Economy pumped by beer
Two industry reports point to beverage’s impact on agriculture and brewing jobs
Americans have yet to slake their thirst for beer, a pair of industry reports show.
One study released Tuesday estimates the industry’s economic output at more than $250 billion, or about 1.5 percent of the U.S. gross domestic product. The study, conducted for the National Beer Wholesalers Association and the Beer Institute, crunched numbers for all aspects of the business, from agricultural production to brewing and brewery suppliers to distributors and retailers.
Breweries last year employed nearly 6,000 more people than they did two years earlier, researchers with New York-based John Dunham & Associates found.
In Texas, the study pegged the annual economic contribution of beer at $19 billion and linked it to 124,000 jobs in
various enterprises.
“Clearly, beer is great for the economy, and the industry brings a lot of jobs to our state,” Charles Vallhonrat, executive director of the Texas Craft Brewers Guild, said in response to the report.
He said the numbers square with previous studies by the Brewers Association, which represents the generally smaller craft breweries.
“It can be said that beer truly serves America,” Jim McGreevy, president and CEO of the Beer Institute, said in a statement announcing the findings on Tuesday. “Beer is more than our nation’s favorite adult drink — it is a powerhouse in job creation, commercial activity and tax revenue.”
The study also pointed out the continuing migration of Americans to craft beers from more established mainstream brands.
It noted, for example, that the number of physical breweries has increased substantially over the past two years, though it described most of the facilities as “very small brewers or brewpubs.” It credited 70 percent of total employment to the larger players, including AnheuserBusch InBev, MillerCoors and Boston Beer Co., each of which make upward of 2 million barrels, and “several dozen” sizable regional breweries such as Sierra Nevada, New Belgium and Dogfish Head. It said the percentage was not much changed from 2012.
Retail worker decline
The study also acknowledged the “dramatic shift” by consumers to craft beer. It cited the phenomenon as a potential contributing factor in the decline of beer-retail workers since 2012, along with a general slump in retail employment since the last national recession.
“There has also been a dramatic shift away from less expensive products to more expensive local and ‘craft’ beers in bars and restaurants,” the study says. “Consumers purchase smaller volumes of these higher priced beers than they do of less expensive domestic light lagers and pilsners, suggesting that fewer employees are required to serve beer in a given bar or tavern.”
Vallhonrat said that claim seems “counterintuitive.”
“Craft beer provides a great deal more variety and styles of beer than the single-style, light pilsner beer from the large nationwide breweries,” he said by email. “The diversity available in craft beer has driven the growth of significant tap installation, including tap walls, in many retail locations — including grocery stores. This growth in available brands of beer is calling for a greater number of knowledgeable people serving the beer, and spending time with their customers discussing the qualities and attributes of the craft beer they choose.”
Across greater Houston, 31 brewery and brewpub licenses are on file with the state, and most of those operations are up and running. In addition, strong brands from other states continue to expand here.
In its midyear growth report made public on Monday, the Brewers Association emphasized the continuing surge of that sector nationally, pointing out that craft production rose 16 percent during the first half of 2015, when U.S. craft brewers sold some 12.2 million barrels of beer, up from 10.6 million barrels during the same period in 2014.
More breweries
The report also found that, as of June 30, there were 3,739 breweries in operation nationally. That’s 699 more than at the same point in 2014. The 23 percent increase is higher than the rate of increase in the previous three midyear reports.
These breweries employ 115,469 full-time and parttime workers, the association said.
And the craft segment appears ready to grow further, with 1,755 breweries in the planning stages.
“The continued growth of small and independent brewers illustrates that additional market opportunities and demand are prevalent,” Brewers Association chief economist Bart Watson said in a statement. But, he cautioned, “competition in the sector is certainly growing, and the need for brewers to differentiate and produce world-class, high-quality beer is more important than ever.”