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Beer Institute, ResearchWashington, DC Draft Beer Industry Update, 2011
Lester JonesChief EconomistBeer Institute, Washington, DC
Measuring the Malt Beverage Industry(brewers/importers -- distributors-- retailers -- consumers)
1. Industry SupplyUS Total = -2.0%
Domestic (-2.6%) + Imports (+1.9%) (100% of Industry volumes)
2. State ShipmentsUS Total = -1.8%
NC (+1.1%), FL(+1.0%), TX (+0.5%)(100% of industry volumes)
3. Sales to RetailersUS Total= -1.9%
On-Prem (-2.2%) + Off-Prem (-1.9%) (90% of industry volumes)
4. Sales to ConsumersUS Total = -2.1%
(Food, Drug, Liquor & Conv)
Draft Beer Market• In 2010…
– US brewers produced 556.8 million gallons of draft– importers brought 68.5 million gallons of draft– total draft industry was 625.3 million gallons
• From 2009 to 2010…– Share of draft grew from 9.5% 2009 to 9.7% in 2010– 1 out of 10 beers consumed in the US is a draft beer– Total draft volumes grew +1.1% while overall industry declined
• Flow rate of 1 min/gallon and 625.3 million gallons– 10.4 million hrs. -- 434,268 days -- 1,190 years to flow!– If all 2010 volumes went through 1 keg, it would flow until the
year 3201!
Structure of Industry 1980-2010
1980 1990 2000 2010# of Brewers 48 298 1,500 1,600+
Domestic Share 97% 95% 90% 87%
Craft Share (BA) - < 1% 3% 5%
Import Share 3% 5% 10% 13%
Can Share 53% 59% 51% 52%
Bottle Share 35% 30% 40% 38%
Refill Bottle 12% 5% 2% 0%
Draft Share 12% 11% 9% 9.7%
Source: Beer Institute, Brewers Association, Commerce Department, and TTB, 2011
Per Capita Consumption of Malt Beverages1980 to 2010 (total gallons/total population)
18.0
19.0
20.0
21.0
22.0
23.0
24.0
25.0
Source: Beer Institute, 2011
1. 24.6 in 1981 20.6 in 2010
2. Demographics (baby boomer-millenniums )
3. Increased alcohol beverage competition
4. Increased non-alcohol beverage competition
5. Policy Changes (21 LDA and .08)
Total Industry Supply(Domestic Tax Paid + Imports)
19801982
19841986
19881990
19921994
19961998
20002002
20042006
20082010
180,000,000.0
185,000,000.0
190,000,000.0
195,000,000.0
200,000,000.0
205,000,000.0
7-8 million barrels off peak from early 1990s(248 million gallons)
Source: Beer Institute, Commerce Department, and TTB, 2011
Gallup Poll, 1992-2011
1992
1994
1996
1997
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
0%5%
10%15%20%25%30%35%40%45%50%
Beer Wine Liquor
Perc
en
t of
Resp
on
den
ts
41% v 32%
Source: Gallup Poll, 2011: Do you most often drink beer, wine, or liquor?
Beer faces challenge as the preferred beverage of choice for US consumers . (666 respondents with 5 pts +/- margin of error)
36% v 35%
The 18-34 year old group dropped from 51% in 2010 to 39% in 2011.
For people with incomes less than $30K, 51% are reported beer drinkers.
2010 Wine, Liquor and BeerVolume Share and Growth Trends By Price Tiers
Wine Liquor Beer
Tiers Share Growth Share Growth Share Growth
High 26% 21% 24% 5% 17% 7%
Middle 33% 16% 36% 2% 54% -2%
Low 41% -14% 40% 0% 28% -3%
Total 100% 2% 100% 2% 100% -1%
Opportunity for beer to continue to grow in high end. Continued growth for crafts, imports and specialties. Industry would need to add 15-20
million barrels into high end to match wine and spirits share distribution.
Source: Beer Institute, 2011 (Beer Marketers Insights, Discus, Beverage Information Group)
Industry SupplyAug YTD 2010 vs. Aug YTD 2011
Total Domestic Import2010 YTD (1,000s bls) 142,494 123,648 18,846
2011 YTD (1,000s bls) 139,661 120,461 19,201
% Change -2.0% -2.6% +1.9%
Volume Change -2,833 -3,187 355
Share of Total YTD 86.3% 13.7%
Eight months of data show a shift in share to imports with imports growing +1.9% vs. -2.6% for domestics..
