report & Outlook · Breweries, Brewpubs and Taprooms

U.S. Microbrewery Market Report and Outlook, 2026 to 2031: size and structure, demand, unit economics, regulation and tax, SBA and USDA financing, and how we underwrite a brewery in a shrinking category.

By Michal Mohelsky, J.D., FMVA, Practicing Affiliate of the Appraisal Institute · Published November 7, 2026 · Updated November 7, 2026 · 34 minute read

U.S. craft beer is a mature category in its third year of contraction, and the contraction is not evenly distributed. The Brewers Association's revised count puts 2025 craft production at 22,034,000 barrels, down 4 percent, worth $28.0 billion at retail; the first half of 2026 ran down another 4 percent, and the number of operating breweries fell to 9,344 by June (1)(3). Closings have outnumbered openings for two years running, 591 against 518 in 2024 and 481 against 300 in 2025. Underneath the headline, brewpubs lost 1.7 percent of volume in 2025, taprooms 3.9 percent, and the distribution-dependent microbrewery 8.9 percent. The segment with the word "microbrewery" in its name is the one that is failing.

Demand is settling at a lower level rather than recovering. Gallup finds 54 percent of American adults drink, a record low held for a second year, and among adults under 35 liquor (38 percent) now edges beer (36 percent) as the drink of choice (8). What is growing sits next to beer, not inside it: non-alcoholic beer at roughly 22 percent dollar growth, and hemp-THC drinks at about $1.1 billion in 2025, a line that faces federal redefinition on December 11, 2026 unless Congress attaches a framework to the next funding bill (12)(13).

The economics point one way. Brewers Association benchmarking puts taproom beer at $1,276 a barrel against $602 for distributed beer; direct labor has risen from $85.60 to $121.10 a barrel since 2018; and the Midwest aluminum premium, about 20 cents a pound in 2024, stood at 106 to 108 cents in October 2026 under a 50 percent Section 232 tariff that the April 2026 restructuring left in place for sheet and cans (15)(17)(18). At 2025 auctions, complete brewhouses cleared at $4,000 to $47,500, which is what the equipment is worth as collateral regardless of the invoice (20).

The financing doors have not closed, but they are narrowing. SBA 7(a) and 504 have required 100 percent U.S. citizen or national ownership since March 1, 2026. USDA B&I still admits lawful permanent residents, carries FY2026 fees of 3.0 percent upfront and 0.55 percent a year, and stops taking new applications at 5 p.m. ET on November 20, 2026 for a portal migration, with FY2027 funding unresolved: the President requested $0 and the House passed $2.0 billion (26)(27)(29). Prime is 7.00 percent. Written for lenders, SBA and USDA credit officers, brewery owners and investors evaluating a new build, an acquisition or a workout. 34 minute read.

The craft beer correction is real, it is not over, and it is not evenly distributed: the taproom is holding, the wholesale microbrewery is not, and every number in a brewery feasibility study should be read with that split in mind.

By Michal Mohelsky, J.D., FMVA. MMCG Invest, LLC. Published November 7, 2026. Current as of November 7, 2026.

The claim we hear most often this autumn, from borrowers, from brokers and from a few lenders who should know better, is that craft beer has bottomed out. The evidence offered is usually the same: the Brewers Association's midyear survey found 54 percent of breweries growing in the first half of 2026, up from 49 percent a year earlier, and the association's president told a room of brewers in April that it "feels like we're coming out the other side" (3)(33).

The conclusion is partly defensible. The reason is not. The rate of decline has moderated, from a 5.7 percent drop in total beer in 2025 to something closer to 5 percent this year, and the craft number has held near minus 4 percent for eighteen months. That is a slower fall, not a floor. The share of breweries reporting growth rises mechanically when the ones that were shrinking close, and the association's own economist said so in the same report, cautioning that the sample "likely leans positive" (3). No Brewers Association document we have read uses the phrase "bottoming out." The words it uses are "correction," "contraction may be moderating," and, in July, that it is "too soon to say whether craft has reached the bottom of the valley" (1)(3). Those are different sentences, and a credit memo should quote the one that was actually written.

The better question is not whether the category has stopped falling. It is which part of it was ever going to carry debt. In 2025, craft breweries that sell most of their beer across their own bar lost between 1.7 and 3.9 percent of volume; the breweries that sell most of it to wholesalers lost 8.9 percent (1). Those are not two readings of one trend. They are two businesses that happen to share a brewhouse, and the gap between them is the whole thesis of this report.

What follows is our market report and outlook for U.S. microbreweries, brewpubs and taprooms through 2031, written for the people who have to sign the credit memo. We cover the size and structure of the market as revised in May 2026; the demand base and the substitutes eating into it; the unit economics that make a taproom barrel worth twice a wholesale barrel; the regulatory and tax picture, where the tax is stable and the costs are not; SBA and USDA financing as the rules stand this week; the consolidation and distressed-asset market that has become the industry's exit; and the way we size a brewery loan when the category is shrinking. Every figure is dated. Where a number has been revised, we give the revision and say so. Where a number comes from a vendor, we say that too.

The revision that mattered. On April 14, 2026 the Brewers Association reported that craft production fell 5.1 percent in 2025, to about 21.86 million barrels. On May 29, after the TTB's Beer Industry Production Survey data arrived, it revised the figure to 22,034,000 barrels, a 4 percent decline (1). The revision also moved the retail value from $27.8 billion to $28.0 billion (minus 2.8 percent rather than minus 3.6), the volume share from 13.3 to 13.4 percent, direct employment from 189,000 to 191,000, and the regional-brewery decline from minus 5.9 to minus 4.1 percent. Both sets of numbers are still in circulation. The April figures appear in most of the trade coverage, in several lender decks we have seen, and on the association's own economic-impact page, which had not caught up as of May 20. Use the May figures. The 2024 baseline, for context, was 23.1 million barrels and $28.8 billion (4).

Share is not growth. Craft's volume share rose from 13.2 to 13.4 percent, and its dollar share from 24.6 to 24.8 percent of a $113 billion beer market, in a year when craft volume fell 4 percent (1)(2). The arithmetic is unflattering: share rose because total beer fell faster. The Beer Institute's restated 2025 taxable removals, which count domestic shipments only, were 138,342,512 barrels, down 6.4 percent; the association's broader measure of production plus imports was down 5.7 percent (7)(1). Through September 2026 removals were down a further 5.0 percent, to 102,961,227 barrels, and the first-half craft estimate of minus 4 percent sat almost exactly on the first-half removals figure of minus 4.5 percent (3)(7). Scan data are worse than either: NIQ had BA-defined craft at minus 5.2 percent off-premise in the first half, and Circana's 2025 full-year read on craft in measured retail was $4.4 billion, down 4.3 percent in dollars and 5.8 percent in cases (3)(36). The association's explanation is the right one: when the channels scan does not see, draught and on-site, outperform the channels it does, the category estimate beats the scan. Packaged craft in a grocery aisle is falling five to six percent a year. The taproom is the reason the headline says four.

Closings outrun openings. The sequence is short and should be memorized. In 2023, 495 breweries opened and 418 closed, a net gain of 77. In 2024, 518 opened and 591 closed, the first net loss since 2005. In 2025, 300 opened and 481 closed, a net loss of 181 (1)(4). Set against 9,578 operating craft breweries at year-end, the 2025 closings work out to a 5.0 percent annual closure rate. That rate has been fairly steady; what collapsed is the opening rate, which the association's economist described in July as having "fallen off of a cliff" (34). By June 2026 the operating count had slipped to 9,344, down 1.8 percent from 9,515 a year earlier, with regionals and microbreweries each down 3 percent, taprooms 2 percent and brewpubs 1 percent (3). A lender who assumes a 5 percent annual mortality in the trade area, and a thinner pipeline of new entrants to replace it, is not being pessimistic. That is the last three years.

