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Beer Institute, Research Washington, DC Draft Beer Industry Update, 2011 Lester Jones Chief Economist Beer Institute, Washington, DC.

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Presentation on theme: "Beer Institute, Research Washington, DC Draft Beer Industry Update, 2011 Lester Jones Chief Economist Beer Institute, Washington, DC."— Presentation transcript:

1 Beer Institute, Research Washington, DC Draft Beer Industry Update, 2011 Lester Jones Chief Economist Beer Institute, Washington, DC

2 Measuring the Malt Beverage Industry (brewers/importers -- distributors-- retailers -- consumers) 1. Industry Supply US Total = -2.0% Domestic (-2.6%) + Imports (+1.9%) (100% of Industry volumes) 2. State Shipments US Total = -1.8% NC (+1.1%), FL(+1.0%), TX (+0.5%) (100% of industry volumes) 3. Sales to Retailers US Total= -1.9% On-Prem (-2.2%) + Off-Prem (-1.9%) (90% of industry volumes) 4. Sales to Consumers US Total = -2.1% (Food, Drug, Liquor & Conv)

3 Draft Beer Market In 2010… – US brewers produced million gallons of draft – importers brought 68.5 million gallons of draft – total draft industry was 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 million gallons – 10.4 million hrs ,268 days -- 1,190 years to flow! – If all 2010 volumes went through 1 keg, it would flow until the year 3201!

4 Structure of Industry # of Brewers482981,5001,600+ Domestic Share97%95%90%87% Craft Share (BA)-< 1%3%5% Import Share3%5%10%13% Can Share53%59%51%52% Bottle Share35%30%40%38% Refill Bottle12%5%2%0% Draft Share12%11%9%9.7% Source: Beer Institute, Brewers Association, Commerce Department, and TTB, 2011

5 Per Capita Consumption of Malt Beverages 1980 to 2010 (total gallons/total population) Source: Beer Institute, in in Demographics (baby boomer-millenniums ) 3.Increased alcohol beverage competition 4.Increased non-alcohol beverage competition 5.Policy Changes (21 LDA and.08)

6 Total Industry Supply (Domestic Tax Paid + Imports) 7-8 million barrels off peak from early 1990s (248 million gallons) Source: Beer Institute, Commerce Department, and TTB, 2011

7 Gallup Poll, 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 year old group dropped from 51% in 2010 to 39% in For people with incomes less than $30K, 51% are reported beer drinkers.

8 2010 Wine, Liquor and Beer Volume Share and Growth Trends By Price Tiers WineLiquorBeer TiersShareGrowthShareGrowthShareGrowth High26%21%24%5%17%7% Middle33%16%36%2%54%-2% Low41%-14%40%0%28%-3% Total100%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 million barrels into high end to match wine and spirits share distribution. Source: Beer Institute, 2011 (Beer Marketers Insights, Discus, Beverage Information Group)

9 Industry Supply Aug YTD 2010 vs. Aug YTD 2011 TotalDomesticImport 2010 YTD (1,000s bls)142,494123,64818, YTD (1,000s bls)139,661120,46119,201 % Change-2.0%-2.6%+1.9% Volume Change-2,833-3, Share of Total YTD86.3%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

10 Industry Supply – Package Mix Aug YTD 2010 vs. Aug YTD 2011 Total Packaged Domestic Packaged Import Draft Domestic Draft Import 2010 (1,000s bls)142,494113,00817,31510,6401, (1,000s bls)139,661109,99717,54410,4641,657 % Change-2.0%-2.7%+1.3%-1.7%+8.2% Volume Change-2,833-3, Share of Total YTD78.8%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

11 Growing US Draft Share

12

13 Imported Draft Volumes YTD 2010 vs. YTD 2011 (gallons) Country2010 YTD2011 YTD Volume Change Percent Change BELGIUM9,963,38712,670,9412,707, % IRELAND9,889,7589,840,377-49, % MEXICO3,982,2847,743,2033,760, % CANADA8,817,1077,690,633-1,126, % GERMANY4,282,3414,418,509136,1683.2% UNITED KINGDOM5,495,6253,703,931-1,791, % NETHERLANDS3,252,8483,200,590-52, % ITALY828,480934,916106, % FRANCE190,585257,84267, % DENMARK165,271162,105-3, % JAPAN12,245124,111111, % AUSTRIA70,863103,80932, % OTHERS522,804513,203-9, % Total47,473,59851,364,1703,890,5728.2%

14 Source: TTB and Beer Institute, % < share 2010 Draft Share of by State 8%< share < 10% 0%< share<8% US Average 9.7% in 2010 Almost 5 billion 16oz Servings

15 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 California2,145,4739.7%-6.8% Pennsylvania1,570, %-2.1% Florida1,417, %-2.8% Texas1,154,0476.0%7.7% New York1,079, %2.3% Illinois857,3229.7%1.8% Wisconsin725, %-0.9% Ohio702,8128.4%-1.7% Colorado657, %7.3% Michigan646, %-7.3% Top 10 States10,957, %-1.2% Others9,028,3979.0%4.0% Total US19,985,4679.7%1.1%

16 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%

17 Thank You Beer Institute Washington, DC


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