beer industry update january 2019 · gallons per lda beer wine spirits source: compiled by nbwa...
TRANSCRIPT
Beer Industry Update January 2019
Lester Jones, Chief Economist
National Beer Wholesalers Association
Twitter @joneslester
https://www.youtube.com/watch?v=xizCOdu3_1E
Length of Economic Expansions: Current vs. Previous Six Longest
115 120
106
92
73
58
45
0
10
20
30
40
50
60
70
80
90
100
110
120
130
June 2009 toDecember 2018
March 1991 toMarch 2001
Feb 1961 to Dec1969
Nov 1982 to July1990
Nov 2001 to Dec2007
March 1975 toJan 1980
Oct 1949 to July1953
# o
f M
on
ths
What will kill this expansion?
• Most likely, high interest rates as Fed responded to rising inflation. Just like the late 1950s, late 1960s, late 1980s.
• Energy/Oil shock inflation – In 1974 caused a recession as higher prices eroded purchasing power.
• Collapse of dot.com investment boom of late 1990s, together with stock market crash.
• Collapse of housing and excess leverage that led up to 2008-09 financial crisis.
Total U.S. Goods Producing vs Service Providing BLS Employment: Jan 2008 to Dec 2018
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
100,000
105,000
110,000
115,000
120,000
125,000
130,000
135,000
1/1
/20
08
4/1
/20
08
7/1
/20
08
10
/1/2
00
81
/1/2
00
94
/1/2
00
97
/1/2
00
91
0/1
/20
09
1/1
/20
10
4/1
/20
10
7/1
/20
10
10
/1/2
01
01
/1/2
01
14
/1/2
01
17
/1/2
01
11
0/1
/20
11
1/1
/20
12
4/1
/20
12
7/1
/20
12
10
/1/2
01
21
/1/2
01
34
/1/2
01
37
/1/2
01
31
0/1
/20
13
1/1
/20
14
4/1
/20
14
7/1
/20
14
10
/1/2
01
41
/1/2
01
54
/1/2
01
57
/1/2
01
51
0/1
/20
15
1/1
/20
16
4/1
/20
16
7/1
/20
16
10
/1/2
01
61
/1/2
01
74
/1/2
01
77
/1/2
01
71
0/1
/20
17
1/1
/20
18
4/1
/20
18
7/1
/20
18
10
/1/2
01
8
Go
od
s P
rod
uci
ng
Emp
loym
ent
Serv
ice
Emp
loym
ent
Service Employment Good Producing Employment
For now…the country has historically low unemployment rates, consistently adding new jobs, and experiencing wage growth across broader categories – even in goods producing sectors – blue collar
U.S Labor Force Participation Rates Who is Working…?
87.5
88.0
88.5
89.0
89.5
90.0
90.5
91.0
91.5
92.0
92.5
2008 2010 2018
Men 25-34
74.0
74.2
74.4
74.6
74.8
75.0
75.2
75.4
75.6
75.8
76.0
2008 2010 2018
Women 25-34
Source: U.S. BLS: Labor Force Statistics from the Current Population Survey
Differences Between Genders Alcohol Past 30 Days
40
60
80
100
120
140
160
Craft Beer Import Beer Light Beer Liquor Cider FMB Wine
Ind
ex B
ase
= 1
00
Male Female
Source: NBWA and Scarborough USA+ 2018 Release 1
US Demographics Legal Drinking Age Adults (21+ / LDA)
210
215
220
225
230
235
240
2452
01
0
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
Mill
ion
s
Total Legal Drinking Age Adults
70.5%
71.0%
71.5%
72.0%
72.5%
73.0%
73.5%
74.0%
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
LDA Share of Total Population
Source: Compiled by NBWA from U.S. Census Bureau 2018
US Fertility Rates Have Plummeted Into Uncharted Territory. 60.2 babies were born in 2017 for every 1,000 women of 'childbearing' age (15-44) – a low not seen in the US since officials
began charting.
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74 76 78 80 82 84
AGE
Fewer new drinkers each year
Source: U.S. Census and NBWA 2017.