Four models, four outcomes. The association sorts craft into four business models, and the 2025 results separate them cleanly. Brewpubs, 3,525 of them, lost 1.7 percent of volume. Taprooms, 3,784, lost 3.9 percent. Regional breweries, 275, lost 4.1 percent. Microbreweries, meaning breweries under 15,000 barrels that sell 75 percent or more of their beer off-site, 1,994 of them, lost 8.9 percent (1). Taprooms and brewpubs together are 73 percent of craft businesses and about 15 percent of craft volume (2). The reader can draw the map from that: most of the barrels sit in a few hundred regional and distributing breweries, most of the businesses sit in a few thousand bars that happen to brew, and the second group is the one the data say is surviving. One caution on the counts. The association states its percentage changes on a "comparable basis," and they do not reconcile with its own count table: microbreweries went from 2,029 to 1,994, which is minus 1.7 percent, yet the published change is minus 4.4 percent. We cite the association's stated percentages and footnote the method, and we would advise the same in a study.

Two sizes of the same market. Anyone who reads industry reports has met the discrepancy. IBISWorld sizes "Craft Beer Production in the US" at $7.4 billion for 2026 and "Breweries in the US" at $35.8 billion; the Brewers Association says craft is $28.0 billion (1)(34). They are not in conflict. IBISWorld measures producer revenue at the brewery gate, and its craft definition includes Boston Beer and Yuengling; the association measures retail value, what the consumer paid. A $28 billion retail figure sitting over a $7.4 billion producer figure is roughly the markup of three tiers plus a bar. The mistake we see is a model that takes a market-size number from one and a growth rate from the other. IBISWorld's forecast of 1.6 percent nominal annual growth for craft and 1.3 percent for all breweries, to $38.3 billion in 2031, is a price-led projection and should be treated as the ceiling of a base case, not the base case itself (34).

Where the map still has room. Only one Census division grew craft volume in 2025: East North Central, meaning Illinois, Indiana, Michigan, Ohio and Wisconsin, at plus 0.4 percent. Mountain was next at minus 1.5 percent. Everyone else did worse than the national minus 4 (1). Density explains part of it. Vermont has 14.6 craft breweries per 100,000 adults aged 21 and over, Maine 14.2, Montana 12.2, Colorado 9.4 and Oregon 9.0; Mississippi has 1.0, Alabama 1.3, Texas 1.9, Florida 2.1 and Georgia 2.3 (5). The national figure is about 3.7, which is 9,578 breweries over roughly 256 million adults of drinking age. California still leads on count (939), production (3.45 million barrels) and economic output ($8.3 billion), and Pennsylvania, New York, Washington, Colorado and Texas follow on count (5). In a feasibility study we treat anything above nine per 100,000 in the trade area as high-saturation and say so, and we have found that the large, under-dense states, Texas, Florida, Georgia and Arizona, have more room for a well-located taproom than any Vermont county does. Dense is not the same as strong. Dense is where the next closure is.

The pool. Gallup has asked Americans whether they drink since 1939. In July 2026, 54 percent said yes, unchanged from 2025 and the lowest reading in the series; it was 67 percent in 2022, 62 in 2023 and 58 in 2024 (8). The decline is steepest where the future customers are. Among adults 18 to 34, the share who drink fell from 58 percent in 2023 to 50 percent in 2026, and in that cohort liquor (38 percent) is now preferred to beer (36 percent), a reversal that would have been unthinkable a decade ago. Across all drinkers beer still leads, 36 percent to liquor's 32 and wine's 30, but beer has given up seven points since 2016 and was 47 percent in 1992. Half the country, 51 percent, now says that moderate drinking is bad for one's health, up from 28 percent in 2018, and only 6 percent say it is good (8). Gallup's subgroup margins are wide and the year-on-year moves are not statistically significant. The direction is.

The engagement. Inside that smaller pool, the craft drinker is more committed than at any point since before the pandemic. The association's 2026 consumer survey with the Harris Poll found 85 percent of craft drinkers drinking craft at least monthly, up ten points; 28 percent drinking more craft than a year ago against 27 percent drinking less, which ends a four-year slide; and an average of 5.5 brewery visits in the past year, up from 5.1 (9). Strip out the "power visitors" and the average is 3.5, still up from 2.4 in 2018 (10). Fifty-eight percent say they bought more of a brewery's beer after visiting its taproom. The association's economist multiplied the adult population by the craft-drinker share and visits per drinker and concluded that 2026 "is, in fact, poised to become the year with the most brewery visits in recent history," and then, in the same note, warned of "declining ticket sizes" (10). Both halves matter to a lender. Traffic to the taproom is real and rising. Revenue per visit is not, and in the general population monthly craft consumption fell from 30 to 28 percent (9). This is an occasions business now, not a reach business, and the demand model in a feasibility study should be built on visits and checks, not on a share of a regional barrel count.

Non-alcoholic beer. It is the one beer segment growing at double digits, and craft over-indexes in it. Circana put non-alcoholic beer at $632.4 million in measured retail for the 52 weeks to April 19, 2026, up 22.0 percent in dollars, in a total beer market of $44.9 billion that fell 1.9 percent (36). By the association's reading of NIQ all-channel data, non-alcoholic beer reached 2.5 percent of beer volume in 2025, from 1.1 percent in 2021, and craft brewers held 31 percent of that volume and 36 percent of the dollars, against about 13 percent of beer overall (11). NIQ's broader series, all non-alcoholic beer, wine and spirits, crossed $1 billion and grew 14.6 percent in the year to June 27, 2026, slower than the 22 percent Circana shows for beer alone; the scopes differ, and we read the pair as growth drifting down from the 30 percent rates of 2023 and 2024 toward the high teens. Two things keep it from being a growth engine for a small brewery. The first is scale: 2.5 percent of beer volume cannot offset a 4 percent annual decline on a 22 million barrel base. The second is competition: the multinationals are spending on the category, the association expects craft's share of it to slip, and in the 2025 survey 14 percent of regular craft drinkers said they drink less craft because they drink more non-alcoholic beer (11). Treat it as a required line on the menu and a modest contributor to the check. Hoplark, a hop-water maker, filed Chapter 7 this year.

Hemp-THC. This is the swing factor, and it swings on a date. Brightfield Group estimates hemp-derived THC drink sales grew from $630 million in 2024 to nearly $1.1 billion in 2025; NIQ counted $239 million in mainstream retail for the 52 weeks to April 4, 2026, up 135 percent (12). For some breweries the line is not ancillary. Bent Paddle in Duluth put it at about 40 percent of revenue; Indeed in Minneapolis at about 15 percent; Lupulin at 30 percent; Hopewell in Chicago at about 30 percent of on-premise sales. The Minnesota Craft Brewers Guild says roughly half of its 150 members operate in hemp, that members booked more than $5 million of THC beverage revenue in 2025, and that its government-relations director "would not be surprised if 20 to 30 percent" of the state's breweries close after the ban (13). The ban is Section 781 of P.L. 119-37, signed November 12, 2025, which excludes from "hemp" any finished product with more than 0.4 milligrams of total THC per container. H.R. 6500, the Continuing Appropriations and Extensions Act, 2027, signed September 2, 2026 as P.L. 119-103, delayed that redefinition for naturally occurring cannabinoids to December 11, 2026; synthetics lose hemp status on November 12 (13)(14). We confirmed the December 11 date in the Congress.gov summary of Section 2019 and in law-firm analyses; it needs no Federal Register notice because it is statutory. Several states are not waiting: Illinois's Hemp Act moves anything above 0.4 milligrams into dispensary-only channels from November 12, Ohio did so on March 20, New Jersey's alcohol-licensee window closes November 13, and California has barred detectable THC in hemp products since 2024 (13)(25). A brewery holding a TTB brewer's notice cannot keep making a federally illegal product beside its bonded operations. Our base case strips THC revenue to zero after December 11 for every target, and allows an upside case only if a framework such as H.R. 10079, the Beverage Regulatory Parity Act, rides the December funding bill. It has had no committee action.

