By Jacob Mancini
As we enter the holiday season, breweries are offering more than just their usual seasonal brews. While pumpkin ales and festive stouts remain fan favourites, there’s a bigger change fermenting in the industry, one that goes beyond what’s in your glass. Breweries are starting to reimagine their spaces, evolving from production facilities that also offer vibrant event venues. This shift marks a broader trend toward creating experiences, allowing breweries to tap into new revenue streams and stay competitive in an increasingly challenging market.
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Brewing costs and the need for change
The cost of running a brewery has skyrocketed in recent years. Raw materials, taxes, and distribution fees are making it difficult for smaller craft breweries to survive by just producing beer. More and more, breweries are pivoting from the traditional model of producing beer on-site to embracing something much more dynamic. They’re turning their production spaces into experiential venues that are as much about the atmosphere as they are about the beer itself.
Rather than relying solely on beer sales, breweries are creating spaces where people can gather for events like weddings, corporate parties, and community gatherings. This offering not only diversifies their income but also makes them more relevant in a market where consumers crave unique experiences. As we see more breweries pivot to this model, it’s clear that the brewing industry is no longer just about production; it’s about creating environments where customers can enjoy the drink, the food, and the event.
Making memorable experiences
This shift toward event-focused spaces comes at a time when consumers are actively seeking out experiences over just products. We’ve seen this trend rise across various industries, and breweries are no exception. People aren’t just looking to enjoy a beer, they want a memorable experience in a hip space that connects them with others. Breweries have the perfect setup for this, as they’re often housed in interesting, industrial-style buildings, which can be transformed into social spaces for everything from holiday parties to concerts.
During peak times like the holiday season, breweries are capitalizing on this by turning their venues into festive event hubs. The brewery becomes more than a taproom, it becomes a gathering space for the community. What we see is that these active operational shifts help breweries stay competitive, especially as they compete with restaurants, bars, and other venues for event bookings. It’s no longer just about selling beer; it’s about offering an experience – good food, good music, good company and quality drinks – that keeps customers coming back.
The rise of contract brewing
While some breweries are shifting toward event spaces, others are exploring different ways to scale their production without taking on massive overhead costs. One popular model is contract brewing, where smaller breweries outsource their production to larger facilities. This allows them to meet the demand for their products without expanding their physical footprint or investing heavily in additional brewing equipment.
For many small breweries, contract brewing is the key to staying afloat. It allows them to maintain their brand identity while achieving the economies of scale necessary to stay profitable. Especially during busy times, like the holidays, contract brewing helps breweries keep up with demand without the burden of increased operational costs.
The growing non-alcoholic trend
One of the most interesting changes in the brewing industry is the rise of non-alcoholic beverages. It’s easy to dismiss this as a niche market, but in reality, it’s growing, and fast. Younger generations, particularly Gen Z, are drinking less alcohol than older cohorts. They still enjoy the social aspect of drinking but are opting for more health-conscious refreshments that skip the booze.
This shift in consumer behaviour is pushing breweries to develop more sophisticated non-alcoholic drinks. We’re seeing everything from alcohol-free craft beers to inventive mocktails. While trendy, a consideration is that producing these beverages isn’t as simple as removing alcohol, it requires the same fermentation process with an added step to eliminate the boozy content. But there’s an upside: non-alcoholic beverages don’t carry the hefty taxes that alcoholic drinks do, which allows breweries to sell them at competitive prices with much better profit margins.
Beyond just production, non-alcoholic beverages are opening new marketing opportunities. In addition to new segments that Gen Z presents, more celebrities are jumping on the trend. Ventures with famous names attached represent a broader movement toward mindful consumption and reinforce that people want healthier options, but still crave the social benefits of delicious drinks shared among friends, family, and co-workers.
Looking ahead to 2025 and beyond
As we look to the future, it’s clear that the brewing industry is evolving in exciting ways. The push toward experiential spaces, contract brewing, and non-alcoholic options highlights broader consumer trends that breweries should and need to take into consideration as they look ahead. People want experiences that go beyond simply drinking – they want to feel connected, whether that’s through attending an event or sipping a well-crafted non-alcoholic beer.
The brewing industry is expected to keep evolving through 2025, propelled by consumer demand for new experiences and the necessity for breweries to discover innovative strategies to succeed in a competitive market.
As Assistant Vice President, Restaurant & Brewery Finance, at CWB Franchise Finance, Jacob Mancini oversees all aspects of the restaurant lending business, which provides financing for branded restaurant chains on both a corporate and franchisee level. Jacob specializes in portfolio and business development for both national and regional chains.