U.S. Population by Age 2017
3 out of 4 people are 21+
Two generations at formidable transition points in their lives
40 is the most irrelevant age?
Hispanic Share of U.S. Census Population 2010 to 2017
15.5%
16.0%
16.5%
17.0%
17.5%
18.0%
18.5%
2010
2011
2012
2013
2014
2015
2016
2017
Hispanic Preferences Alcohol Past 30 Days
0
20
40
60
80
100
120
140
160
Imports Light Beer FMB Hard Liquor Wine DomesticRegular
Cider Craft
Ind
ex B
ase
= 1
00
Hispanic EthnictySource: NBWA and Scarborough USA+ 2018 Release 1
Imports and Mexico Share of Volume 1990 to 2018
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
Imports Share of Total Industry (17.7% of Total Industry 2018)
0%
10%
20%
30%
40%
50%
60%
70%
80%
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
Mexico Share of Total Imports (70% of all Imports 2018)
Source: U.S. Commerce and NBWA.
Count of Brewers and Craft Share of Volume 2000 to 2018
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
Count of Breweries
Count of Breweries
0%
2%
4%
6%
8%
10%
12%
14%
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
Craft Share
Craft Share
Source: U.S. TTB and NBWA.
Beer Segment Shares Growing High-End Beyond 40 Share
26.0 27.2 29.6 32.3 34.8 37.2 38.9 40.9
48.4 48.0 46.9 43.6 42.0 40.6 39.5 37.7
25.1 24.3 23.1 23.7 22.8 21.7 21.2 21.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
2010 2011 2012 2013 2014 2015 2016 2017
Segm
ent
Shar
e o
f To
tal V
olu
mes
High End (Craft/Imports/FMB/Cider) Premium Sub Premium/Malt-Liquor
Source: Beer Marketers Insights, 2018.
Total U.S. Ethanol Per Capita 2010 to 2017
1.34 1.31 1.31 1.30 1.30 1.30 1.29 1.27
0.37 0.38 0.38 0.38 0.38 0.38 0.39 0.39
0.79 0.81 0.83 0.84 0.84 0.86 0.87 0.9
0.0
0.5
1.0
1.5
2.0
2.5
2010 2011 2012 2013 2014 2015 2016 2017
Gal
lon
s Pe
r LD
A
Beer Wine Spirits
Source: Compiled by NBWA from TTB, Discus and BIG, 2018 (2017 wine volumes estimated by NBWA)
Total U.S. Ethanol Per Capita 2010 to 2017
0.79 0.81 0.83 0.84 0.84
0.86 0.87
0.90
2.5
2.5
2.5
2.5
2.5
2.6
2.6
2.6
2010 2011 2012 2013 2014 2015 2016 2017
Gal
lon
s Pe
r LD
A
Beer Wine Spirits
Source: Compiled by NBWA from TTB, Discus and BIG, 2018 (2017 wine volumes estimated by NBWA)
Better economic times = a little bit of incremental consumption
100.0
105.0
110.0
115.0
120.0
125.01
/1/2
00
8
4/1
/20
08
7/1
/20
08
10
/1/2
008
1/1
/20
09
4/1
/20
09
7/1
/20
09
10
/1/2
009
1/1
/20
10
4/1
/20
10
7/1
/20
10
10
/1/2
010
1/1
/20
11
4/1
/20
11
7/1
/20
11
10
/1/2
011
1/1
/20
12
4/1
/20
12
7/1
/20
12
10
/1/2
012
1/1
/20
13
4/1
/20
13
7/1
/20
13
10
/1/2
013
1/1
/20
14
4/1
/20
14
7/1
/20
14
