April domestic tax paid shipments declined an estimated -4.3% year-over-year (YoY), to 12.3 million barrels, according to Beer Institute (BI) chief economist Andrew Heritage, citing estimates from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
While still in decline, April shipments improved from the -13.6% YoY decline recorded in March, which followed two consecutive months of growth and the “strongest monthly growth in almost three years” in February. The TTB also continues to update its estimates, and March’s double-digit decline could still change.
Year-to-date (YTD) through April, domestic tax paids have declined -2.4%, to nearly 48.57 million barrels, a loss of more than 1.2 million barrels versus the same four-month period in 2023.
State shipments were back in the black, increasing +2.6% YoY and +0.5% YTD. March estimates had state shipments declining -11.6% YoY and -0.5% YTD, with all 50 states recording YoY declines. In May, 29 states recorded YoY shipment volume gains, including large beer states such as California (+12.6%) and New York (+3.5%). However, No. 1 Texas recorded a -2.7% decline in state shipments and No. 3 Florida was flat (-0.1% YoY).
Double-digit percentage increases were recorded by Colorado (+11.1% YoY), Delaware (+26.4%), Indiana (+12.6%) New Jersey (+12.7%) and Rhode Island (+15.3%). The largest percentage declines were recorded by New Mexico (-16.8%) and Maine (-11%).
“While it might not feel like it from the choppy month-to-month readings, beer is trending better than the past year as a whole,” Heritage wrote. “Total supply increased year-over-year in April at +0.5% and is nearly flat year-to-date through April, down 85K barrels, or -0.1%. Over the past 12 months, total supply is down -4.5%, meaning that the industry has turned the corner and stronger monthly comps are ahead as we approach the summer months.”
Total supply was “buoyed” by imports, which increased +19.9% YoY in April and are now up +8.8% YTD. In March, imports declined -4.5% YoY and -5.1% YTD, driven by a -5.6% YoY decline in Mexican imports, which “lost some momentum in March,” Heritage wrote at the time. Mexican imports bounced back in April, increasing +23.8% YoY and +11.6% YTD.
The Netherlands, the second largest imports contributor to the U.S., was also in the black, increasing its supply +8.3% YoY and +2.1% YTD. Unlike Mexico, the Netherlands had a strong March, increasing its imports +30.3% YoY.
Beyond the top two, No. 9 Guatemala and No. 10 Vietnam were the only other countries in the top 10 to record increases YTD – +18.5% and +87.6%, respectively. Six of the top 10 recorded YoY gains, including No. 5 Germany (+22.9%), No. 6 Italy (+22%), No. 8 Jamaica (+46%) and Guatemala (+71%). Meanwhile, No. 3 Ireland (-25.3%), No. 4 Canada (-4.7%), No. 7 Belgium (-29.7%) and Vietnam (-37.1%) recorded YoY declines.
“From a larger macroeconomic perspective, a minor consumer pullback appears to be setting across industries as they feel the pinch of increased prices over recent years for just about everything,” Heritage wrote. “Inflation has slowed over the past year, but the beer consumer’s budget is increasingly stressed.”
On-premise sales have declined -4.5% YTD through April, and total category depletions are down -2.4%, according to Heritage. Meanwhile, the April Consumer Price Index for beer increased +4% away from home, and +3% at home.
“Shipments have been stronger for the year (+0.5%) than depletions, which means beer inventory stocks have increased,” Heritage added. “The increase in production has not yet translated to stronger retail sales.
“Consumer tightening coupled with worse-than-average spring weather explains the softer-than-expected readings we’ve had for beer,” he continued. “But there is still good reason to think that the summer months will outperform last year.”
The BI will release economic reports for May on July 3.