The American craft beer industry faces a challenging road ahead as new tariffs on steel and aluminum threaten to increase production costs significantly. Scheduled to take effect on March 12, these tariffs are expected to raise producer prices by 15% to 20% in the coming months. This development could severely impact craft breweries, especially the smaller establishments that already struggle with narrow profit margins.
Canned beer, which accounts for more than 60% of packaged beer sales for guild members, is particularly vulnerable. In early 2025, sales data showed that beer in aluminum cans made up approximately 75% of craft breweries' packaged volume and revenue. The dependency on aluminum cans has grown since the pandemic, which shifted consumer behavior towards to-go vessels amid taproom closures. Canada, one of the largest suppliers of aluminum for these cans, plays a critical role in the supply chain.
However, the upcoming tariffs pose a significant challenge. Jason Klein, a craft brewer, explained the difficulty of sourcing domestically:
“Buying American is challenging for us; we tried that, but we were too small to buy from the big American manufacturer,” – Jason Klein
Many breweries have had to rely on Canadian aluminum, which will now be subject to price hikes. Klein noted:
“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.” – Jason Klein
The once-flourishing craft beer industry has faced multiple challenges in recent years. In 2024, more craft breweries closed than opened for the first time in nearly two decades. Global supply chain issues have compounded these struggles, leading to shortages and drastic price hikes of key inputs like cans. The impending tariffs are expected to exacerbate these pressures by increasing the cost of critical materials used to brew, house, and serve beer.
Katie Stinchon, representing small breweries, highlighted their vulnerability:
“While all breweries will feel the impact, our smallest breweries will be hit the hardest,” – Katie Stinchon
“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.” – Katie Stinchon
“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.” – Katie Stinchon
Despite carve-outs exempting Canadian aluminum from previous tariffs in 2018, prices have continued to rise. The market is expected to adjust to these increases, potentially limiting their effect on inflation. However, a sustained 10% rise in steel prices and a 15% rise in aluminum costs could still burden consumers with an extra $8 billion yearly.
Caleb Hiliadis, another craft brewer, emphasized the importance of aluminum:
“It’s honestly been a tough couple of years for the small craft brewer in America,” – Caleb Hiliadis
“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.” – Caleb Hiliadis
Craft brewers are trying to brace themselves for this potentially higher-cost environment. The smallest breweries find themselves in a particularly precarious position as they lack the resources to mitigate rising costs effectively. Jason Klein likened this situation to:
“It’s a bit of a Tetris act,” – Jason Klein
Katie Marisic further warned about the repercussions:
“You’re not going to see that if the cost of these commodities continue to go up,” – Katie Marisic
