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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 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!

4 Structure of Industry 1980-2010 1980199020002010 # 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, 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)

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, 1992-2011 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.

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 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)

9 Industry Supply Aug YTD 2010 vs. Aug YTD 2011 TotalDomesticImport 2010 YTD (1,000s bls)142,494123,64818,846 2011 YTD (1,000s bls)139,661120,46119,201 % Change-2.0%-2.6%+1.9% Volume Change-2,833-3,187355 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)142,494113,00817,31510,6401,531 2011 (1,000s bls)139,661109,99717,54410,4641,657 % Change-2.0%-2.7%+1.3%-1.7%+8.2% Volume Change-2,833-3,012229-176125 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 2002 - 2010

12

13 Imported Draft Volumes YTD 2010 vs. YTD 2011 (gallons) Country2010 YTD2011 YTD Volume Change Percent Change BELGIUM9,963,38712,670,9412,707,55527.2% IRELAND9,889,7589,840,377-49,381-0.5% MEXICO3,982,2847,743,2033,760,91894.4% CANADA8,817,1077,690,633-1,126,475-12.8% GERMANY4,282,3414,418,509136,1683.2% UNITED KINGDOM5,495,6253,703,931-1,791,695-32.6% NETHERLANDS3,252,8483,200,590-52,258-1.6% ITALY828,480934,916106,43712.8% FRANCE190,585257,84267,25735.3% DENMARK165,271162,105-3,165-1.9% JAPAN12,245124,111111,866913.6% AUSTRIA70,863103,80932,94646.5% OTHERS522,804513,203-9,601-1.8% Total47,473,59851,364,1703,890,5728.2%

14 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 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% Pennsylvania1,570,75017.7%-2.1% Florida1,417,91711.2%-2.8% Texas1,154,0476.0%7.7% New York1,079,48210.4%2.3% Illinois857,3229.7%1.8% Wisconsin725,47015.0%-0.9% Ohio702,8128.4%-1.7% Colorado657,77918.5%7.3% Michigan646,01710.3%-7.3% Top 10 States10,957,07010.4%-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 ljones@beerinstitute.org


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