GLP-1 and the rest. Gallup found 11 percent of adults currently taking a GLP-1 for weight loss in mid-2026, up from 3 percent in 2024; FTI's broader measure of any use is about 18 percent (37). The best spending evidence comes from a Heineken document reported by Reuters on October 23, 2026, in which Circana panel data showed households with a GLP-1 user spending about 13.5 percent less on beer after two years. The data are observational and not public, and Carlsberg disputes the causality; EY-Parthenon's survey found 44 percent of users drinking less and 82 percent keeping the habit after stopping (37). FTI's estimate that the drugs trim cumulative U.S. alcohol consumption about 2.5 percent through 2035 is a reasonable number to carry in a sensitivity. The other substitutes are structural rather than cyclical. Daily or near-daily cannabis users outnumbered daily drinkers for the first time in 2022, 17.7 million to 14.7 million. Spirits and wine are shrinking too, 4.9 and 8.2 percent by volume on WSWA's twelve-month read, so beer is fighting for share inside a contracting category rather than losing it to a growing one. Alcohol fell to 0.77 percent of household spending in 2025, $630 a household, the lowest since the Consumer Expenditure Survey began in 1984. The January 7, 2026 Dietary Guidelines dropped the numeric daily limits, which is the only policy tailwind in this section, and it is outweighed by what consumers already believe.

The price of a barrel depends on who pours it. The most useful numbers in craft beer are the ones the Brewers Association collects in its Financial Benchmarking Survey, and the most recent set with published figures is 2023 data, released in October 2024 (15). Beer sold across the brewery's own bar averaged $1,276.14 a barrel across 70 respondents, with a 25th percentile of $1,062.60 and a 75th of $1,500.97. Beer sold to distributors averaged $602.02 across 60 respondents. Total revenue including food and merchandise averaged $1,511.35 a barrel. Two features of those numbers deserve a pause. The first is how little the taproom price has moved: $1,219.12 in 2018 to $1,276.14 in 2023 is 4.7 percent over five years, during which the consumer price index rose about 21 percent. The brewery's bar has not been able to pass inflation through. The second is that the distributed average sits above its own 75th percentile of $548.14, which means a few large respondents pull it up and a typical small brewer should plan on the 25th-to-50th percentile range, roughly $318 to $550 (15). Build the model on percentiles, not averages.

The arithmetic that follows is the one we put in front of borrowers. A thousand barrels sold on-site at the 25th percentile is about $1.06 million of beer revenue; the same thousand barrels sold through a wholesaler is about $600,000 on a good day and closer to $320,000 on a median one. Against that, 2023 cost of goods for a taproom or brewpub averaged $373.60 a barrel, of which brewing materials were $163.93 and food materials $159.70. Direct labor averaged $121.10 a barrel, up from $85.60 in 2018, a 41 percent rise in five years; food labor averaged $184.86 (15). The industry's own count supports the direction: 191,000 direct jobs over 22.0 million barrels is about 8.7 jobs per thousand barrels, and the association says employment held up better than production precisely because hospitality models carry more staff per barrel (1). That is both the strength and the cost of the surviving model. The taproom barrel earns twice what the wholesale barrel earns, and it spends a great deal of the difference on people.

The 2025 survey, in outline. The association's October 20, 2026 "Quick Take" on its 2025 benchmarking data published charts rather than figures, but the direction is clear enough to use: beer's share of taproom revenue slipped, food and other drinks rose, seating fell, and beer sold per seat held up (16). The 2023 data had an average of 201 seats and 4.1 barrels sold on-site per seat. A taproom that sells more beer per seat in a smaller room while food climbs is a taproom turning into a restaurant, and the labor line above says what that costs. Third-party readings fill in the texture. Toast's median restaurant beer price was $6.65 in September 2026, up 2.8 percent on the year. Arryved's taproom tip rate averaged 21.36 percent in 2025. Secret Hopper counted 2.2 guests a tab. None of these is a national average check, which no one publishes, and we say so when we use them.

Aluminum. Cans were 78 percent of packaged craft volume in 2025, up from 69 percent in 2022, and the association's economist thinks the industry is near a steady state where four of five packaged craft beers are canned (17). The can is therefore where tariff policy lands. Section 232 aluminum duties were restored at 25 percent on March 12, 2025, raised to 50 percent on June 4, 2025, and restructured by the April 2, 2026 proclamation, effective April 6 and published as Federal Register Doc. 2026-06960, which applies a flat 50 percent to the full customs value of articles made almost entirely of aluminum, including sheet under HTS 7606 and finished cans under HTS 7612, cuts lids under HTS 8309.90 to 25 percent, and exempts imported beer under HTS 2203 (17). The exemption helps the importer. It does nothing for a brewer in Ohio buying domestic cans, because domestic can sheet is priced off the Midwest Premium, and the Midwest Premium is a tariff-paid price whether or not the metal crossed a border. That premium averaged about 20 cents a pound over LME cash in 2024, reached 68 cents in July 2025, broke a dollar for the first time on January 23, 2026 when Platts assessed it at $1.0095, and stood at 106 to 108 cents on Fastmarkets' October 13, 2026 reading (18). One secondary report has it dipping to about 95 cents in September on talk of a Canadian deal; Hydro's and SMM's readings over the same weeks were 105 to 109, and we go with the better-documented number. Brewers describe the pass-through in plain terms: one saw a can go from 11 to 13 cents in 90 days; Karl Strauss's COO put cost of goods up 40 to 45 percent since 2020; the Can Manufacturers Institute's president said in January that 2026 price increases would exceed 2025's. The association expects most of the tariff to be felt when annual can contracts re-up for 2027. Harbor Aluminum's scenario of a 60-to-80-cent premium if the Canadian tariff is halved is an upside case, and only that.

Steel, buildout and the other inputs. The Associated General Contractors' October 15, 2026 reading of BLS producer prices put inputs to new nonresidential construction up 11.9 percent year over year in September, "the most in four years," after a 7.1 percent rise in July and 8.4 in May (19). Steel mill products ran 15 to 21 percent higher through the first quarter; aluminum mill shapes were up 48.8 percent in May. Bid prices for nonresidential buildings rose only 5.4 percent, which means contractors are absorbing some of it for now. There is no neutral index of brewhouse or fermenter prices; a Chinese fabricator's claim that stainless was "stable" conflicts with the BLS series and we discount it. Hops are a mild headwind rather than a driver: 2025 acreage fell 7 percent to 41,654, production fell 5 percent, and the average price rose to $5.38 a pound from $5.12. Canadian malt and barley remain duty-free under USMCA, which matters because the U.S. imported about $230 million of Canadian malt in 2024. Carbon dioxide is the input that stops production: the association flagged force majeure allocations in the Southeast in August 2026 and in California the previous October, Gasworld projects U.S. nameplate capacity falling through 2026 while demand grows about 2 percent a year, and CO2 recapture equipment has moved from a sustainability line to a hedge. Diesel at the refinery was up 44.2 percent in July. We found no 2025 to 2026 national data on brewery water or sewer surcharges; get the local pretreatment schedule during diligence, because it is where small breweries get surprised.

