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					2008 Beer Industry Update: How
To Leverage Consumers’ Ever
Growing Interest in Beer

     Lester Jones, Beer Institute
     Cheers Beverage Conference
     January 20, 2009
The Beer Institute was organized in 1986 to
   represent the industry before Congress,
 state legislatures and public forums across
 the country. It is committed to developing
     sound public policy that focuses on
    community involvement and personal
                 responsibility
Beer Institute Membership
Brewers, Importers and Suppliers
 Senior Board               Ex Officio Board - Brewers
   ABInBev
                               Bell’s Brewing Co.
   Miller Coors               Boston Beer Co.
   Heineken USA               Boulevard Brewing Co.
   Crown Imports, LLC         Brooklyn Brewery Corp
 Supplier Members             Deschutes Brewery, Inc.
     Hop Growers              FEMSA

     Barley and Malt          FX Matt Brewing Co.

     Rice/Corn Growers        Harpoon Brewery

     Packaging Suppliers      New Belgium Brewing Co.

                               Sierra Nevada Brewing Co.
     Brewing Equipment
    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.
    2006 Study Summary
   The brewing industry is a dynamic part of the U.S. economy,
    accounting for about $189 billion in economic output or 1.5 percent
    of US Gross Domestic Product
     Brewers, distributors, and retailers directly or indirectly employ
       approximately 1.7 million Americans
     Employees earn over $54.9 billion in wages and benefits

     Members of the brewing industry and their employees pay $24.8
       billion in direct federal, state and local taxes
     In addition, the consumption of beer throughout the country
       generates $5.2 billion in federal and state excise taxes, and another
       $6.2 billion in state taxes.
   Every state and virtually every community in the country contributes
    to the brewing industry in some way.
  Industry Direct Economic Impact
                 Economic Impact of the Beer Industry
                    United States Total Impact, 2006
Sector                  Jobs             Wages             Output
Brewing                46,971         $4,075,490,985    $32,242,899,722
Wholesaling            90,970         $5,620,806,678    $14,957,098,416
Retail                 808,247       $15,330,717,593    $41,493,981,782
Total                  946,188       $ 25,027,015,256   $ 88,693,979,920

Establishments        Locations
                                         Total direct and indirect
Brewing                 2,074
                                       impact in the US includes 1.7
Wholesaling             2,750
                                        million jobs and $189 billion
Retail                 531,034
       Per Capita Consumption of Malt Beverages
       1980 to 2008 (gallons per person/total population)
                                        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)




Source: Beer Institute, 2009.
       Per Capita Consumption
       Beer Wine and Spirits 1970-2008




Source: Beer Institute and The Beverage Information Group 2009
       Index Per Capita Ethanol Consumption
        Beer Wine and Spirits 1970-2008
                                                                           Share of volume
                                                                 Segment   1970      1998    2008
                                                                 Beer      48%       62%     57%
                                                                 Wine      10%       11%     12%
                                                                 Spirits   42%       28%     31%




                          Assume 4.5% for beer, 14% for wine and 40% for spirits




Source: Beer Institute and The Beverage Information Group 2009
       US Population 2007, Ages 21 to 75
             Beer demo (21-27) - about 29.4 million   Tail end of the baby boom generation
                people or 14.9% of LDA Population            born between 1957 and 1964 -
                                                               about 32 million people or
                                                             16.2% of the LDA population

                                                                          Difference of 2.5 million
                                                                          consumers at 20 gallons/year
                                                                          per capita…equates to about
                                                                          1.6 million barrels less
                                                                          demand…beer has weathered
                                                                          the storm with 28-34 yr old age
                                                                          cohort (13.9% of LDA).




Source: United States Census Bureau, 2009
                      2008 Annual Per Cap Consumption
                                                   Gallons per person 21+




                 40.0 >
              35.0≤ 39.9
             30.0 ≤ 34.9
                 ≤ 29.9



Source: Beer Institute, 2009 (2006 Beer Institute Population Estimates)
       Top 10 Largest States, 2008
       21+ Per Capita Consumption (Gallons per LDA person)
                                                     2007         2008                 Per Cap.
        Rank State                                Shipments*   Shipments*   Growth   Consumption
            1       California                     719,340      728,711      1.3%       28.1
            2       Texas                          586,609      612,319      4.4%       36.8
            3       Florida                        437,140      423,961     -3.0%       30.5
            4       New York                       328,061      331,157      0.9%       23.3
            5       Pennsylvania                   279,983      286,082      2.2%       31.2
            6       Illinois                       285,501      285,190     -0.1%       31.0
            7       Ohio                           270,413      268,959     -0.5%       32.3
            8       Michigan                       202,387      203,755      0.7%       28.1
            9       North Carolina                 187,515      190,033      1.3%       29.1
           10       Georgia                        191,403      189,562     -1.0%       28.0
          US        Total                          6,577,624    6,619,630    0.6%        30.3


