The annual data dump from the Brewers Association painted a rosy picture of a craft brewing industry that continues to defy gravity in a flat market.

The top line: U.S. craft breweries enjoyed a 5 percent uptick in production in 2017. At 8 percent, sales growth outpaced production growth. But the broader beer market — of which craft now enjoys a 12.7 percent share — was down 1 percent for the year to 196.3 million barrels.

“We’ve seen production growth decelerate a little bit, but we haven’t seen brewery openings slow down at all,” says Bart Watson, chief economist at the Brewers Association, the Boulder, Colorado-based nonprofit that supports small and independent American breweries.

An astounding 6,266 craft breweries operated for part or all of the year in the U.S. in 2017, up 159 percent from 2,420 in 2012. Most of the new entrants have a “small, locally focused business model,” says Watson.

Back then, craft production was 13.2 million barrels for the year. That number increased to 25.4 million in 2017. That’s a healthy 94 percent increase in five years, sure, but it also means that four breweries now share the same amount of growth that three did in 2012. “Per-brewer growth rates are going down,” says Watson.

That’s a bigger problem for regional breweries brewing 15,000 barrels or more annually than it is for the new breed of neighborhood-centric nanobreweries. “Regionals are much larger,” says Watson. “They’re built to scale.”

They also have the double whammy of trying to claw more share from AB InBev and the macro-breweries as the horde of small breweries continues to mushroom. Within this more crowded market, there’s a parallel move towards higher-priced product. “We’re seeing a lot of beer companies trade volume for sales, he adds. The trend even applies to the big brewers: “They’re trading $24 cases for $36 cases.”

With somewhere around 400 breweries — the state-by-state numbers won’t be released until the 2018 Craft Brewers Conference in Nashville in late April — Colorado offers the rest of the country a glimpse of the future. “It’s harder to grow because it’s so much more developed,” notes Watson, pointing to the “long tail” of growth in smaller breweries with an on-premise focus. “Some of that is just an effect of where growth is going forward.”

Extrapolating with the 2017 growth rates for five more years, the U.S. might just have more than 16,000 breweries producing nearly 50 million gallons in 2022. That would give craft more than a quarter of the market.

Is that kind of forecast irrationally exuberant? Is there a ceiling for craft beer or is there a peak on the horizon? In 2017, 165 craft breweries closed, an all-time high, but same goes for the nearly 1,000 openings.

Watson says previous iterations of the beer market have seen higher-priced segments, a group that also includes imports and premium brands from the big breweries, combining to peak around 60 percent of the market by volume. As of 2018, that number is closer to 40 percent.

That means that craft beer could feasibly double in market share “in a decade or two,” says Watson, and that kind of room for growth suggests that the wave won’t crash anytime soon.

Eric Peterson is editor of BreweryWeek and CompanyWeek. Reach him at