What a brewery costs to build, and how fast. Nearly every capex figure in circulation comes from an equipment vendor or a lender, and we flag them as such. A 7-barrel brewhouse with fermenters is quoted at $80,000 to $150,000 new; a 10-to-15-barrel production setup at $150,000 to $350,000 plus $60,000 to $140,000 for canning; a 30-barrel three-vessel brewhouse at $250,000 to $700,000 depending on who is quoting; soft costs at 8 to 15 percent of equipment; lead times of 8 to 20 weeks. Used systems sell for a fraction of those figures, which is the subject of Emblem 7. There is no reliable 2025 to 2026 taproom buildout cost per square foot; escalate any pre-2025 quote by 8 to 12 percent and add a metals contingency. One piece of good news is federal: the TTB's median approval time for an original brewery application was 35 days in July 2026, 34 in August and 31 in September, against a service goal of 85 percent within 75 days, and malt-beverage label approvals were taking one to two days (22). The 60-to-150-day estimates still printed on law-firm and startup sites are out of date. Federal permitting is no longer the schedule risk. Local zoning, buildout and state licensing are, and the 12-to-24-month "concept to open" figure that circulates is an unsourced vendor estimate we do not use.

Federal excise tax. The number is $3.50 a barrel on the first 60,000 barrels removed each year by a domestic brewer producing no more than two million, $16 on the next tier to six million, and $18 beyond that, under 26 U.S.C. 5051 (21). Those rates were temporary when the 2017 tax act created them and were made permanent by the Taxpayer Certainty and Disaster Tax Relief Act of 2020 for removals from January 1, 2021. We found no bill in the 119th Congress to raise, cut or index them, no beer excise provision in the July 2025 reconciliation act, and no FET-rate fight on the association's 2025 or 2026 agenda. The worked example is short. A 1,000-barrel taproom owes $3,500; at the general rate it would owe $18,000. A 2,500-barrel brewpub owes $8,750. Two rules trip up credit memos. Reduced rates apply only to beer brewed and removed by the same brewer, so beer received in bond and merely packaged does not qualify, and a controlled group shares one 60,000-barrel allocation; the TTB's own example gives a company with two breweries removing 120,000 barrels the $3.50 rate on 60,000 combined (21). The only live federal tax item is a credit, not a rate: the Brews to Barns Act, H.R. 10877, introduced in October 2026, would credit 8 cents per dry pound of spent grain donated to farms, capped at $35,000 a brewery a year, which for that 2,500-barrel brewpub would retire most of its federal liability (24). It is introduced, not moving, and the midterms produced divided government. Treat it as upside with no probability weight.

TTB. A Brewer's Notice carries no fee and is tied to the premises; the median approval time has been 31 to 35 days since July (22). Label approvals take a day or two. The pending rules are two notices published January 17, 2025: Notice No. 237 on Alcohol Facts statements (per-serving alcohol content, calories, carbohydrates, fat, protein) and Notice No. 238 on major food allergen labeling (23). Comments closed August 15, 2025; the regulatory agenda targets a final rule in March 2027 with a proposed five-year compliance window, and the association asked for a small-producer exemption. If both dates hold, which the association's own counsel doubts, compliance bites around 2032. For a multi-SKU brewery it is a real relabeling and lab-testing expense, deferred. The ingredient-labeling inquiry was withdrawn on March 21, 2025. The Surgeon General's January 2025 advisory recommending a cancer warning on the label requires Congress, since the warning is set by the 1988 statute, and Congress has not moved. The TTB does not approve formulas or labels for anything containing THC; a brewery making THC drinks must keep them outside the bonded premises, under FDA and state law.

Tariffs, in the rulebook rather than the price. The Supreme Court's February 20, 2026 decision in Learning Resources v. Trump held that IEEPA does not authorize tariffs; it did not touch Section 232, which is the statute behind the aluminum and steel duties described in the previous section. The ruling removed IEEPA duties on Canadian malt and barley that had reached 25 to 35 percent on non-USMCA goods; USMCA-qualifying malt was exempt throughout, and European malt and hops have carried 15 percent since July 28, 2025. A 10 percent, later 15 percent, surcharge under Section 122 of the Trade Act followed for 150 days and is itself in litigation. Canada's retaliation is the one that reaches a distributing brewery's top line: Ontario's LCBO pulled about 3,600 U.S. products on March 4, 2025, most provinces followed, Alberta and Saskatchewan restocked in June 2025, and Ontario remains the strictest, with C$79 million of U.S. stock in storage and Ontario craft sales reported up 35 percent. A brewer with Canadian distribution in its 2024 numbers should have none in its 2027 projection.

Hemp, in the rulebook. The previous section gave the revenue exposure. The legal sequence, for the file, is this. The 2018 Farm Bill defined hemp as cannabis with no more than 0.3 percent delta-9 THC by dry weight, which opened the market for hemp-derived delta-9 seltzers sold outside cannabis regulation. Section 781 of P.L. 119-37, enacted November 12, 2025 as part of the FY2026 agriculture appropriation, moves the plant test to total THC including THCA, excludes synthesized cannabinoids, and excludes any finished product with more than 0.4 milligrams of total THC per container, "container" meaning the innermost package (13). The section took effect 365 days after enactment. Section 2019 of P.L. 119-103, signed September 2, 2026 after the Senate passed H.R. 6500 by 90 to 6 and the House by 370 to 48, delays the redefinition for naturally occurring cannabinoids to December 11, 2026; synthetics still lose hemp status November 12 (13)(14). December 11 is also the day the stopgap funding expires, which is why the next fight is attached to the next funding bill. The bills in play are H.R. 10079, the Beverage Regulatory Parity Act, which would cap drinks at 5 milligrams a serving, require 21-plus, route sales through the three-tier system under TTB oversight and levy 8 cents a milligram; H.R. 9830, the Lawful Hemp Protection Act; and S. 3686, which would push the whole thing to 2028. None has cleared committee, thirty-five state attorneys general have asked Congress not to reverse the ban, and a White House official told lawyers there would be no further extension. The state layer runs on its own clock, summarized in the Emblem below. The association's position is that the status quo is "chaotic and unsustainable" and that intoxicating hemp should be regulated "like a socially sensitive consumer product" rather than prohibited; the law as written prohibits it.

Market access, state by state. This is where the year's legislative energy went, and most of it went nowhere. WSWA counted 938 alcohol and hemp-beverage bills introduced in 2026 through mid-July: 26 on-site sales bills, 9 self-distribution bills, 13 satellite-location bills and no direct-to-consumer shipping bill enacted in any state (25). The one clear win for brewers was Vermont's H.921, signed in June and effective July 1, 2026, which lets a brewery self-distribute up to 3,000 barrels a year under its existing manufacturer license instead of a separate $1,200 wholesale license, and raises off-site product-feature locations from one to ten. Georgia's SB 456, which would have allowed 1,000 barrels of county-level self-distribution and struck the 288-ounce daily to-go cap, died without a committee vote on April 2; Texas keeps its own 288-ounce cap and passed no market-access bill in 2025. No state enacted franchise reform in 2025 or, as far as we can find, in 2026; Nebraska is the live front. Missouri's beer and spirits shipping compromise was held to 2027. Colorado's proposed 5-cent-a-gallon "enterprise" fee was defeated by a coalition that included the association, the Beer Institute and the wholesalers. The lesson for a model is blunt. Direct-to-consumer shipping is not a growth channel for beer and should not appear in one. Self-distribution is worth real money in the handful of states that allow it, Vermont, New Hampshire, Maine, Maryland, Texas up to 40,000 barrels, and is a 2027 watch item everywhere else. The wholesaler tier is organized, funded and winning.

