The U.S.’s total beer supply declined -6.7% year-over-year (YoY) in September, as built-up summer inventories (domestic production plus imports) fell back in line with depletion trends, according to Beer Institute (BI) chief economist Andrew Heritage.
The declines accelerated from the -4.4% total supply decrease recorded in August, with the latest trends driven by domestic tax paids declines, and the typically strong import segment falling into the red.
The latter was nearly flat in September, declining -0.1% YoY, according to data from the Department of Commerce. Imports’ break from pattern follows five consecutive months of YoY growth, with the last decline recorded in March (-4.5%).
As was the case during that previous decline, imports’ contraction is mainly due to a decrease in Mexican imports, which make up the majority of import volume in the U.S. Mexican import volume declined -0.6% in September, to more than 80.2 million gallons (nearly 2.59 million barrels). The decline follows +8.3% YoY growth in August and +7.3% growth in July. Year-to-date (YTD), Mexican imports have increased +9.1%.
Still, several top 10 countries by YTD volume were able to increase import volume YoY, including No. 2 Netherlands (+5.2%), No. 3 Ireland (+23.4%), No. 5 Germany (+28%), No. 6 Italy (+25.6%), No. 7 Belgium (+31.5%), No. 8 Guatemala (+25.1%) and No. 10 Poland (+86%).
Domestic tax paid shipments declined -8.3% in September, marking the fourth consecutive month of decline. An estimated 12 million barrels were shipped during the month, marking a decline of more than -1.08 million barrels YoY, according to data from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
Domestic tax paids are subject to change as the TTB receives more data. Case in point, August declines were steeper than initially reported, according to the latest BI report, which now shows domestic tax paids declining -8.1% for the month, versus the -7.7% decline initially reported.
YTD shipments have declined -3.8%, to nearly 113.76 million barrels, a loss of nearly -4.46 million barrels versus the first nine months of 2023.
State shipments to wholesalers declined -4.8% in September, to nearly 14.87 million barrels. YTD state shipments have declined -1.7%, to nearly 145.36 million barrels. Nearly all 50 states are now in the red or flat YTD, with the exception of California, the second largest state by shipment volume (+2.2% YTD, to nearly 15.39 million barrels), as well as Nevada (+1.8%, to more than 1.74 million barrels).
Despite declines, fall is starting to “look much stronger for the beer industry,” according to Heritage, who noted that the industry grew during two of the last three weeks and depletions were flat over the last four weeks.
“Several of the headwinds the industry faced over the summer have abated: Warm fall weather will make for more optimal beer-drinking days and consumer sentiment shows some signs of improvement,” Heritage wrote. “The industry is now at a new baseline that it will grow from in the coming months as Americans continue to choose beer to celebrate the upcoming holidays.”
The BI’s October economic reports are scheduled to be released December 5.