Beer Serves America Study: Beer Industry’s Economic Output Increased $4 Billion Since 2018

The U.S. beer industry’s economic output has increased by $4 billion since 2018, which is equivalent to 1.6% of the U.S. gross domestic product, according to the “Beer Serves America” report — a biennial study commissioned by the Beer Institute (BI) and the National Beer Wholesalers Association (NBWA).

“Two years ago, [the economic contribution] was $328 billion. This year, it’s actually $332 billion in economic contribution, which for us jumps off the page,” Jim McGreevy, president and CEO of the BI, told Brewbound. “The economic contribution number is probably the second most important number that policymakers look at.”

“You took all these beer occasions, and you took them off the table,” Craig Purser, NBWA president and CEO, added. “No sports, no music festivals, no fairs, none of these things that bring people together that are people centric and that are beer centric. And to finish this year where we were volume wise, and to see this continued economic increase is a really good story to tell. It’s another demonstration of resilience that we saw on display. This industry is giving Americans a sense of normalcy during a period that was very important.”

The leaders of the BI and NBWA say they will use the study to advocate for the importance of the beer industry — which impacts 96% of the U.S. economy — with congressional members. The Beer Serves America report was one of the tools used in recent years to advocate for the permanent reduction in the federal excise tax for brewers and importers.

The latest study, conducted by John Dunham & Associates, uses data collected from private companies, Infogroup, the U.S. Bureau of Labor Statistics, the Alcohol Tobacco Tax and Trade Bureau (TTB), and the U.S. Bureau of Economic Analysis.

The study found that the beer industry supports more than 2 million direct and indirect jobs, with brewers and beer wholesalers directly employing nearly 210,000 Americans. Each direct industry job generates another 30 jobs in related industries, such as farming, transportation, and hospitality.

The report also gives a glimpse at the impact of the COVID-19 pandemic and the shutdown of on-premise outlets such as bars and restaurants in 2020. Over the last two years, 568,000 jobs that rely on the beer industry have been lost, exacerbated by the pandemic. That amounted to a net loss of about 100,000 jobs since the 2019 Beer Serves America report.

Most job losses came from bars and restaurants, with 90,000 restaurants closing permanently or long-term since March 2020, according to an economic impact report by the BI, NBWA, and American Beverage Licensees.

Retail beer sales dropped by nearly $20 billion due to closures and restrictions in the hospitality sector. Between March 2020 and April 2021, restaurant and foodservice sales were down $290 billion from expected levels, Tom Bené, president and CEO of the National Restaurant Association, said in the release.

The retail sector has the most jobs supplied directly by the beer industry. Beer sold on- and off-premise supplies more than 800,000 American jobs in grocery stores, liquor stores, convenience stores, bars, restaurants and stadiums, according to the report.

Meanwhile, beer wholesalers account for 140,000 direct jobs in the industry, according to Purser. The sector has seen continued growth with more craft and small brewers opening in recent years.

In agriculture, the beer industry supports more than 36,000 jobs through barley, hops, rice, and more. Hops producers had sales declines due to COVID-19 impacts on the brewing industry, as well as yield reductions due to severe weather and heavy smoke cover in 2020, Hop Growers of America executive director Ann George said in the release.

In the manufacturing sector, the beer industry supports more than 70,000 jobs through production of cans, bottles, kegs, and packaging equipment, National Association of Manufacturers president and CEO Jay Timmons said in the release. Every $1 spent in manufacturing, including for the beer industry, adds $2.69 to the U.S. economy.

As the industry begins to recover, the biggest challenges come from demand, supply, and labor. Manufacturers have sounded “alarm bells” about potential out of stocks due to the shortage of aluminum cans and other raw materials, Purser said. As consumer demand changes with the return of the on-premise, producers are facing the challenge of trying to predict consumer behaviors, while balancing having enough labor to support increased production.

“We’ve got good jobs and good wages on the distribution side, and I’ve got member after member that [have] $25 an hour jobs that they can’t fill because there just are no people for those jobs,” Purser said.

Purser and McGreevy both emphasized the need for collaboration across the beer industry to help in economic recovery.

“The fact that the great associations are working together in different ways, this report is an example that really helps the industry overall,” McGreevy said.

The BI and NBWA plan to continue to grow the Beer Growth Initiative (BGI), which brings togethers industry leaders in brewing, distribution, and trade to help grow the beer category. In 2020, they ran the #BeersToThat campaign; a national brand-agnostic initiative that leveraged social media, point-of-sale tools, and on- and off-premise outlets to remind consumers to drink beer to celebrate any occasion.

“We’re all hoping that sense of normalcy really is on steroids through the summer months,” McGreevy said. “We’re hoping for a boffo summer: get beer, get beer occasions moving again. And hopefully two years from now these numbers are even better.”