SBA 7(a) and 504, as the rules stand. SOP 50 10 8.1 took effect October 1, 2026. Its coverage floors are 1.15x for a standard 7(a) loan over $350,000 and 1.10x for a 7(a) Small loan, and Appendix 15 sets 1.25x for initial acquisitions, owner buyouts, ESOPs and cooperatives, with 1.15x for business expansions (26). This settles a piece of folklore we hear from brokers, that "1.25x is what the bank wants." For a brewery acquisition, 1.25x is the SBA's own floor, not a lender preference, and the lender's stress case has to clear it. Equity injection is a minimum of 10 percent of total project cost for a start-up or a complete change of ownership, non-waivable since October 2025; a seller note can count for up to half of it only if it stands fully by, with no payments, for the life of the loan (26). The rule that changed the borrower pool is citizenship. Procedural Notice 5000-876626, published February 11 and effective March 1, 2026, requires that 100 percent of direct and indirect owners be U.S. citizens or nationals with a principal residence in the United States; lawful permanent residents may not hold any percentage, and the 5 percent foreign-ownership exception of December 2025 was rescinded on February 2 (26). A brewing group with one green-card partner holding 1 percent is out of 7(a) and 504. On collateral, Appendix 19 as summarized by appraisers allows used equipment at no more than 50 percent of net book value or 80 percent of an orderly-liquidation appraisal, and new equipment at 75 percent of cost; we think 80 percent of OLV still overstates what a brewhouse returns at auction, and Section 7 says why. Both SBA programs run under the continuing resolution through December 11, 2026.

USDA B&I: the rule and the convention. The Business & Industry guarantee under 7 CFR part 5001 is the other door, and it is wider in two places and narrower in three. First, the rule on rural. For the guaranteed programs a rural area is anything outside a city or town of more than 50,000 and its contiguous urbanized area, under 5001.3 and 7 U.S.C. 1991(a)(13) (28). The 10,000 and 20,000 thresholds that lenders still quote belong to the direct programs and to priority scoring, not to B&I eligibility; check the address on the eligibility map and stop there. Second, citizenship. Under 5001.126(d) an individual borrower may be a U.S. citizen, a lawful permanent resident with a green card, or a citizen of the freely associated states, and Part 5001 contains no 51 percent or 100 percent citizen test for entities at all (28). The 51 percent rule in many credit memos is a relic of the legacy regulations at 7 CFR 4279.108. That makes B&I the natural program for immigrant-founded brewing groups since March 1. Third, size and term: loans to one borrower are capped at $25 million under 5001.406, terms may run to 40 years with no balloons under 5001.402, and the rate is negotiated, fixed or variable, with no cap on the spread under 5001.401 (28). The legacy caps of 30 years for real estate, 15 for equipment and 7 for working capital are no longer codified, but every lender still uses them, and so do we: that is convention, not rule, and the file should say which it is relying on. Market convention on the rate is prime plus 1.25 to 1.50 percent.

The narrower places are fees, equity and timing. The FY2026 fee notice, 91 FR 11272, published March 9, 2026 and effective back to October 1, 2025, sets a 3.0 percent upfront guarantee fee, a 0.55 percent annual retention fee on the guaranteed outstanding balance, an 85 percent guarantee below $5 million and 80 percent from $5 million to $25 million, and a further 0.50 percent for issuing the loan note guarantee before construction is complete (27). No FY2027 notice had been published as of late October; last year's came five months into the fiscal year, so underwrite at FY2026 terms with a sensitivity of 50 to 100 basis points on the fee, because the reported subsidy rate has gone from 0.20 percent in FY2025 to 1.09 percent in FY2026 and 1.93 percent requested for FY2027, with the default assumption raised from 7.91 to 9.02 percent. Those subsidy figures come to us through OMB credit supplements we have summarized elsewhere and have not reproduced here; treat them as reported. Equity is set by Table 1 to 5001.105(d): an existing business needs 10 percent balance-sheet equity or 10 percent of project cost; a new business needs 20 percent balance-sheet equity or 25 percent of total eligible project cost, and a new business asking for the guarantee before construction is complete needs 25 percent either way (28). For a start-up taproom or brewpub, 25 percent of cost meets every row, and that is the number we put in sources and uses. A feasibility study by an independent consultant acceptable to the Agency is required under 5001.306(a)(3) for any guaranteed loan over $1,000,000 to a new business, measured on the total loan rather than the guaranteed portion, a trigger we have written about in The $1 Million New Business Trigger (28).

The calendar. B&I's FY2026 program level was $1,429 million, down from $1,663 million in FY2025. For FY2027 the President requested $0, the House passed $2.0 billion on June 4 by 213 to 210, and the Senate committee had not marked up an agriculture bill as of September 10. The continuing resolution funds the program at roughly FY2026 rates through December 11 (29). On top of that sits an operational freeze that has nothing to do with Congress: under a stakeholder announcement of October 28, 2026, the OneRD platform stops accepting new B&I applications and servicing requests at 5 p.m. Eastern on November 20, 2026, ahead of a new lender portal; packages received by then are to be processed by December 31, anything unprocessed is returned for resubmission, and conditional commitments expiring between November 20 and February 28 are extended (29). No reopening date had been announced as of November 2. A brewery deal that needs a conditional commitment this year files in the next two weeks or plans for a first-quarter restart. The program also removed ten approved lenders on May 12, 2026, which between them held about $620 million of delinquent loans, 47 percent of Rural Development's delinquent book; two of them disputed the action publicly (31). Existing guarantees stand; new ones through those lenders do not. Check the originating lender against that list and against the Lender Lens dashboard launched January 19, 2026, which shows the commercial guaranteed portfolio by sector and delinquency. Two sector pauses, on biodigesters and controlled-environment agriculture, run through December 31, 2026, with delinquency in those books at 28 and 40 percent; a farm brewery that adds a spent-grain digester or a hydroponic hop house walks into them. And the portfolio's largest concentration, accommodation and food services at about a third of core obligations, is where reviewers look hardest. A hospitality-led brewpub plan is in the most scrutinized sector of the program, and the study should read as if it knows that.

Grants, briefly, because they are leaving. REAP grant awards were halted on March 31, 2026, the FY2025 to 2027 funding notice was rescinded on April 15 (91 FR 20090), and the rewritten rule at 91 FR 62600, effective October 16, 2026, pays grants only after a project has run for twelve months and produced measured data, at no more than 25 percent of cost, capped at $500,000 for renewable energy and $250,000 for efficiency, one application per owner per year, and barred for components from foreign adversary nations (30). Earthjustice and the Environmental Law & Policy Center sued over it on September 28. REAP guaranteed loans remain available at 80 percent, 1.0 percent upfront and 0.25 percent annual, and little used. The Value-Added Producer Grant fits only a producer-owned farm brewery that grows more than half its own grain, hops or fruit, and pays for marketing and working capital, not tanks; FY2026 awards were $50,000 for planning and $200,000 for working capital with a 1:1 match, the deadline passed in April, and the FY2027 request is $0. Rural Business Development Grants go to public bodies and nonprofits, never to a brewery. Our rule is that a grant appears in a brewery capital stack only after the award agreement is signed. Until then the base case is equity plus guaranteed debt.

