A Popular North Carolina Brewery Just Filed For Bankruptcy And The Reason Couldn't Be Clearer

As if 2025 could be filled with any more bankruptcy news, North Carolina brewery favorite, Cotton House Craft Brewers, officially filed for bankruptcy protection in early April. In an April 9, 2025 post on the company's Facebook page, the brand discussed its previous expansion plans and seemingly bright future, "As many of you know, we embarked on an exciting journey with the launch of Triangle Beer Co. and Craft Concepts Kitchen. This expansion [...] included a promising new partnership and the acquisition of Tony's Oyster Bar to support our rapidly growing catering business." However, these expansion plans seem to have ultimately been the brewery's undoing.

Cotton House went on to explain that "as often happens in the world of small businesses, the path was not without its obstacles. The partnership we hoped would flourish took a different direction, and over the past two years, we have faced significant financial strains as a result." The company said it hopes to restructure as a way of staying alive. According to Cotton House's bankruptcy filing, the brewery reported assets in the range of $100,001 to $1 million with liabilities between $1 million and $10 million. With that said, fans of the brewery might be excited to hear that it is continuing to serve beer at its downtown Cary, North Carolina location.

While the amount that the average American spends on alcohol each year might surprise you, it's worth mentioning that Cotton House is by no means alone when it comes to its financial strain. According to 2024 U.S. Craft Brewing Industry Figures data, released by the Brewer's Association in early April 2025, the entire craft brewing industry is experiencing significant decline. In 2024, brewers produced just 23.1 million barrels of beer, representing a 4% decrease from 2023 numbers. Similarly, the volume of the overall U.S. beer market declined by 1.2%, while craft beer's market share remained flat. It's also worth noting that this was the industry's third consecutive year of negative growth, which does not bode well for small breweries like Cotton House trying to financially hang on.

To add to this, the 2024 report also included another troubling detail — the amount of independently owned craft breweries operating in the U.S. decreased for the first time in 20 years. In fact, 2024 saw 501 brewery closures compared to just 434 openings. For those curious, the craft brewing industry — which includes independently owned microbreweries, brewpubs, taprooms, and regional breweries — accounted for about 25% of total retail beer sales in the U.S. in 2024. As for the rest of beer's market share, even behemoth corporate beer makers like Anheuser-Busch and Molson Coors, have similarly experienced declines in their overall production volume as well as declines in their profit estimates.

While breweries like Cotton House will ultimately have bankruptcy court deciding their fate, the rest of the craft beer, and even the larger alcoholic beverage, industry is facing significant challenges moving forward. The growth of damp and even dry drinking trends among consumers only continues to gain popularity. Made most popular through the celebration of something known as Dry January, increasing amounts of consumers — largely driven by younger generations — are choosing to pursue nonalcoholic alternatives to their once-favorite beverages. In fact, according to 2023 data from Gallup, just 62% of adults under the age of 35 reported that they drink compared to 72% of that population that reported the same in 2003. As shifting health priorities continue to impact consumer spending habits when it comes to beer, wine, and spirits the entire alcohol industry is sure to face significant financial hurdles.

Another consideration for the industry is how the Trump administration's tariffs will ultimately affect small businesses, like craft breweries. For the beer industry specifically, Trump's 25% across the board tariff on both steel and aluminum — materials necessary for brewing equipment — can and will severely impact the financial health of small breweries operating on narrow margins. Similarly, beer-specific items like kegs and aluminum cans will be impacted. Also, necessary brewing ingredients like hops, malt, and grain could end up in the crossfire of Trump's tariffs, since much of these ingredients are imported. All of this combines to cost craft breweries significantly more to brew a single pint of beer.