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After years of explosive growth, Colorado craft beer is setting into a new phase. Rising costs, changing drinking habits and slowing demand are forcing familiar taprooms to shutter, signaling a sobering shift for the industry.

In 2025, more than 40 breweries, taprooms and brewpubs closed, pushing total closures since 2020 past 140. The losses hit hard, but industry experts see it as a reset rather than a collapse. With more than 400 breweries still operating, they say Colorado’s craft market has entered a more mature phase where success depends less on expansion and more on connection.

“The craft beer industry grew so fast that supply outpaced demand,” said��Jeff York, a professor of entrepreneurship at С���� Boulder’s��Leeds School of Business and co-host of the podcast��“.” “That created a perfect storm for some breweries to fail.”

“They can’t just open more locations or chase every trend anymore,” York said. “The ones that endure focus on their taprooms, connect with their local communities and stay true to their brand.”

Jeff York

Two Front Range breweries illustrate how that strategy plays out in different ways: Holidaily Brewing Company in Golden and Liquid Mechanics Brewing Company in Lafayette.

Growth slows

Beer sales in Colorado fell about 6% in 2025, a bit more than the national decline. Health-conscious trends and the rise of the “sober curious” movement have nudged many drinkers toward smaller pours or away from alcohol altogether.

Liquid Mechanics takes that reality in stride.

“Flat is kind of the new growth,” said CEO and co-founder Davin Helden. “Sales dipped a bit last year, while many other breweries saw much bigger declines. So in a way, flat feels like winning.”

Helden, a С���� Boulder biochemistry graduate with an MBA from the Leeds School of Business, started Liquid Mechanics in 2014 with two fellow biotech professionals. He’s upfront about where the business actually makes money.

“Our tasting room has always been the main focus,” he said. “There’s very little profit in cans; we might make a dollar on a four-pack. Our goal is to get people into the tasting room.”

Brewing connections

On an unseasonably warm February afternoon, Liquid Mechanics’ taproom hummed with activity: Bar stools were full, patio tables were occupied, and dogs lounged beneath them.

“It’s the same people coming in, at the same frequency. But they're drinking less,” Helden said.��

That change shows up across the industry: People may be drinking craft beer a bit less often, but more than ever are trying it at least occasionally, according to the Brewers Association.

Packaged beer keeps a brand visible, but the margins can be thin given the rising cost of materials. For some breweries, taprooms are a primary source of profit. For others, they’re a way to build relationships, even if distribution drives the bigger picture.

“The profit is in pulling pints,” Helden says. “Distribution reminds people we exist. But the taproom is where the relationship is built.”

At Liquid Mechanics, community is part of the business model. It makes collaboration beers with other breweries, enters competitions that build recognition, and hosts fundraisers for local nonprofits. Inside the taproom, trivia nights and a mug club that requires repeat visits before joining help turn customers into regulars.

“By the time someone’s in the club, we're going to know your name, and chances are good we’ll have the beer you like to drink already poured before you sit down,” Helden said.

Connection over expansion

Holidaily Brewing faces similar market pressures but takes a slightly different approach. The taproom is for connection and brand experience, while the brewery’s main growth engine is distribution. Founded in 2016 by Karen Hertz, the brewery specializes in gluten-free beer brewed with millet and buckwheat instead of barley and wheat.

“When people hear ‘gluten-free,’ they assume it’s a tiny market,” said Hertz, a С���� Boulder alumna with an MBA from С���� Denver. “Celiac affects about 1%. But many more people are cutting gluten.”

Holidaily’s appeal stretches beyond dietary restrictions. Its bright, playful “make every day a holiday” branding celebrates fun and community as much as what’s in the glass.

For many customers, that mix is more than novelty.

“Some people have never been able to walk into a taproom and order anything on the menu,” Hertz said. “Sometimes you see it on their face. It’s social freedom. That emotional connection is powerful.”

In Golden, Holidaily’s taproom serves as the heart of the brand, drawing a mix of regulars and newcomers, dogs included, who come to talk, sample and make an afternoon of it. The brewery operated a second taproom in Greenwood Village from 2021 to 2024, an experience Hertz said helped clarify priorities. Managing multiple locations added complexity and ultimately reinforced the decision to refocus on Golden.

The taproom is central to connecting with customers, Hertz said, while the company’s long-term focus stays on distribution. “I started the company to get great beer to people with dietary restrictions who otherwise might not be able to share a beer with friends,” she said. “That’s where we’re choosing to invest our time, energy and resources.”

Changing tastes

For both Holidaily and Liquid Mechanics, adapting to changing tastes doesn’t mean chasing every trend. Holidaily uses sales data to fine-tune its lineup, adding fruited versions of its best-selling blonde ale to expand its appeal without overhauling the brand.��

Liquid Mechanics experiments with new styles selectively, brewing only what aligns with its focus and meets its standards, while supplementing the lineup with offerings like seltzers and nonalcoholic beers from other producers.

For both breweries, the focus is on connections and experiences, not just growth. Turning breweries into community hubs instead of growth machines is what experts, including York, see as Colorado craft beer’s next chapter.

“Focusing on taproom business is a good way for a brewery to weather this storm,” York said. “Also, staying true and authentic to your brand—that is what the people that are still drinking craft beer are going to value.”