The cost of money. Prime has been 7.00 percent since September 17, 2026, three points over the 4.00 percent upper bound of the fed funds range the FOMC held on October 28; the Federal Reserve's H.15 release of November 6 shows it at 7.00 for every day that week (32). The 10-year Treasury closed at 4.86 percent on November 6, off a 52-week high of 5.31 percent on October 5. A 7(a) loan at an illustrative prime plus 2.75 is 9.75 percent; a B&I loan at convention is 8.25 to 8.50. Those are the rates the worked example in Section 7 uses, and they are the reason a brewery that cleared coverage in a 2021 model does not clear it now.

The forecasts not to use. Any search for "craft beer market forecast" returns the same three vendors. Mordor Intelligence projects the global craft market from $142.78 billion in 2026 to $239.61 billion in 2031, a 10.91 percent compound rate, and implies about $55.8 billion for the United States in 2025. Grand View Research has the U.S. market at $30.5 billion in 2025 growing 7.7 percent a year to $54.5 billion by 2033. Fortune Business Insights projects 11.0 percent a year to 2034 (35). Set those against an association that reports volume down 4 percent in each of the last two years and a Beer Institute series down 5 to 6 percent, and the vendor numbers are not forecasts of this market. They are not decision-grade and we do not cite them in a study except to explain why they are absent. IBISWorld is the honest end of the vendor spectrum: 1.6 percent nominal annual growth for craft production to about $8.0 billion in 2030, and 1.3 percent for all breweries to $38.3 billion in 2031, on a producer-revenue base and a definition that includes Boston Beer (34). Those are price projections on flat-to-falling volume, and they are the ceiling of our base case.

What the association will and will not say. Its president told the Craft Brewers Conference in April that "the vibe is positive" and that it "feels like we're coming out the other side," and one trade blogger noted, fairly, that he offered few numbers (33). In the same month he said distributing breweries' production fell 7 percent in 2025 and that the first quarter had been better, with no statistics. Its economist, in July, wrote that "several indicators suggest the contraction may be moderating" and that it is "too soon to say whether craft has reached the bottom of the valley" (3). At CiderCon he described disruption that goes "well beyond cyclical downturns," driven by consumer behavior, retail consolidation, distribution and cultural attitudes to alcohol. In December 2024 the phrase was "a painful period of rationalization" (33). We read the sequence as an organization that is careful with words being careful with words. The best leading indicator it offers is the ratio of growing to declining breweries, 54 to 43 at midyear, and it has warned twice that its sample leans positive because the breweries that answer surveys are the ones still open to answer them.

Our scenarios. We carry three cases through 2031, and Emblem 6 lays them out. The base case has craft volume down 4 percent in 2026, 3 percent in 2027 and 1 percent in 2028, flat in 2029 and 2030 and up half a percent in 2031, which lands at about 20.4 million barrels, with nominal revenue growing 1 to 1.5 percent a year on price and mix. The operating count drifts from 9,344 toward roughly 9,000 by 2028 as a 5 percent closure rate meets 300 to 350 openings a year, then flattens. The upside case holds volume flat from 2027 and ends near 21.2 million barrels, which requires the opening rate to recover toward 450 and closings to ease toward 400; it also requires something to happen to the under-35 drinking rate that the data do not currently show. The downside case runs minus 4 percent through 2028 and minus 2 percent after, ending near 18.4 million barrels and a count in the mid-8,000s, and it is what a federal hemp ban with no framework, a 2027 can-contract reset at today's premium and a GLP-1 penetration of 20 percent would produce together. We do not assume volume recovery before 2028 in any case we would lend on. These are our projections, built from the association's data and the drivers in Sections 2 through 4, and they are offered as a planning frame rather than a prediction.

Consolidation is the exit. The craft-on-craft deals of 2025 and 2026 share a shape: a brand is kept, production is moved, and a taproom closes. Left Hand and Dry Dock merged on April 2, 2025 into an "independent craft platform," moved Dry Dock's production to Longmont immediately, raised about $820,000 from 396 investors on Wefunder, and closed the Aurora taproom in January 2026 (38). Fort Point and HenHouse merged on April 15, 2025 into a company doing about 40,000 barrels of beer and cider, consolidated production in Santa Rosa, and still contract-brew their largest SKUs at Gordon Biersch. Wiseacre bought Bearded Iris in July 2025, having already brewed its beer in Memphis since March, and closed the Nashville taproom on September 26. Jackalope bought Black Abbey on January 22, 2026. Bale Breaker bought Cloudburst in May 2026 as its founder moved to New Zealand. Duvel Moortgat USA and Firestone Walker agreed on April 21, 2026 to buy the Stone brand and selected hospitality sites from Sapporo, moving production to Paso Robles and Kansas City and leaving Sapporo to market the Escondido brewery (38). Not one of those deals disclosed a price or a multiple. The hard pricing in this market comes from distress, and it is low. Tilray bought BrewDog's UK business through a pre-packaged administration in Scotland for £33 million on March 2, 2026, the Australian business for "nominal consideration," five more pubs for £0.3 million, and the U.S. business, a Columbus brewery, pub and hotel plus three pubs, for a figure its 10-K reports as $9,293 in thousands, which we read as about $9.3 million (33). A brand that ranked 30th among U.S. craft brewers sold its U.S. brewery, hotel and four pubs for about $9.3 million, out of administration rather than at a multiple.

Distress, and what it clears at. Iron Hill's sixteen brewpubs went into Chapter 7 in the fall of 2025, equipment from nine of them was auctioned in December, and the court-approved sale of assets and leases went for $12 million. Goodwood in Louisville filed Chapter 7 on June 22, 2026; The Brewer's Art in Baltimore in February; Penn Brewery in Chapter 11 in April; 1840 in Milwaukee through a court-appointed receiver in May. Grafe Auction's report on its six 2025 craft-beverage sales, 2,221 lots with a 90.5 percent sell-through and 466 bidders, is the best public transaction dataset there is (20). Eleven complete brewhouses sold between $6 and $47,500; the top price was a DME 10-barrel at $47,500, a 7-barrel American Beer Equipment system went for $13,000, a 15-barrel NSI for $7,500 and a 40-barrel JVNW for $4,000. Forty-five fermenters averaged $3,029 with a median of $2,750. Canning and bottling lines had a median of $4,000 against $25,000 to $100,000 new. Kegs went for $27 to $55. Buyers exist, the 90 percent sell-through says so; prices are set by the oversupply, and larger brewhouses clear worst because few buyers have the floor for them. On the going-concern side, BizBuySell's median asking price for an established brewery is $495,450, and a Fort Collins listing we looked at asks $275,000 against $425,914 of furniture and equipment, $377,848 of revenue and $18,071 of cash flow, which is about 0.73 times revenue, fifteen times cash flow, and two-thirds of the equipment's book, for a business that would not cover a loan. A Truckee 20-barrel turnkey package listed at $60,000 in August.

