As the U.S. brewing industry inches closer to a record 7,000 craft beer companies in operation, hundreds of distressed breweries are expected to close in 2019 and many of those failed enterprises will turn to asset auctions as a way to pay off debt, Brewbound reported. Brewers Association chief economist Bart Watson said that he anticipates as many as 300 brewery closures by the end of 2018. According to Watson, he expects the gap between openings and closings to shrink over time, and there could be as many as 500 closures in the next couple of years. However, the increasing number of closures is “still shockingly low” given the number of breweries in operation and the increasingly competitive environment, he said. Jack O’Connor, an associate who specializes in reorganizations for Sugar Felsenthal Grais & Helsinger LLP, said that while there has been an uptick in distressed activity in the beer space this year, there has not “an explosion.” According to O’Connor, this is a sign of a more mature marketplace.