10
/1/2
014
1/1
/20
15
4/1
/20
15
7/1
/20
15
10
/1/2
015
1/1
/20
16
4/1
/20
16
7/1
/20
16
10
/1/2
016
1/1
/20
17
4/1
/20
17
7/1
/20
17
10
/1/2
017
1/1
/20
18
4/1
/20
18
7/1
/20
18
10
/1/2
018
Ind
ex B
ase
10
0 a
t 2
00
8
Alcohol Beverage Inflation BLS at Home (Off Premise) Consumer Price Index Jan 2008 to Nov 2018
Beer CPI
100.0
105.0
110.0
115.0
120.0
125.01
/1/2
00
8
4/1
/20
08
7/1
/20
08
10/
1/2
008
1/1
/20
09
4/1
/20
09
7/1
/20
09
10/
1/2
009
1/1
/20
10
4/1
/20
10
7/1
/20
10
10/
1/2
010
1/1
/20
11
4/1
/20
11
7/1
/20
11
10/
1/2
011
1/1
/20
12
4/1
/20
12
7/1
/20
12
10/
1/2
012
1/1
/20
13
4/1
/20
13
7/1
/20
13
10/
1/2
013
1/1
/20
14
4/1
/20
14
7/1
/20
14
10/
1/2
014
1/1
/20
15
4/1
/20
15
7/1
/20
15
10/
1/2
015
1/1
/20
16
4/1
/20
16
7/1
/20
16
10/
1/2
016
1/1
/20
17
4/1
/20
17
7/1
/20
17
10/
1/2
017
1/1
/20
18
4/1
/20
18
7/1
/20
18
10/
1/2
018
Ind
ex B
ase
10
0 a
t 2
00
8
Alcohol Beverage Inflation BLS at Home (Off Premise) Consumer Price Index Jan 2008 to Nov 2018
Beer Liquor Wine
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.01
/1/2
00
83
/1/2
00
85
/1/2
00
87
/1/2
00
89
/1/2
00
81
1/1
/20
081
/1/2
00
93
/1/2
00
95
/1/2
00
97
/1/2
00
99
/1/2
00
91
1/1
/20
091
/1/2
01
03
/1/2
01
05
/1/2
01
07
/1/2
01
09
/1/2
01
01
1/1
/20
101
/1/2
01
13
/1/2
01
15
/1/2
01
17
/1/2
01
19
/1/2
01
11
1/1
/20
111
/1/2
01
23
/1/2
01
25
/1/2
01
27
/1/2
01
29
/1/2
01
21
1/1
/20
121
/1/2
01
33
/1/2
01
35
/1/2
01
37
/1/2
01
39
/1/2
01
31
1/1
/20
131
/1/2
01
43
/1/2
01
45
/1/2
01
47
/1/2
01
49
/1/2
01
41
1/1
/20
141
/1/2
01
53
/1/2
01
55
/1/2
01
57
/1/2
01
59
/1/2
01
51
1/1
/20
151
/1/2
01
63
/1/2
01
65
/1/2
01
67
/1/2
01
69
/1/2
01
61
1/1
/20
161
/1/2
01
73
/1/2
01
75
/1/2
01
77
/1/2
01
79
/1/2
01
71
1/1
/20
171
/1/2
01
83
/1/2
01
85
/1/2
01
8
Ind
ex G
ap b
etw
een
CP
I ove
r Ti
me
Alcohol Beverage Inflation Gap for Beer/Wine and Beer/Liquor
BLS at Home (Off Premise) Consumer Price Index Sept 2018
Trend in Beer/Liqour CPI Gap
Trend in Beer/Wine CPI Gap
4.54
4.56
4.58
4.60
4.62
4.64
4.66
4.68
4.70
4.72
2010 2017
Average Weighted ABV Beer
Growth in ABV for Beer and Liquor 2010 vs 2017
37.4
37.6
37.8
38.0
38.2
38.4
38.6
2010 2017
Average Weighted ABV Liquor
ABV by Beer Segment 2017 6.5% 6.5%
5.4%
5.0% 5.0% 4.7%
4.2%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
FMB Malt Craft Other Regular Import Light
Source: NBWA industry Affairs, 2018
IRI Scan: Total US: Multi Outlet + Conv 12/30/2018 Volume Sales Change vs YA % Change vs YA BEER 1,469,082,136 -3,729,563 -0.3%
ANHEUSER-BUSCH INBEV 696,817,906 -15,263,507 -2.1%
MILLERCOORS BREWING 368,149,746 -11,851,173 -3.1%