The landlord's problem is the buyer's opportunity. Former brewery spaces are rarely backfilled by brewers. Finnegans' 17,520 square feet in Minneapolis went to an event venue after a $460,000 rent suit; Five Boroughs' 15,000 square feet in Brooklyn was offered at $26 a foot and the industrial half went to a cannery; a 9,300-square-foot former Iron Hill in Media, Pennsylvania was asking about $29,000 a month seven months after the bankruptcy. Tenant-improvement allowances tightened 8 to 15 percent in the first half of 2026, and the brewery-specific improvements, trench drains, 400-to-800-amp service, grease interceptors worth $15,000 to $80,000, are demolition scope for any tenant who is not a brewer, as we set out in The Craft Brewery Real Estate Hangover (38). To a brewer they are free. A hospitality-led concept that takes a second-generation brewery shell, buys a 10-barrel system and tanks at auction and negotiates rent abatement against the landlord's vacancy is underwriting at a steep discount to replacement cost, and that is the only new brewery we have seen clear coverage comfortably in 2026. Buy, do not build.

Winning models, with the counter-evidence. The models holding up are the ones the segment data already named: brewpubs with food, where Left Hand's planned Dry Dock brewpub and Hendler's enlarged Wormtown taproom with a chef's menu are the template; asset-light production, where Hendler's Jack's Beverage Co. contract arm, Fort Point HenHouse's use of Gordon Biersch and Austin's Independence moving to Real Ale after closing its taproom are the pattern; and local density over territory, where Jackalope's owner says he will win Nashville before the rest of Tennessee and Fort Point HenHouse explicitly rejected expansion. Non-alcoholic beer is a portfolio line, with Athletic sixth on the association's 2025 list and Hoplark in Chapter 7 as the two poles. Hemp-THC was a lifeline in Chicago and Minneapolis and is now stranded revenue being sold off before November 12. Multi-beverage portfolios, Barrel One's Dunkin' Spiked and Fort Point HenHouse's cider, are real but unmeasured; we found no segment data on spirits, RTDs or cider inside breweries, and a study should not invent any.

Revenue first, and from the right barrel. We build a brewery model on on-site barrels at the 25th-to-50th percentile of the association's benchmarking, $1,060 to $1,280 a barrel of beer, with food and merchandise layered on from the operator's own comparables rather than a national average that does not exist (15). Wholesale barrels go in at about $600 at best, closer to $320 to $550 for a small brewer, with EBITDA in the low single digits, which is what the vendor benchmark of 1 to 5 percent for wholesale and 8 to 24 percent for the taproom unit implies and what the segment data confirm. Volume comes from the trade area, not the state. We draw drive-time trade areas, count every brewery, brewpub, taproom and non-alcoholic or THC alternative inside them including the ones that closed in the last two years, compute density per 100,000 adults over 21 against the 3.7 national figure and the 9-per-100,000 saturation line, and triangulate demand from per-capita craft consumption, the association's visit frequency and the throughput of comparable taprooms. A plan that depends on new wholesale distribution is stress-tested as if that distribution does not arrive, because in 2025 it fell 7 percent for the breweries that already had it.

A worked example. Take a 10-barrel taproom-led brewery with light food in a second-generation space, total project cost $1.6 million, 25 percent equity of $400,000, and a $1.2 million loan. It sells 1,200 barrels a year across its own bar at $1,100 a barrel of beer, about $1,400 a barrel all-in with food and merchandise, for $1.68 million of revenue, and runs a 14 percent EBITDA margin, $235,000, after a market salary for the owner. On a ten-year 7(a) at an illustrative 9.75 percent, annual debt service is about $188,000, and coverage is 1.25x. That clears the 1.15x floor for a standard 7(a) loan and sits exactly on the 1.25x floor that Appendix 15 would apply if this were an acquisition (26). Now cut revenue 10 percent, to $1.51 million, and let half of the lost revenue fall through to EBITDA, which is what a business with a fixed rent, a fixed brewer and a fixed bar staff does. EBITDA is $151,000 and coverage is 0.80x. A 20 percent packaging shock barely registers in a draught-heavy taproom, and a 200-basis-point rate rise takes base-case coverage to about 1.15x on its own, but the revenue miss is the one that kills the loan, and 10 percent is not an exotic miss in a category falling 4 percent a year with a 5 percent closure rate in the neighborhood. The same cash flow on a 25-year B&I term at 8.5 percent against owned real estate services about $116,000 a year and covers 2.0x in the base case and 1.3x in the stress. Term is the lever that matters most, which is an argument for owning the building when the deal allows it and for USDA's 40-year outer limit when the address qualifies.

The stress cases we run. Revenue down 15 and 25 percent with fixed costs held; packaging up 20 percent; rates up 200 basis points; a 12-month ramp with no revenue in the first quarter; THC revenue at zero; and, for anything in a dense market, a competitor opening at the eighteen-month mark. We show DSCR monthly for five years at the base and each downside, and we structure to clear 1.25x under moderate stress regardless of which SBA floor technically applies, with at least 20 percent total equity in cash and standby seller note for a start-up, even though the SBA minimum is 10 percent. Minimum equity gets a deal approved. Adequate equity gets it to stabilization. Our companion piece on DSCR stress testing sets out the mechanics.

Collateral, at auction prices. The SBA's rule allows used equipment at up to 80 percent of orderly-liquidation value; the auction market says that is generous. The $300,000 of equipment in the example above, bought new, is a 10-barrel brewhouse, four or five unitanks, a glycol system and a small canning line. The best 10-barrel brewhouse at Grafe's 2025 sales fetched $47,500; 10-barrel fermenters averaged $9,125; glycol systems had a median of $2,100; canning lines a median of $4,000 (20). A realistic recovery on that package is $70,000 to $100,000 before the auctioneer's commission and the cost of removal, which is 23 to 33 percent of cost and consistent with the 10-to-50 percent range in the Good Beer Hunting survey of sellers and the "10, 20, 30 cents on the dollar" an industrial auctioneer gave ProBrewer. The 40-to-80 percent figures that equipment lenders and startup-cost sites publish are asking prices or self-interested estimates and do not survive a sale date. The practical consequence is that a brewery loan is a cash-flow loan with a personal guaranty, and the collateral schedule in the study should be built from auction comparables rather than replacement cost or a percent-of-new rule. Workout practice says the same: the RMA guidance on distressed microbrewery loans calls for a fresh net-OLV appraisal, cross-collateralization, landlord lien waivers and modifications of no more than twelve months, and notes that the glut of used equipment has pushed resale values down. Get the landlord waiver at origination. It is cheap then and expensive later.

Management, and the things no dataset holds. When the operating record is thin, lenders lean on projected cash flow, the buyer's industry experience and the equity injection, and the SBA asks for an industry-experience summary and three years of target financials on an acquisition. We found no published minimum years of brewing or hospitality experience, and we would not propose one; we would propose that a plan with a brewer and no restaurant operator is a plan for the wrong half of the business. Four diligence items have no national data and must be gathered locally: wastewater and pretreatment surcharges, the CO2 supply contract and whether recapture is specified, the utility tariff, and the lease rate and improvement allowance on second-generation brewery space. We found no SBA charge-off series for NAICS 312120, no USDA brewery-specific program terms and no lender-published standard for a brewery feasibility study. The standard, in practice, is whatever the study can defend, and the test of that is whether every number in it has a date and a source.

First, use the May 29, 2026 figures and say that you are. The 2025 base is 22,034,000 barrels, minus 4 percent, $28.0 billion at retail, 9,578 breweries and 191,000 jobs. If a reviewer's deck shows 21.86 million and minus 5.1, it was built in April, and the study that corrects it gains credibility before the market section begins.

Second, underwrite volume flat to down. Our base case for 2026 and 2027 is minus 3 to minus 4 percent for craft, with no recovery assumed before 2028, and nominal revenue growth of 1 to 1.5 percent on price and mix. IBISWorld's growth rate is the ceiling. Mordor's and Grand View's do not belong in the file.

