• The specialty coffee and craft beer industries have followed similar trajectories over the last two decades, experiencing explosive growth in the early 2010s.
• But today, market consolidation, rapidly changing consumer preferences, and rising retail prices are reshaping both.
• Six major brands now produce approximately half of the world’s beer. In 2024, the number of independent breweries that closed was greater than the number that opened in the US alone.
• Gen Z consumes about one-third less beer and wine than previous generations, and is also shifting toward alcohol-free beverages at a significantly higher rate.
• There are lessons from this for specialty coffee roasters; balance innovation with accessibility, premium positioning with value delivery, and novelty with consistency.

The specialty coffee and craft beer industries have long shared a pursuit of quality, innovation, and artisanal excellence – and thrived as a result. But in recent years, both have faced similar challenges that are reshaping their respective markets.

Between 2024 and 2025, the UK alone lost over 100 independent breweries. Rising retail prices, market consolidation, and the surge in non-alcoholic offerings as Gen Z curbs their alcohol intake mean craft breweries are struggling more than ever.

Specialty coffee, meanwhile, is grappling with similar predicaments: record green coffee costs, supply chain volatility, a string of mergers and acquisitions, and rapidly changing consumer demands.

Examining craft beer’s recent struggles could then offer valuable insight for specialty coffee’s future trajectory.

Erik Busch of LongStory Coffee, former head brewer Sam Jory, and Arne Jach of Braukon share their perspectives.

You may also like our article on why craft beer and specialty coffee are more similar than we realise.

The parallel paths of specialty coffee and craft beer

The relationship between specialty coffee and craft beer extends beyond occasional collaboration – think coffee stouts or cascara sours, for instance. Both industries built their foundations on quality, small-scale production, and an appreciation for artisanal excellence.

Around the same time Erna Knutsen coined the term “specialty coffee” in the 1970s, the microbrewery scene emerged, most notably in markets like the US and the UK. At first, “microbrewery” solely referred to the size of a business, but it quickly started to reflect a more artisanal, intentional approach to brewing – similar to the ethos of micro and nano roasters, which proliferated in the early 2010s.

The term “craft brewing” thus became synonymous with “microbrewing”, representing small, independently owned commercial breweries that emphasise flavour and quality – again, much like specialty coffee roasters.

“Perhaps the most obvious similarity is that both industries produce two of the few widely consumed legal stimulants – caffeine and ethanol,” says Arne Jach, the Brewmaster International Support Team at Braukon in Seebruck, Germany, a brewing and beverage equipment supplier.

“The customer bases also overlap. Many people who enjoy craft beer or specialty coffee are willing to pay a little more for better quality and often prefer to support independent or local businesses, especially those that prioritise sustainability,” he adds.

Similar to specialty coffee, many factors influence the final flavour profile of beer. These range from the quality of the grains, hops, and yeast to the different processing methods (including the fermentation stage) that brewers use.

Additionally, there is also a shared proclivity for more interesting, unique flavours. Just as many craft beer enthusiasts enjoy fruity, herby IPAs and “funky” Goses, specialty coffee consumers have increasingly embraced innovative experimental processing techniques that result in more unorthodox tasting notes. 

This shared consumer psychology has created a cross-pollination effect, with specialty coffee drinkers often becoming craft beer enthusiasts and vice versa.

Why craft beer is struggling

Both specialty coffee and craft beer have long been staunch advocates for quality and flavour innovation, catering to consumers seeking an alternative to mass-produced beers and coffee products.

As specialty coffee proliferated in the early 2010s, craft beer also experienced a boom in consumption, and mainstream brands saw an opportunity to capitalise on its success. One example is Danish brewing giant Carlsberg, which launched its Crafted range in 2014 to secure a stronger foothold in the burgeoning craft beer market.

It was, however, a sign of pending destructive market rivalry. 

“Currently, the craft beer industry is facing issues like market saturation, change in consumer preferences, and a threat from outside similar industries,” says Erik Busch, the owner of LongStory Coffee in Illinois, US. Erik is also a craft beer enthusiast with over five years’ experience working in the beer industry.

Craft beer, once heralded as an unstoppable force in the beer industry, has experienced significant market consolidation in recent years.

In what was considered the deal that triggered a wave of buyouts in the craft beer market, the UK’s Camden Town was bought by global drinks giant AB InBev (which owns brands like Budweiser, Stella Artois, and Beck’s) for over US$114 million in 2015.

This trend has continued in the years since. Dutch brewer Heineken acquired a minority stake in Beavertown Brewery, while Danish brewing giant Carlsberg and British pubs and cask ale firm Marston announced a joint venture in 2020.

The result of these mergers and acquisitions? Six major brands now produce approximately half of the world’s beer. 

While independent brands benefit from investment capital – they can scale much more quickly and reach a wider audience – research from the American Antitrust Institute shows that significant market consolidation can impede innovation and healthy competition. 

Indeed, craft beer is struggling. In 2024, the number of independent breweries that closed was greater than the number that opened in the US alone.

Changing consumer preferences

“A lot of people don’t drink as much beer as they did eight years ago, or they don’t drink alcohol at all,” says Sam Jory, a former head brewer at a leading beer company in Vancouver BC, Canada. “Breweries are now forced to offer alcohol-free versions of their beers, which isn’t easy.”