CONSTELLATION BRANDS 142,348,482 15,150,185 11.9%
HEINEKEN USA INC 50,153,414 -3,042,985 -5.7%
BOSTON BEER CO 28,561,186 4,434,547 18.4%
MARK ANTHONY BRANDS INC 22,497,335 4,444,936 24.6%
PABST BREWING CO 28,928,122 -1,555,424 -5.1%
DIAGEO BEER COMPANY USA 13,735,058 1,273,551 10.2%
D G YUENGLING & SON INC 16,722,439 -251,723 -1.5%
SIERRA NEVADA BREWING CO 7,171,843 83,089 1.2%
FIFCO USA 11,132,454 -944,740 -7.8%
NEW BELGIUM BREWING COMPANY 5,525,883 -473,052 -7.9%
THE LAGUNITAS BREWING COMPANY 4,748,144 74,935 1.6%
PHUSION PROJECTS INC 4,543,452 -314,861 -6.5%
THE GAMBRINUS COMPANY 4,098,904 -168,242 -3.9%
CRAFT BREW ALLIANCE INC 3,587,619 -277,515 -7.2%
FOUNDERS BREWING CO 3,387,061 929,772 37.8%
STONE BREWING CO. 1,753,418 170,544 10.8%
BELLS BREWERY INC 1,981,682 71,276 3.7%
CANARCHY CRAFT BREWERY COLLECTIVE 1,794,098 213,689 13.5%
FIRESTONE WALKER BREWING COMPANY 2,049,306 308,204 17.7%
DESCHUTES BREWERY 1,748,468 -180,977 -9.4%
SWEETWATER BREWING COMPANY, LLC 1,866,343 24,879 1.4%
ARTISANAL BREWING VENTURES 1,076,672 150,200 16.2%
DOGFISH HEAD CRAFT BREWERY 951,349 99,209 11.6%
IRI Beer Segments Growth CY Ending 12/30/2018
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
DOM SUPERPREM
FLAV MALT BEV IMPORT CRAFT DOM SUB-PREMIUM
NON-ALCOHOLIC
DOM PREMIUM
Access to Alcohol is Expanding!
Fast Food Nordstrom's Bed, Bath and Beyond
Barbers and Salons Taprooms Movie Theaters
Whole Foods
Laundromats
Even at The Library…
Total U.S. Retail Establishments Selling Alcohol 2008 to 2018
531,705 536,807 553,458
571,290 585,690
602,757 610,299
625,276 631,699 644,647 644,939
400,000
450,000
500,000
550,000
600,000
650,000
700,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: TDLinx Account Tracker Report: Beer, Wine or Spirit Selling Accounts, 2018.
Even as Retail Expands in Virtual Space…
The Evolution of the Wine Club
• Amazon
• Drizly
• Minibar
• Klink
• Saucey
• Hopsy
• Total Wine
• Brick and mortar…
As New Retail and E-Commerce Expands… Traditional Bars and Taverns Close?
U.S. BLS: Establishment Counts
40,000
41,000
42,000
43,000
44,000
45,000
46,000
47,000
2010 2011 2012 2013 2014 2015 2016 2017
Co
un
t o
f Es
tab
lish
men
ts
Number of Establishments in Private NAICS 722410 Drinking places, alcoholic beverages for All establishment sizes in U.S. TOTAL
Growth in Alcohol Beverage Wholesalers 2010 to 2018
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2010 2011 2012 2013 2014 2016 2017 2018
Source: U.S. TTB and U.S. BLS/CQEW, 2018
TTB Permitted Brewery Count 9,865 Permits as of Sept 2018
Source: NBWA and TTB, September 2018.
