Is the Party Over? An Honest Dive into North Carolina’s Craft Beer Slowdown

A few years ago, I couldn’t walk through downtown Raleigh without accidentally wandering into a bustling taproom. Today? Some of my favorite spots have shuttered their doors. Is it me, or is everyone drinking less beer these days? With North Carolina long boasting the title of a craft beer hotspot, the sudden wave of closures and industry stories—complete with layoffs and slower taps—has me asking: Did we wake up from our craft beer dream, or is something bigger at play? Let’s crack open the can and see what’s really inside.Downsizing Dreams: Why Are North Carolina Craft Breweries Closing?It feels like just yesterday North Carolina was the darling of the craft beer world. Breweries were popping up on every corner, and every weekend brought a new taproom to try. But lately, the buzz has faded. Instead of grand openings, we’re hearing about closures, layoffs, and a sense of uncertainty. So, what’s really going on with North Carolina’s craft beer scene?The Numbers: More Closures Than OpeningsLet’s start with the facts. In 2024, North Carolina saw a net decrease of one brewery: 25 closed, and only 24 opened. On the surface, that might not sound like a huge shift, but it’s a big deal in an industry that’s been growing for over a decade. For years, the number of breweries only went up. Now, for the first time, we’re seeing that trend reverse—even if just by a small margin.Layoffs and Lost LegendsIt’s not just about the numbers. The closures have hit home, especially in places like Charlotte and Raleigh. Some well-known breweries—spots that felt like community hubs—have shut their doors. Layoffs have become more common, and the ripple effect is being felt by bartenders, brewers, and everyone in between. I’ve heard from friends who suddenly found themselves job hunting after years in the industry. It’s tough to watch.Rising Costs: The Silent KillerIf you ask brewery owners what’s keeping them up at night, most will mention costs. Everything is more expensive these days—ingredients, equipment, rent, even the cardboard for packaging. Tariffs and inflation have driven up prices across the board. For small breweries, these extra costs eat into already thin profit margins. Unlike big beer companies, they can’t always buy in bulk or absorb the hits.Ingredients: Hops and malt prices are up, and specialty ingredients are even harder to source affordably.Utilities: Energy bills for brewing and refrigeration have soared.Distribution: Getting beer to market is pricier, especially with rising fuel costs.Crowded Markets and Changing TastesThere’s also the problem of standing out. With so many breweries, it’s harder than ever to grab attention. The market is crowded, and customers have endless options. Some people are drinking less beer, or choosing other beverages like hard seltzer, cocktails, or non-alcoholic options. It’s not that North Carolina has fallen out of love with craft beer, but the honeymoon phase might be over.“We’re not just competing with other breweries anymore,” one Raleigh brewer told me. “We’re competing with every drink on the shelf.”All these factors—shrinking margins, fierce competition, and shifting consumer habits—are forcing breweries to make tough decisions. Some are scaling back. Others are closing for good. The dream isn’t dead, but it’s definitely downsizing.NC Beer Distribution: Rules Catered For The DistributorsIf you’ve ever wondered why your favorite North Carolina craft beer suddenly disappears from shelves or taps, the answer often lies in the state’s distribution laws. Getting your product distributed in NC isn’t just about brewing a great beer and finding a willing partner—it’s about navigating a maze of rules that, frankly, seem designed to favor distributors over the small breweries fueling our local beer scene.What It Really Means to Get Your Product DistributedIn North Carolina, once a brewery reaches a certain size (25,000 barrels per year), they’re legally required to work with a distributor to get their beer into bars, restaurants, and retail stores. This “three-tier system” was originally meant to prevent monopolies and ensure fair competition. But in reality, it often means that small breweries lose control over how and where their beer is sold.Signing with a distributor is a big deal. It’s not just a handshake and a promise to move some kegs. It’s a binding contract, and once you’re in, getting out isn’t easy. Distributors can choose which brands to push, and if your beer isn’t a priority for them, it can sit in a warehouse or get lost in a crowded portfolio. Meanwhile, you’re locked out of selling directly to accounts in that territory.When Your Distributor Isn’t Selling Your BeerThis is where things get really frustrating for small breweries. Let’s say you sign with a distributor, but they don’t actively sell your beer. Maybe they’re focused on bigger brands, or maybe your style doesn’t fit their current lineup. Either way, your beer isn’t getting to customers, and you can’t legally sell it yourself in that market. You’re stuck.“It feels like we’re trapped,” one local brewer told me. “We want to grow, but the system just puts up more roadblocks.”It’s not just about lost sales—it’s about lost relationships, lost momentum, and sometimes, lost businesses.Too Much Regulation, Poorly Written LawsNorth Carolina’s beer laws are notoriously complex. There are rules about how much you can self-distribute, how you can market your beer, and what happens if you want to change distributors. Many of these laws were written decades ago, long before the craft beer boom. They simply haven’t kept up with the times, and small breweries are paying the price.Self-distribution limits: Breweries can only self-distribute up to 25,000 barrels per year. After that, they must use a distributor.Franchise laws: Once you sign with a distributor, it’s almost impossible to leave without a lengthy legal battle or costly buyout.Market lockout: If your distributor isn’t moving your product, you can’t just switch or sell it yourself in that area.Getting Out of a Bad Distribution ContractSo, what does it take to get out of a bad distribution contract in North Carolina? In short: a lot. The state’s franchise laws