Beer has been the alcoholic beverage of choice among U.S. drinkers every year since 1992, except in 2005 when wine surpassed beer, with 39% of drinkers preferring wine, 36% choosing beer, and only 21 naming liquor as their preference, according to a Gallup poll.
That data should be good news for the craft beer industry, but it has instead faced a craft beer apocalypse over the last two years.
Olfactory Brewing victim of downturn
San Francisco’s Olfactory Brewing has become one of the victims of the craft beer downturn.
Alcohol consumption in the U.S., unfortunately, hit a record low in 2025, according to the Gallup poll, with only 54% of Americans reporting that they drink alcohol. Consumption had fallen from 62% of adults in 2023 to 58% in 2024, before falling to a record low last year.
Falling consumption rates have been a major problem for craft breweries in the last two years, leading to brewery closures and bankruptcies.
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Olfactory Brewing files Chapter 7
Award-winning craft beer brand Olfactory Brewing filed for Chapter 7 bankruptcy liquidation after closing its San Francisco brewery in December and Berkeley, Calif., taproom in February.
The craft brewery parent, Olfactory Inc., filed its petition in the U.S. Bankruptcy Court for the Northern District of California on March 4, listing up to $100,000 in assets and $100,000 to $1 million in liabilities in its petition, according to Bankruptcy Observer.
Olfactory Brewing’s brewhouse opened in San Francisco’s Dogpatch neighborhood, about nine blocks from the San Francisco Giants’ stadium, in November 2022 and expanded in 2024 with the opening of a Berkeley taproom.
Olfactory Brewing won a gold medal
The craft brewery achieved industry success quickly, as its Proverbial Fork beer won a gold medal in the Great American Beer Festival‘s Mixed-Culture Brett Beer category in 2024.
Unsustainable costs, however, forced the craft brewery to shut down both locations, according to social media posts.
Among the high costs of doing business were the increased prices of ingredients and materials that grew with inflation.
“Raw material costs have emerged as a significant constraint in the North American craft beer market, with substantial increases in the prices of essential ingredients,” according to a 2026 North American Craft Beer Market Report by Mordor Intelligence.
“The impact of these cost increases has been particularly severe on production economics, forcing breweries to revise their pricing strategies and operational models,” the report said.
Brewer had unsustainable costs
“Friends…Olfactory Dogpatch is faced with unsustainable operating costs. We have failed to negotiate a path forward and we are now out of options,” the brewery posted on Facebook on Dec. 11.
“We sadly share that Sunday (December) 14th will be our last in Dogpatch,” the message said. “Please come down this weekend and have a beer with Phil. There will be a lot of sad cowboy tunes. Thank you for supporting this small dream.”
On its final day in San Francisco in December, the brewery reminded customers that its Berkeley location was still operating at the time.
“Also, because many have asked, Olfactory Berkeley will still be open past today. So, it’s not goodbye forever. But it’s so long honey babe Dogpatch. And we bid you goodnight, goodnight, goodnight,” the message said.
Unfortunately, it would become goodbye forever about two months later.
Craft brewery closes its last location
The Berkeley location closed a day or so before Feb. 26, 2026, according to Berkeley Eats, which was the first to report the closing of the East Bay location. The craft brewery’s website has been disabled, though some Facebook posts from the San Francisco operation remain.
The plummeting alcohol consumption rate is a major concern for the beer industry, as well as the wine and liquor sectors.
The previous low level of adult alcohol drinkers had been a one-time low of 55% in 1955. The highest percentage of adult alcohol consumption in the U.S. was 71% of adults, which was recorded over three straight years from 1976 through 1978, according to Gallup.
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