Third, size the project on taproom barrels and treat wholesale as marginal. On-site beer at $1,060 to $1,280 a barrel; distributed beer at $320 to $600; EBITDA on the wholesale barrel in the low single digits. A plan whose coverage depends on wholesale growth is a plan whose coverage depends on the segment that lost 8.9 percent last year.

Fourth, strip hemp-THC revenue to zero after December 11, 2026, in every state, and model an upside only if a federal framework passes. In Illinois, Ohio, Missouri, New Jersey and California the state has already closed the alcohol channel, and no federal fix reopens it.

Fifth, stress the can. Model packaging at least 25 to 40 percent above 2024 cost, assume the 2027 contract reset locks it in, and treat a lower Midwest Premium as upside. Favor draught-heavy, taproom-heavy mixes, and escalate any pre-2025 construction quote by 8 to 12 percent with a metals contingency.

Sixth, build the collateral schedule from auction comparables. A 10-barrel system and tanks recover $70,000 to $100,000 at a sale, not half of cost, and the loan is a cash-flow loan with a guaranty. Get the landlord's lien waiver at closing.

Seventh, measure saturation in the trade area, not the state. Density per 100,000 adults over 21 against 3.7 nationally and 9 as the saturation line; every competitor and every closure within the drive time; a competitor opening at month eighteen in the downside case.

Eighth, pick the program by the owners and the address. Any green-card equity sends the deal to USDA B&I or conventional debt. A rural address under the 50,000 test, owned real estate and a long-dated need favor B&I's term; a quick close favors 7(a). If it is B&I and it needs a commitment this year, it files before 5 p.m. Eastern on November 20. Equity at 25 percent of cost for a start-up satisfies every row of the table, and if the loan is over $1 million to a new business the independent study is required, not optional. This is the work an independent brewery feasibility study does, and it is the difference between a file that argues and a file that shows.

The figures in this report are current to the dates stated beside them. Five items move faster than the rest and should be re-checked before any decision: the federal hemp-THC effective date of December 11, 2026 and whatever Congress attaches to the funding bill due the same day; the USDA B&I portal closure at 5 p.m. ET on November 20, 2026 and the reopening date, not yet announced; the FY2027 OneRD fee notice, not yet published, and FY2027 agriculture appropriations, with the Senate yet to mark up; the Midwest aluminum premium, which moves with any U.S.-Canada tariff news; and the Brewers Association's year-end "Year in Beer" count, due in December, which will give preliminary 2026 openings and closings. The association's full 2026 production report is due in April 2027, and if 2026 follows 2025 it will be revised in May. We refresh this report when any of those lands, and the Key figures block carries the date of each number.

Has craft beer bottomed out?

Not by any measure the industry's own association will put its name to. Craft volume was down 4 percent in 2025 and down 4 percent in the first half of 2026; the operating count fell 1.8 percent in the year to June 2026 (1)(3). The association's wording is "correction" and "contraction may be moderating." A slower decline is a slower decline.

Why do the taproom and microbrewery numbers differ so much?

Because they are different businesses. A taproom barrel sells for about $1,276 and a wholesale barrel for about $602 at the average, and under $550 at the 75th percentile for small brewers (15). The taproom lost 3.9 percent of volume in 2025 and the microbrewery, which sells most of its beer off-site, lost 8.9 percent (1). Hospitality is the business model; brewing is the production department.

Is the 1.25x DSCR a lender rule or an SBA rule?

For an acquisition, it is the SBA's. SOP 50 10 8.1 Appendix 15 sets 1.25x for initial acquisitions and owner buyouts and 1.15x for expansions; the floor for a standard 7(a) loan is 1.15x and for a 7(a) Small loan 1.10x (26). We structure every brewery deal to clear 1.25x under stress regardless.

Can a brewery with a green-card partner get an SBA loan?

Not since March 1, 2026. Procedural Notice 5000-876626 requires 100 percent U.S. citizen or national ownership for 7(a) and 504, with no percentage for lawful permanent residents (26). USDA B&I admits lawful permanent residents as individual borrowers and has no entity citizenship percentage test in 7 CFR 5001.126(d) (28).

Is USDA B&I still taking brewery applications?

Yes, until 5 p.m. Eastern on November 20, 2026, when the OneRD platform closes for a portal migration; packages received by then are to be processed by December 31 (29). FY2026 terms apply: 3.0 percent upfront, 0.55 percent annual, 85 percent guarantee under $5 million (27). FY2027 funding is unresolved.

Can we count a REAP grant toward the solar array or the chiller?

Not in a base case. REAP grant awards have been halted since March 31, 2026, and the October 2026 rule pays grants only after twelve months of measured operation, at no more than 25 percent of cost (30). Finance it with equity, a REAP guaranteed loan or private debt, and treat a later grant as upside.

How much does THC revenue matter?

For most breweries, not at all; for some, a great deal. Minnesota examples run from 15 to 40 percent of revenue and the state guild says half its 150 members are in hemp (13). The federal redefinition takes effect December 11, 2026 for naturally occurring cannabinoids, and Illinois, Ohio, Missouri, New Jersey and California have already routed those products out of the alcohol channel (13)(25). We model it at zero.

What is used brewing equipment worth as collateral?

At 2025 auctions, complete brewhouses sold for $4,000 to $47,500, fermenters for a median of $2,750 and canning lines for a median of $4,000 (20). That is roughly 5 to 30 percent of new cost for brewhouses and tanks. The 50-to-80 percent figures published by equipment lenders are not transaction data.

Will the aluminum tariff come down?

The April 6, 2026 restructuring kept sheet and cans at 50 percent and cut lids to 25 (17). The Midwest Premium was 106 to 108 cents a pound on October 13, 2026 (18). Harbor Aluminum's scenario of 60 to 80 cents if the Canadian tariff is halved is a scenario. The association expects 2027 can contracts to lock in current costs.

Where should a new taproom go?

Where the density is low and the drive time is short. Texas, Florida, Georgia and Arizona have 1.9 to 2.3 breweries per 100,000 adults over 21; Vermont has 14.6 (5). The East North Central division was the only one to grow in 2025. Inside any of those, the trade-area count, including the closures, decides it.

November 7, 2026, by Michal Mohelsky, principal of MMCG Invest, LLC, a national SBA and USDA feasibility study consultancy. If you are underwriting, buying, building or working out a brewery, brewpub or taproom, book a 30-minute scoping call and bring the term sheet.

This report is general industry analysis prepared for lenders, investors and operators. It is not legal, tax, investment or lending advice, and it is not a feasibility study for any particular project. Figures are drawn from the sources listed below as of the dates stated; several have been revised during 2026 and may be revised again. Vendor-sourced cost ranges, auction results and third-party forecasts are labeled as such and should not be relied on without independent verification. Regulatory citations reflect the law and agency guidance as we read them on November 7, 2026; statutes, SOPs, notices and effective dates change, and some regulatory text was confirmed through secondary reproductions and should be checked against the eCFR and the SOP before it is relied on in a credit decision. MMCG Invest, LLC provides independent feasibility studies and has no financial interest in any brewery, lender or vendor named here.

7 CFR Part 5001 Handbook: USDA OneRD Guaranteed Loans, Section by Section, the companion reference for the regulatory citations in Section 5.

Our companion pieces on debt service coverage, "When DSCR Fails" and the stress-testing flagship, set out the mechanics behind the worked example in Section 7.