heavily favor distributors. Breweries must prove “good cause” to terminate a contract, which is a high bar. Even then, the process can drag on for months or years, draining resources and morale.For many small breweries, these rules feel like a straitjacket—one that’s squeezing the life out of North Carolina’s once-thriving craft beer scene.Retail Space Declining: With THC And NA Beer There Are Even Fewer ChoicesWalking down the beer aisle at my local grocery store, I can’t help but notice how much it’s changed in just a few years. It used to be packed with craft options from all over North Carolina—now, it feels like there are fewer choices than ever. And it’s not just my imagination. Retail space for craft beer is shrinking, and the competition for those precious shelves is fiercer than ever, especially with new players like THC-infused drinks and non-alcoholic (NA) beers muscling in.Big Chains, Big Distributors, Small ChancesOne of the biggest challenges for local breweries is that most grocery store chains don’t actually pick what goes on their shelves. Instead, they let large distributors make those decisions. These distributors have contracts with the big national brands, and they’re the gatekeepers for what gets seen by shoppers. If you’re a small brewery, you’re not just fighting other local breweries for attention—you’re up against the giants who already have a lock on shelf space.Distributors call the shots: They decide which beers get prime placement, and it’s usually the brands they already have deals with.Limited slots: There are only so many spots in the cooler, and with THC seltzers and NA beers taking up more room, there’s even less space for traditional craft brews.National brands dominate: The big names get the best shelf space, while smaller brands are often pushed to the bottom or left out entirely.Jumping Through Hoops for RetailersIt’s not just about getting your beer into the store. Breweries have to jump through a lot of hoops to satisfy retailers—everything from special packaging to running in-store promotions. But here’s the kicker: even after all that effort, retailers often do little to actually promote these products. If you’re not a household name, your beer might just sit there, unnoticed, while the store pushes whatever’s on sale that week.“We spend so much time and money getting our beer into stores, but unless you’re a big brand, it feels like nobody even knows it’s there,” one NC brewer told me.THC and NA Beers: New Competition for Shelf SpaceThe rise of THC-infused beverages and non-alcoholic beers is another curveball. These products are trendy, and retailers want to cash in. That means even less space for traditional craft beer. I’ve seen entire endcaps dedicated to NA beers or cannabis seltzers—space that used to go to local IPAs or stouts. For a small brewery, this is just one more hurdle in an already tough market.THC drinks: Legal in some forms, these are hot sellers and get prime placement.NA beers: With more people cutting back on alcohol, these are flying off shelves.Craft beer squeezed out: There’s simply not enough room for everyone.When you add it all up, it’s no wonder so many North Carolina breweries are struggling. The fight for retail space is real, and with every new trend, the squeeze just gets tighter.Money Matters: The Economy’s Ripple Through Every PintLet’s be honest: it’s hard to ignore the price tag on your favorite pint these days. As someone who’s watched North Carolina’s craft beer scene grow from a handful of passionate brewers to a statewide phenomenon, I can tell you—money is at the heart of the current slowdown. It’s not that folks here have suddenly lost their taste for a cold IPA or a tart saison. Instead, the economy is flexing its muscles, and the effects are rippling through every glass poured.First, let’s talk about the obvious: prices are up. And not just a little. From the barley fields to the taproom, costs have climbed. Tariffs on imported ingredients, hikes in the price of hops and grain, and good old-fashioned inflation are all squeezing margins. Breweries are paying more for everything—cans, labels, utilities, and even the gas to deliver kegs across the state. When you add it all up, that extra dollar or two on your tab isn’t just padding someone’s profits; it’s often the difference between keeping the lights on or closing the doors.This financial squeeze has forced breweries to rethink how they operate. I’ve talked to owners who’ve had to shrink their menus, focusing on core beers instead of experimental one-offs. Others are producing smaller batches or shifting to contract brewing to cut overhead. Staff sizes are shrinking, too. Layoffs and reduced hours are becoming more common, even at breweries that were hiring just a year or two ago. The taproom, once the heart of the craft beer experience, has become a battleground for survival—every event, trivia night, and food truck partnership is a chance to bring in just enough business to make rent.But the impact doesn’t stop at the brewery door. The economic ripples spread far and wide. Local farmers who supply grain and fruit to breweries are feeling the pinch as orders drop. Distributors, who rely on a steady stream of new releases, are seeing their portfolios shrink. Even the communities that have built vibrant scenes around brewery tourism are noticing fewer visitors, which means less business for restaurants, hotels, and shops nearby. It’s a domino effect, and every piece matters.So, is North Carolina falling out of love with craft beer? I don’t think so. If anything, the passion is still there—but the reality is that money matters, now more than ever. The slowdown isn’t just about shifting tastes or a sudden rejection of alcohol. It’s about an economic storm that’s testing the resilience of an industry built on creativity, community, and a love for good beer. Whether the party is truly over remains to be seen, but one thing’s for sure: every pint poured in North Carolina today carries the weight of a much bigger story.TL;DR: North Carolina’s craft beer bust isn’t just about taste—a tangled mix of shifting preferences, economic headwinds, and industry shakeups is behind the slowdown. Whether you’re team IPA or team iced tea, big changes are afoot.