Source: Beer Institute, Commerce Department and TTB, 2011
Industry Supply – Package MixAug YTD 2010 vs. Aug YTD 2011
TotalPackaged Domestic
Packaged Import
Draft Domestic
Draft Import
2010 (1,000s bls) 142,494 113,008 17,315 10,640 1,531
2011 (1,000s bls) 139,661 109,997 17,544 10,464 1,657
% Change -2.0% -2.7% +1.3% -1.7% +8.2%
Volume Change -2,833 -3,012 229 -176 125
Share of Total YTD 78.8% 12.6% 7.5% 1.2%
Eight months of data show a shift in share to imports with imports growing +1.9% vs. -2.6% for domestics. This year, draft is fairing much better than packaged (bottles) and is
gaining share of market thanks to growing imports.
Source: Beer Institute, Commerce Department and TTB, 2011
Growing US Draft Share2002 - 2010
2002 2003 2004 2005 2006 2007 2008 2009 20107.0%
7.5%
8.0%
8.5%
9.0%
9.5%
10.0%
10.5%
Imports Domestic Total
Import draft took off in 2007 to peak at 9 share in 2008.
Jan-04
May-04
Sep-04
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Jan-09
May-09
Sep-09
Jan-10
May-10
Sep-10
Jan-11
May-11 100,000
120,000
140,000
160,000
180,000
200,000
220,000
240,000
Bubble and Bust - Monthly Draft Import Volumes12 Mos. Moving Average, Jan 2004 to Aug 2011
May 2007 to June 2008 = +1.4%
Jan 2010 to Aug 2011 = +0.5%
Recession 12/07 to 6/09
Jan 2005 to April 2007 = +0.7%
July 2008 to Dec 2009 = -1.3%
Imported Draft VolumesYTD 2010 vs. YTD 2011 (gallons)
Country 2010 YTD 2011 YTDVolumeChange
Percent Change
BELGIUM 9,963,387 12,670,941 2,707,555 27.2%
IRELAND 9,889,758 9,840,377 -49,381 -0.5%
MEXICO 3,982,284 7,743,203 3,760,918 94.4%
CANADA 8,817,107 7,690,633 -1,126,475 -12.8%
GERMANY 4,282,341 4,418,509 136,168 3.2%
UNITED KINGDOM 5,495,625 3,703,931 -1,791,695 -32.6%
NETHERLANDS 3,252,848 3,200,590 -52,258 -1.6%
ITALY 828,480 934,916 106,437 12.8%
FRANCE 190,585 257,842 67,257 35.3%
DENMARK 165,271 162,105 -3,165 -1.9%
JAPAN 12,245 124,111 111,866 913.6%
AUSTRIA 70,863 103,809 32,946 46.5%
OTHERS 522,804 513,203 -9,601 -1.8%
Total 47,473,598 51,364,170 3,890,572 8.2%
Source: TTB and Beer Institute, 2011
10% < share
2010 Draft Share of by State
8%< share < 10%
0%< share<8% US Average 9.7% in 2010Almost 5 billion 16oz Servings
2010 Top 10 Largest Draft States
Top 10 Largest States have 55% of US Volume Source: Beer Institute, 2011
State 2010 Draft
Volumes (bls)Draft Share
Change in Draft Volumes
California 2,145,473 9.7% -6.8%Pennsylvania 1,570,750 17.7% -2.1%Florida 1,417,917 11.2% -2.8%Texas 1,154,047 6.0% 7.7%New York 1,079,482 10.4% 2.3%Illinois 857,322 9.7% 1.8%Wisconsin 725,470 15.0% -0.9%Ohio 702,812 8.4% -1.7%Colorado 657,779 18.5% 7.3%Michigan 646,017 10.3% -7.3%Top 10 States 10,957,070 10.4% -1.2%Others 9,028,397 9.0% 4.0%
Total US 19,985,467 9.7% 1.1%
Source: TTB and Beer Institute, 2011
Growth 4.0% to 20%
Draft Volume Growth, 2010
Growth -1.0% to +3.9%
Growth -1.1 to -15%
US Average +1.1%
