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Beer Industry Update, 2008
Lester Jones, Beer InstituteJune, 2009
Beer Serves America
The Beer Serves America (BSA) study is the industry’s primary communication platform describing the breadth and economic contributions of the beer industry to the public and government .
Throughout the year, the Beer Institute, its members, and allied organizations use the Beer Serves America (BSA) message in communications to the media, government, special interest groups and the general public.
BSA Study Summary The brewing industry is a dynamic part of the U.S. economy,
accounting for $198.2 billion in economic output or 1.5% of US GDP. Industry directly or indirectly employ almost 1.9 million
Americans Employees earn almost $62 billion in wages and benefits The industry and their employees pay $30.1 billion in
direct federal, state and local taxes In addition, the consumption of beer generates $3.7 billion
in federal excise taxes, 1.7 billion in state excise taxes and another $5.7 billion in sales and other related state taxes
The Hops Industry alone contributes over 2,500 jobs, $90 million in wages and almost $300 million in economic output to the US economy
Every state and virtually every community in the country contributes to the brewing industry in some way.
Beer’s Economic Contributions(2,083 Brewery, 2,869 Wholesalers and 521,725 Retailers)
United StatesUnited States JobsJobsContributions Contributions
(billions $)(billions $)
BreweryBrewery 42,947 42,947 $35.1$35.1
WholesaleWholesale 95,399 95,399 $16.0$16.0
RetailRetail 888,433 888,433 $35.0$35.0
Supplier ImpactSupplier Impact 441,319 441,319 $66.9$66.9
Induced ImpactInduced Impact 417,077 417,077 $45.2$45.2
Total Jobs/ContributionTotal Jobs/Contribution 1,885,1751,885,175 $198.2$198.2
Business and Personal TaxesBusiness and Personal Taxes $30.2$30.2
Consumption Taxes (excise, Consumption Taxes (excise, sales, others)sales, others) $11.2$11.2
Source: Beer Serves America, 2009
5
Gallup Poll, 2009
Source: Gallup Poll, 2008: Source: Gallup Poll, 2008: Do you most often drink beer, wine, or liquorDo you most often drink beer, wine, or liquor? ?
40% Beer
34% Wine
Beer, still the largest segment2008 US Market2008 US Market BeerBeer WineWine SpiritsSpiritsTotal Sales Total Sales (million)(million) $99,345 $99,345 $27,215 $27,215 $61,120 $61,120
Total Volume Total Volume (million)(million) 6,6276,627 705705 441441
21+ Pop 2008 21+ Pop 2008 (million)(million) 218218 218218 218218
Per Capita SalesPer Capita Sales $456 $456 $125 $125 $280 $280 Per Capita Per Capita GallonsGallons 30.4 30.4 3.2 3.2 2.0 2.0
Per Capita Per Capita EthanolEthanol 1.4 1.4 0.5 0.5 0.8 0.8
Source: Beer Institute and Adams Beverage Group, 2009
Total Total USUS
20072007
Retail Retail SalesSales
20082008
Retail Retail SalesSales
07-08 07-08 ChangChang
ee
BeerBeer $97.9$97.9 $99.3$99.3 1.4%1.4%
WineWine $27.9$27.9 $27.2$27.2 -2.5%-2.5%
SpiritsSpirits $61.6$61.6 $62.9$62.9 2.2%2.2%
TotalTotal $187.3$187.3 $189.5$189.5 1.1%1.1%
Adams Beverage Books, 2009
US Beer, Spirits and Wine, 2007 vs. 2008Retail Sales Trends (Billions $)
Index Per Capita Ethanol Consumption Beer Wine and Spirits 1970-2008
Assume 4.5% for beer, 14% for wine and 40% for spirits
Segment 1970 1998 2008 Beer 48%57% 52% Wine10% 15% 17%
Spirits 42% 28% 31%
Source: Beer Institute and The Beverage Information Group 2009
Share of Ethanol volume
Per Capita Consumption of Malt Beverages1980 to 2008 (gallons per person/total population)
Source: Beer Institute, 2009.