Source: Beer Institute, 2009 *1,000s of gallons
       Top 10 Per Capita Beer States, 2008
       21+ Per Capita Consumption (Gallons per LDA person)
                                                     2007         2008                Per Cap.
       Rank State                                 Shipments*   Shipments* Growth    Consumption
           1       North Dakota                    20,717       21,264       2.6%      46.0
           2       Montana                         30,073       30,993       3.1%      43.9
           3       New Hampshire                   42,001       41,638      -0.9%      42.2
           4       Nevada                          77,603       77,379      -0.3%      41.3
           5       South Dakota                    21,854       22,741       4.1%      40.3
           6       Louisiana                       119,660      120,057      0.3%      39.3
           7       Wyoming                         14,212       14,633       3.0%      38.3
           8       Wisconsin                       154,814      155,521      0.5%      38.1
           9       Nebraska                        45,640       46,679       2.3%      36.9
          10       Texas                           586,609      612,319      4.4%      36.8
          US       Total                           6,577,624    6,619,630   0.6%        30.3


Source: Beer Institute, 2009 *1,000s of gallons
       Top 10 Per Capita Beer States Growth, 2008
       21+ Per Capita Consumption (Gallons per LDA person)
                                                     2007         2008                 Per Cap.
       Rank State                                 Shipments*   Shipments*   Growth   Consumption
           1       Oklahoma                        75,066       79,063       5.3%       30.6
           2       Arkansas                        54,877       57,431       4.7%       28.1
           3       South Dakota                    21,854       22,741       4.1%       40.3
           4       Texas                           586,609      612,319      4.4%       36.8
           5       West Virginia                   43,156       44,208       2.4%       32.3
           6       Idaho                           31,722       32,922       3.8%       31.3
           7       Pennsylvania                    279,983      286,082      2.2%       31.2
           8       Montana                         30,073       30,993       3.1%       43.9
           9       North Dakota                    20,717       21,264       2.6%       46.0
          10       Iowa                            75,429         76,886     1.9%       35.6
          US       Total                           6,577,624    6,619,630    0.6%        30.3


Source: Beer Institute, 2009 *1,000s of gallons
Industry Supply of Malt
Beverages

    Domestic production and imports of malt
    beverages in the US
       Total Malt Beverage Industry
       2007 vs. 2008 est. (millions of gallons)

                                 2007       2008 est.     2008      Volume      Percent
      Segment                   Volume      Volume        Share     Change      Change
    Domestic                      5,664       5,726       86%          62         1.1%

    Imports                        921         895        14%          -25        -2.7%

    Total Industry                6,584       6,621       100%         37         0.6%


        Total Industry added over 37 million gallons of beer in 2008. That’s over 16.5
       million cases of beer for a gain of over 400 million 12 ounce equivalent servings.



Source: Beer Institute, 2009
      Domestic Malt Beverage Industry
      2007 vs. 2008est (millions of gallons)

                                                             2008       Volume      Percent
        Domestic Segment               2007     2008 est.    Share      Change      Change

        Packaged                       5,119      5,174      90.4%         55         1.1%

        Draught                        531         538        9.4%          6         1.2%

        Tax Determined*                13.5       13.8        0.2%          0         2.4%

        Total Industry                 5,664      5,726     100.00%        62         1.1%


  * Tax Paid on beer that is served directly from serving tanks in brewpubs and taverns
                 Small relative to total market but over 100 million 16 ounce servings.

Source: TTB and Beer Institute, 2009
       Imports of Malt Beverages
       1984-2008 (1,000s 31 Gallon Barrels)
                                                       Import volumes fell for first time since
                                                       1991 to 28.8 million barrels in 2008




                            Import share is holds at 14% of
                                    market in 2008




Source: US Dept of Commerce, Bureau of Census and Beer Institute, 2009
       Import Package Mix
       2007 vs. 2008 (1,000s of gallons)

                                                                         2008    Volume    Percent
         Package                   2007                   2008 est.      Share   Change    Change
          Bottles                710,299                   677,701       76%     -32,598   -4.6%

            Cans                 134,298                   137,139       15%     2,840      2.1%

         Draught                  75,938                    80,602       9%      4,664      6.1%

            Total                920,536                   895,442       100%    -25,094   -2.7%

                Import draft added 4.6 million gallons of high value on premise draft
                  for a 6.1% gain in 2008 (slow down from 11% growth in 2007).
                       That’s over 37 million additional 16 ounce draft pours in 2008!