Often described as the “soberest generation yet”, Gen Z consumes about one-third less beer and wine than previous generations, and is also shifting toward alcohol-free beverages at a significantly higher rate. Growing awareness of health, well-being, and metacognition (or an awareness of one’s own thoughts), as well as changing social patterns, are driving the low and no-alcohol trends.

“Craft beer drinkers are starting to drink less beer and move towards non-alcoholic drinks, canned cocktails, and seltzers,” says Erik.

Meeting the growing demand for health and convenience, sales of RTD hard seltzer skyrocketed in the late 2010s. Brands like White Claw and Truly – containing roughly 100 calories and less than 5g of sugar per can – captured 75% of sales between them in 2021.

Although potentially lucrative, diversifying into other beverage markets has proved difficult for many breweries.

“Many smaller breweries don’t have the capacity to produce these other beverages, so they have either closed or are struggling, unless they have a strong loyal following,” Sam says.

Other reasons for the shift are price sensitivity and familiarity. More people are seemingly turning away from craft beer, with its higher price tag, in favour of cheaper, more “traditional” options.

The “unusual” flavours that once served as unique selling propositions for microbreweries are losing their appeal among some beer drinkers. Consumers are gravitating toward more traditional beer styles, seeking familiar comfort rather than adventurous experimentation.

Economic downturn often predicts this shift. Research from Euromonitor shows that during times of uncertainty and stress, people typically opt for familiar, nostalgic foods and beverages to provide a sense of comfort and stability.

Specialty coffee is dealing with the same challenges

We can draw many parallels between the challenges that both specialty coffee and craft beer face.

Mergers and acquisitions have been a common theme in the coffee industry since the mid 2010s. Companies like JAB Holdings and Nestlé purchased majority stakes in pioneering third wave roasters, including Stumptown, Blue Bottle, and Intelligentsia, during this time.

Over the last couple of years, rising interest rates and shrinking profit margins have also driven the trend of consolidation in the green coffee trading sector. Major players have acquired smaller traders to expand or set up their own specialty-focused operations.

This paints a similar picture to the beer industry. According to the International Trade Centre’s Coffee Guide, “the ten biggest roasters control more than 35% of all coffee sales” and are increasingly acquiring specialty brands “as part of a strategy to establish a presence in all quality segments of coffee”.

Coffee consumer behaviour is also changing rapidly, especially among younger generations. While older generations primarily stick to black coffee and traditional milk-based beverages, Gen Z consumers are opting for cold coffee, matcha, and RTD drinks, which all serve as the ideal canvas for customisation, creativity, and self-expression, effectively changing how they experience coffee.

Simultaneously, as retail prices rise, more coffee drinkers are seeking cost-effective options that provide familiar flavour profiles. The endless pursuit of experimental processing methods and “rediscovered” varieties may have reached a saturation point, with consumers showing signs of fatigue from constant innovation.

“It’s the same in craft beer; variety used to be the driving factor,” Erik explains. “Consumers would stop at breweries and want to try what was new. With consumption declining, consumers are looking for a safe option.

“This means a recent uptick in lagers and simple IPAs. Consumers are no longer looking for a fruity sour that was fermented with an obscure yeast strain. Now they want a crisp, clean, smooth lager again,” he adds. “This isn’t to say they’re switching to the macro breweries’ mass-produced lagers, but are instead asking their local breweries for more lagers.”

What can specialty coffee learn from craft beer’s struggles?

The key takeaway for coffee roasters is recognising when innovation reaches diminishing returns. Just as craft beer consumers are returning to classic styles, specialty coffee may benefit from refocusing on traditional excellence rather than novelty. This doesn’t mean abandoning innovation but rather ensuring that quality and consistency remain the foundation upon which to build creativity.

In the context of specialty coffee, this translates to developing exceptional blends alongside solid single origin offerings, sourcing from more cost-effective and consistent origins like Brazil, and diversifying products to include cold and RTD options.

“Many successful breweries are now focusing on efficiency, cost control, and sustainability. There is a growing shift towards producing larger volumes and appealing to broader audiences, rather than focusing on niche styles of a small group of craft beer enthusiasts,” Arne says. “A dependable customer base buying beers with lower margins can often be more sustainable than chasing high-margin, trend-driven products.”

The polarisation observed in craft beer consumption – loyalty to either larger brands or small local operations – suggests that specialty coffee businesses may need to define their market position more clearly. Mid-size operations, in particular, may struggle in an increasingly polarised market, making it crucial to either scale sustainably or double down on local community engagement.

For coffee shops and roasters, this means strengthening community ties, personalising customer experiences, and building genuine relationships that transcend transactional interactions. Meanwhile, for larger operations, it emphasises the importance of maintaining quality and values while achieving scale.

The craft beer market is in a state of flux, and breweries need to pivot in one of two directions: focus on delivering high value to a niche consumer segment or diversify their offerings.

Specialty coffee stands at a similar crossroads. If it wants to thrive over the next few years, there are many lessons to be learned.

“I believe the specialty coffee industry is five to ten years behind the craft beer industry, and the best way to make sure that we don’t make the same mistakes is to be aware,” Erik concludes. “When it comes to consumer trends, all we can do is prepare for them, not prevent them.”

Enjoyed this? Then read our article on whether brand partnerships always help roasters grow.

Photo credits: LongStory Coffee

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