Craft breweries offer more than local beer. They provide a “third place” for community members and are oftentimes helmed by the very neighbor who handcrafted those brews.
But even these most homegrown of American businesses aren’t insulated from policies that aim to shore up US industry and penalize other countries.
President Donald Trump’s recently announced tariffs — a blanket duty of 25% on all steel and aluminum imports — are expected to negatively affect the nation’s craft brewers by driving up the cost of critical materials used to brew, house and serve their beer.
And these potential hits are landing at an unwelcome time for the industry.
The once-flourishing craft beer industry has been put on the ropes, dealt blow after blow after blow in recent years.
The pandemic sapped the lifeblood — taproom sales — from many operations, forcing them to lean more heavily on to-go vessels such as cans and bottles; global supply chain challenges caused shortages and drastic price hikes of key inputs, including cans (which already were getting more expensive following the 2018 tariffs); and those breweries still standing were then stung by a shift in consumer’ and retailers’ palates for beverages beyond beer.
In 2024, for the first time in nearly 20 years, more craft breweries closed than opened.
“It’s honestly been a tough couple of years for the small craft brewer in America,” Caleb Hiliadis, head brewer of Northampton, Massachusetts-based Amherst Brewing Company, told CNN. “But post-Covid, aluminum, specifically cans, has become incredibly important to us and every other small, independently owned craft brewer in the nation. Aluminum cans are a massive part of our business.”
‘The prices are probably going to go up’
In early 2025 sales data, beer in aluminum cans accounted for approximately 75% of craft breweries’ packaged volume and revenue, according to data from the Brewers Association, a trade organization for small and independent brewers.
And a good number of those beer cans aren’t made in the USA and instead come from Canada, the Brewers Association noted in an advisory to members released Monday. In terms of steel, Canada and Mexico account for nearly 40% of what the US imports.
The implementation of “25% tariffs could have a broad impact on aluminum prices across the world, and a direct impact on US manufacturing companies that make a variety of steel products, including kegs, steel tanks, brewhouses and building materials,” Katie Marisic, the Brewers Association’s senior director of federal affairs, wrote in the notice.
While proponents of tariffs say domestic manufacturers could gain a competitive advantage and encourage increased purchasing, the 2018 tariffs served as a case study for the exact opposite.
Research conducted by Federal Reserve banks as well as the International Trade Commission found that steel and aluminum prices increased as a result of the tariffs, despite carve-outs exempting Canadian aluminum.
Jason Klein, co-founder of Spiteful Brewing in Chicago, experienced that first-hand.
“Last time, we were hit with a 3% increase in pricing for cans, and that was when we bought American,” Klein said. “That was the opposite of what was supposed to happen. It seems like no matter who you buy from, the prices are probably going to go up.”
The new tariffs, set to take effect March 12, are expected to raise producer prices for steel and aluminum by 15% to 20% in the coming months, economists for Pantheon Macroeconomics estimated in a note issued Monday. The market is expected to adjust to the price increases, limiting the effect on inflation; however, a lasting 10% rise in steel prices and 15% rise in aluminum would cost consumers an extra $8 billion a year, they wrote.
Klein is bracing for an even bigger impact this time around, since Spiteful’s cans are sourced from Canada.
“Buying American is challenging for us; we tried that, but we were too small to buy from the big American manufacturer,” he said. “So we get pushed to brokers who pool their resources together and currently our cans come from Canada. They’re gonna get hit with a price increase, and then that’s going to get passed on to us.”
Three years ago, craft brewers were sent scrambling after Broomfield, Colorado-based Ball Corp. increased its minimum supply orders for cans as well as pricing.
‘At a tipping point’
Klein and other craft brewers are trying to prepare their already paper-thin-margin business for a potentially higher cost environment.
“When we used to buy from an American company, they would warehouse our cans for us; so, we were able to purchase truckload quantities and then pull as needed,” Klein said. “That’s no longer an option. Now, once a month, we try to buy as many as we can possibly fit in our building.”
The brewery is able to squeeze in about 15 pallets on the floor of its 6,500-square-foot production area and stack them about 16 feet high.
“It’s a bit of a Tetris act,” he said.
It’s a waiting game in Chicago, but in Massachusetts some brewers are already hearing that price increases are coming down the pike.
Even before Trump signed the executive order on Monday, brewers received notices from vendors about tariff-related price increases, Katie Stinchon, executive director of the Massachusetts Brewers Guild, told CNN.
Canned beer accounts for more than 60% of packaged beer sales for guild members, she said, adding that Canada is one of the largest suppliers of aluminum for those cans.
“While all breweries will feel the impact, our smallest breweries will be hit the hardest,” she said via an emailed reply to a CNN query. “They don’t have the capital or storage space to buy aluminum in bulk at lower prices, and they already operate on thin margins. Meanwhile, they’re competing against multinational beer corporations that can absorb these cost increases.”
She added: “If these tariffs remain in place, we’ll see higher prices for consumers, tighter budgets for local breweries and a direct threat to jobs and the survival of these small businesses.”
And many of those breweries are “already at a tipping point” where they can no longer pass further increases along to their customers, Amherst Brewing Company head brewer Hiliadis said.
“None of us really want to do that either, because that’s not why we got into this business of making beer,” he said. “But we’re pretty much at the limit of what the market can handle for a craft beer, and that’s just aluminum.”
Bringing costlier steel into the mix would be another blow, he said, noting that stainless steel is the “backbone” of craft brewing and used in every step of the brewing process.
“This is going to stagnate growth of the independently owned and operated craft breweries by raising that barrier of entry to an even higher level,” he said. “You’re not really going to see the small owner-operator who works the tap room, who sets up shop in a space that nobody else was using — to make a community space.”
“You’re not going to see that if the cost of these commodities continue to go up,” he said.