Source: US Dept of Commerce, Bureau of Census and Beer Institute, 2009
       Imports of Draught Beer into the US
       1999 to 2008est (31 gallon barrels)

                                    Draught imports have grown 4.5% CAGR since
                                       1999 to reach 2.6 million barrels in 2008.




Source: US Dept of Commerce, Bureau of Census and Beer Institute, 2009
       European Draught Beer Volumes
       1998-2008 est. (31 gallon barrels)
                          70% of draught beer comes from Europe.
                           Draught beer volumes now stand at over
                                 1.7 million barrels in 2008.




Source: US Dept of Commerce, Bureau of Census and Beer Institute, 2009
       Latin American Draught Beer Volumes
       1998-2008 est. (31 gallon barrels)


                           Latin America draught beer volumes now
                             stand at over 200,000 barrels in 2008.




Source: US Dept of Commerce, Bureau of Census and Beer Institute, 2009
       Belgium Draught Beer Volumes
       1998-2008 est. (31 gallon barrels)

                             Belgium draught beer volumes now
                            stand at over 400,000 barrels in 2008.
                            Almost $100 million 16 ounce pours!




Source: US Dept of Commerce, Bureau of Census and Beer Institute, 2009
                         2008 est. Draught Share by State




             11% < share
             9% < share < 11%
             1% < share < 9%



Source: TTB and Beer Institute, 2009
       Draught Beer Share – On Premise Measure
       Draught Share of Market 1946 to 2008

                                       1. Draught share of market has fallen consistently from over a third
                                          of the market to less than 10% in 2008.
                                       2. But still significant, over 600 million gallons (domestic + imports)
                                          in 2008 and over 5 billion 16 ounce servings.
                                       3. There are over 29,000 miles of draught lines in the US




Source: TTB and Beer Institute, 2009
      Top 10 Draught Volume States
      Total Year 2007 vs. 2008 (31 Gallon Barrels)
                                                                              Volume    Percent
      Rank State                                      2008         2008       Change    Change
          1      California                         2,578,953    2,646,839    67,885     2.6%
          2      Texas                              1,043,231    1,082,003    38,773     3.7%
          3      Florida                             1,409,703   1,433,372    23,669     1.7%
          4      New York                           1,000,179    1,067,880    67,701     6.7%
          5      Pennsylvania                       1,492,866    1,551,636    58,770     3.9%
          6      Illinois                            925,504      923,284     (2,220)   -0.2%
          7      Ohio                                715,489      705,609     (9,880)    -1.4%
          8      Michigan                            720,350      739,483     19,133     2.7%
          9      North Carolina                      315,976      334,213     18,236     5.8%
         10      Georgia                             350,419      350,885      466       0.1%
        US       Total                              19,947,842   20,299,054   351,212    1.8%


Source: State Shipments from Beer Institute, 2009
     Top 10 Draught Growth States
     Total Year 2005 vs. 2006 (31 Gallon Barrels)
                                                                              Volume    Percent
     Rank State                                       2007          2008      Change    Change
         1      Arkansas                             77,452       84,526       7,075     9.1%
         2      Alaska                               39,634        43,156      3,521     8.9%
         3      Virginia                             454,209      492,288     38,079     8.4%
         4      Rhode Island                         77,541       84,007       6,465     8.3%
         5      Vermont                              42,078       45,396       3,319     7.9%
         6      Maryland                             318,432      343,142     24,711     7.8%
         7      New York                            1,000,179    1,067,880    67,701     6.8%
         8      Colorado                             637,678      680,356     42,678     6.7%
         9      North Carolina                       315,976      334,213     18,236     5.8%
        10      Oklahoma                             135,179      141,807      6,628     4.9%
       US       Total                               19,947,842   20,299,054   351,212    1.8%


Source: State Shipments from Beer Institute, 2009
     Beer CPI –Away from Home vs. At Home
     On Premise vs. Off Premise, 2000 to 2008
                         In last two years, trading up and premium pricing on premises has exceeded
                         off premise (at home) pricing.




Source: BLS and Beer Institute, 2009
Thank You


    Lester Jones
    Beer Institute
    Washington, DC
    ljones@beerinstitute.org

				
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