State Count State Count State Count Alabama 54 Kentucky 83 North Dakota 26 Alaska 50 Louisiana 48 Ohio 363 Arizona 143 Maine 160 Oklahoma 53 Arkansas 52 Maryland 136 Oregon 376 California 1,204 Massachusetts 225 Pennsylvania 457 Colorado 492 Michigan 500 Rhode Island 33 Connecticut 120 Minnesota 236 South Carolina 92 Delaware 36 Mississippi 19 South Dakota 34 DC 14 Missouri 162 Tennessee 137 Florida 376 Montana 107 Texas 370 Georgia 115 Nebraska 60 Utah 45 Hawaii 34 Nevada 49 Vermont 89 Idaho 85 New Hampshire 105 Virginia 322 Illinois 329 New Jersey 139 Washington 531 Indiana 229 New Mexico 124 West Virginia 31 Iowa 124 New York 520 Wisconsin 298 Kansas 59 North Carolina 374 Wyoming 43
State Count State Count State Count Alabama 2 Kentucky 10 North Dakota 4 Alaska 5 Louisiana 5 Ohio 39 Arizona 13 Maine 29 Oklahoma 10 Arkansas 8 Maryland 20 Oregon 29 California 98 Massachusetts 36 Pennsylvania 46 Colorado 44 Michigan 48 Rhode Island 6 Connecticut 17 Minnesota 22 South Carolina 8 Delaware 5 Mississippi 3 South Dakota 6 DC 1 Missouri 17 Tennessee 17 Florida 38 Montana 9 Texas 37 Georgia 13 Nebraska 7 Utah 6 Hawaii 6 Nevada 3 Vermont 5 Idaho 9 New Hampshire 17 Virginia 35 Illinois 38 New Jersey 16 Washington 32 Indiana 16 New Mexico 14 West Virginia 4 Iowa 9 New York 49 Wisconsin 37 Kansas 6 North Carolina 44 Wyoming 4
Source: NBWA and TTB, September 2018.
TTB Permitted Brewery Count 1,002 New Permits Through September 2018
Brewery Permits per 100,000 Residents 2018 LDA Pop (est)
US Average = 4.1
State Count State Count State Count Alabama 1.49 Kentucky 2.52 North Dakota 4.76 Alaska 9.48 Louisiana 1.4 Ohio 4.2 Arizona 2.74 Maine 15.35 Oklahoma 1.87 Arkansas 2.36 Maryland 3.01 Oregon 11.84 California 4.12 Massachusetts 4.3 Pennsylvania 4.73 Colorado 11.69 Michigan 6.73 Rhode Island 4.1 Connecticut 4.45 Minnesota 5.74 South Carolina 2.43 Delaware 5.21 Mississippi 0.88 South Dakota 5.43 DC 2.57 Missouri 3.58 Tennessee 2.72 Florida 2.29 Montana 13.49 Texas 1.84 Georgia 1.51 Nebraska 4.36 Utah 2.15 Hawaii 3.16 Nevada 2.16 Vermont 18.64 Idaho 6.87 New Hampshire 10.1 Virginia 5.09 Illinois 3.49 New Jersey 2.06 Washington 9.47 Indiana 4.72 New Mexico 8.13 West Virginia 2.25 Iowa 5.41 New York 3.47 Wisconsin 6.92 Kansas 2.83 North Carolina 4.87 Wyoming 10.28
Source: NBWA and TTB, September 2018.
TTB Brewery Permits Issued Per Day 2010 to YTD September 2018
0.6
1.0
1.6 1.7
2.8 3.1 3.0
4.6
3.5 3.4
4.3
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2010 2011 2012 2013 2014 2015 2016 2017 18 Q1 18 Q2 18 Q3
Perm
its
Issu
ed P
er D
ay
Source: www.ttb.gov/beer/beer-stats.shtm and NBWA Industry Affairs, 2018
Small Business Administration Cumulative $1.5 Billion in Loan Approvals/Guarantees since 2009
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
Brewing Distilling Whining
In Addition: 1. Eliminated FET Bond Requirement 2. Reduced Paperwork and Tax Filing (annual) 3. Reduced FET to $3.50 (CBMRTA) 4. Reduced state taxes 5. State and local economic development support 6. Expanded retail and self distribution privileges 7. All = more new entrants on horizon
THANK YOU
Lester Jones, Chief Economist National Beer Wholesalers Association [email protected] Twitter @joneslester