1. 21.8 in 2008 from a high of 24.6 in 1981
2. Changing Demographics
3. Increased alcohol beverage competition
4. Additional non-alcohol beverage choices
5. Policy Changes (21 LDA and .08)
US Population 2008, Ages 21 to 75 Tail end of the baby boom Tail end of the baby boom
generation born between generation born between 1957 and 1964 - about 1957 and 1964 - about
32 million people or 32 million people or 16.2% of the LDA 16.2% of the LDA
populationpopulation
Beer demo (21-27) - about 29.4 Beer demo (21-27) - about 29.4 million people or 14.9% of million people or 14.9% of
LDA PopulationLDA Population
Difference of 2.5 Difference of 2.5 million consumers at million consumers at 20 gallons/year per 20 gallons/year per capita…equates to capita…equates to about 1.6 million about 1.6 million barrels less demand…barrels less demand…beer has weathered beer has weathered the storm with 28-34 the storm with 28-34 yr old age cohort yr old age cohort (13.9% of LDA).(13.9% of LDA).
Source: United States Census Bureau, 2009
40.0 >
30.0 ≤ 34.9
Source: Beer Institute, 2009 (2006 Beer Institute Population Estimates)
≤ 29.9
35.0≤ 39.9
2008 est. Annual Per Cap Consumption Gallons per person 21+
US Brewing Cost Index The Brewing cost index measures a select few
commodity input costs used by the US brewing industry Weighted average index accounts for agricultural,
energy and packaging inputs based on data collected through the Economic Census for the industry
Component Weight 07 vs. 08
PPI - Producer Price Index for Commodities
9.9%
Packaging (cans, bottles, boxes) 60% 3.6%
Agricultural (barley, rice, corn, wheat)
30% 26.1%
Energy (commercial electric and natural gas)
10% -3.0%
Brewing Cost Index 11.2%Source: Beer Institute and BLS PPI (Note: Hops are not measured in the PPI
commodity index)
US PPI & US Brewing Cost Index
The commodity costs index measure only a select few inputs. The index does not include many other P&L items
such as marketing, administration, transportation and labor/benefit costs . The components of the brewing index demonstrate the energy and agricultural intensity of the
brewing process relative to the general economy.
Source: Beer Institute and BLS PPI (Note: Hops are not measured in the PPI commodity index)
Industry Supply and Shipments of Malt Beverages
Two measures: Supply and State Shipments
Supply = Domestic Tax Paid + Imports
Shipments = Sum of all beer shipped from brewers and importers to distributors by state
1 barrel = 31 gallons = 13.78 cases = 330/12 oz servings
World and US Brewing Industry Based on 2007/2008 volumes estimates
Brewer World Share
USShare
ABI 26% 50%
MILLER/COORS 17% 30%
HEINEKEN 10% 4%
Top 3 Share 51% 81%
Total (barrels) 1.4 Billion
214 million
• Top 3 brewers now produce over 50% of world’s beer and 81% of US market
• The 70-80% share is the norm in most other developed countries as well.
18Source: Beer Institute, 2009.
Crown Imports now has 5.4% share of US market and Pabst 2.6% share
of US market
2008 US Market Shares for Brewers (Based on shipments from brewers to wholesalers,2008)
Source: Beer Institute, 2009.
Segment
2007Volum
e
2008Volum
e2008Share
Volume
Change
Percent
Change
Domestic 182,687184,655 87% 1,968 1.1%
Imports 29,695 28,700 13% -995 -3.4%
Total Industry 212,382213,355 100% 973 0.5%
Total Malt Beverage Industry Supply2007 vs. 2008 (millions of barrels)
Source: Beer Institute, 2009
Total Industry added almost 1 million barrels of beer in 2008. That’s almost 13 million cases of additional beer passing from
brewers to distributors to retailers to help satisfy over 90 million beer consumers.
US Package Mix (Bottles, Cans, Draft)2007 vs. 2008 (1,000s of barrels)
Package2007
Volume 2008
Volume 2008 Share
Volume Change
Percent Change
Bottles 88,486 87,085 40.9% -1,401 -1.6%
Cans 102,676 105,158 49.3% 2,482 2.4%
Draught 20,040 20,201 9.5% 161 0.8%
Plastics 683 692 0.3% 10 1.4%
Total 211,905 213,136 100.0% -995 0.6%
Cans and draught beer lead industry growth in 2008 as bottles pulled the industry down by -1.6%. Draught
continued to grow in 2008 reaching 9.5% share of market for over 5 billion 12 ounce servings.
Source: US Dept of Commerce, Bureau of Census and Beer Institute, 2009
