Back in 2013, the Legislature passed a law that legalized taproom beer sales for small brewers. This revolutionized the craft brewing industry and led to a boom in small breweries across the entire state.
But over a decade later, that trend is reversing.
And while craft breweries are struggling at the national level, Texas has been hit particularly hard.
Maggie Gordon, a senior storytelling editor at Straight Arrow News, said that in 2024 more breweries closed than opened in Texas.
“That’s something that is mirroring a national trend,” she said. “A lot of these breweries that had been opening up over the last 10 years or so were happening in more urban environments. Specifically here in Houston, we saw a lot of breweries opening up in the Heights area, which made a lot of sense because if you look at the demographics of this city – that’s where a lot of millennials live. And millennials were a really key target demographic for craft beer.”
But as millennials got older and gained more buying power, a lot of the areas in which that age group lived has become more expensive.
“Ten years after the breweries open there, they’re looking to re-lease these spaces, which are now a lot more expensive than they were 10 years ago,” Gordon said. “And so the real estate portion of it is a really fascinating part of it. It’s not just about taste and cultural moments.”
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Though taste is part of the equation, and Gordon said Gen Z isn’t going out to drink as much as millennials did.
“Between 2001 and 2003, 49% of those young adults said that they drank regularly,” she said. “A couple of years ago, that same data shows it’s only 38%. And this is according to Gallup. So there has been an 11 percentage point decline in the share of young adults who drink ‘regularly’ over the passage of essentially a generation.”
Gordon said Houston is a good metric for what is happening with breweries across Texas.
“I got some really fascinating data from the Texas Craft Brewery Guild,” she said. “(They wanted to) see whether we were seeing more closures versus openings in urban spaces than we were in suburban or rural places.
In urban places, they found that, in 2024, there were six breweries that opened in urban places across Texas. In the same year, 13 closed. So for every one that opened, a little more than two closed. And so it is the urban segment of our economy that’s really driving the flipping of the switch.”
Despite this trend, Gordon said she doesn’t expect craft breweries to go the way of other hyped-up businesses and disappear entirely.
“One of the things I wanted to examine in this story is, was this a bubble, right? Was this equivalent to, remember all the ‘froyo’ shops that were around in 2010? Was this just like the 2016 version of a froyo shop and it just had its moment and you’re never gonna see it again?” she said. “And I don’t think that’s what it is…
There’s a market correction. Not every single one can survive, but it’s not gonna be like it’s like now to drive around and look for a froyo spot. You’re still gonna be able to find breweries. They’re still going to exist. They’re just not going to be two on a block.”
