Is the pint glass half full or half empty?

The TTB (Tax and Trade Office) beer data for the first half of 2020 is neither bad nor good for craft beer, it is what it is. Larger brewers have seen varying degrees of reduced demand in the first half of 2020, but the craft beer sector is somewhat stable. Nothing is perfect and many of the feelings about the environment today are subject to opinion. Obviously, curbside delivery is not considered a solution for Covid19.

The TTB only reports data on tax revenues derived from the production of spirits, wine and beer; but we are only interested in beer at the moment. Consumers’ tastes change from time to time in relation to the drink they choose. This only adds to the complexity of understanding the data. For example, hard ciders and sodas have caught the attention of younger adults and this has an impact on craft beer.

Currently, Covid19 has taken center stage by forcing the craft beer industry to cut costs, delay some new product plans, thoughts on expanding the market, packaging options, and on-site and off-site marketing strategies. The impact of Covid19 began to be felt in the craft beer industry in February 2020. The fact is, the craft industry is always faced with market changes, but the impact of the virus is a once-in-100-year disaster. world scale.

The TTB does not define or report beer production at the market segment level, i.e. craft beer, brewery, etc. Its statute is to collect taxes on beer that comes out of a brewery based on ABV. We will analyze the production reported by the TTB based on the size categories of the barrel production. Although some changes were noticed in the market in early 2019, Covid19 has had a major impact on the economic health of the craft beer industry.

Statista reports that The Boston Beer Company produced 5.31 million barrels of beer in 2019. That compares to Miller / Molson / Coors’ 2019 production of 50 million domestic barrels. “Keep in mind that Anheuser-Busch today represents 49% of the US market. To put that in perspective, of the 6,400 breweries in the United States, 95% produce fewer than 15,000 barrels of beer a year,” says the Dr. Bart Watson, PhD. – Chief Economist of the Brewers Association.

For the craft beer consumer, macroeconomic data is only important as a starting point to assess what’s happening to our favorite beer. “Today, the majority of US craft beer consumers live within a 10-mile radius of a local brewery,” says Dr. Watson. This is important because it shows how important the health of the craft beer industry is to communities and consumers.

So what does the TTB production data indicate for 2019 compared to 2018 and the first half of 2020 and 2019?

Total beer production in the first half of 2020 vs. 2019 was 88.3 million barrels and 91.6 million barrels, respectively. That represents a -3.6% loss in beer production in the first half of 2020 compared to 2019. However, the data for the first half of 2019 vs. 2018 shows a -4.4% decrease in production. This indicates a decrease in barrel production that started in early 2019.

Some analysts point out that barrel sales are declining, indicating the impact of Covid19; This is true as most kegs go to on-site beer drinking spots. Barrel sales in the first half of 2020 fell 52%. Sales of bottles / cans increased 3.1%. (Data is based on comparable barrel volumes: 31 gallons per barrel). Source: TTB-Tax and Trade Bureau. Barrel sales in the first half of 2018 vs 2019 were 7.5 million barrels and 8.1 million respectively: a slight increase.

Now let’s analyze the market segmented by barrel production. In 2019, American brewers produced a total of 180 million barrels of beer. In 2018 the total production was 183 million barrels with 7% fewer breweries. A mild recession.

All of the US brewers producing more than 6 million barrels a year had a -4% drop in production and accounted for about 70% of total US production. The 6 million plus segment included 15 of the largest producers.

The Brewers Association reports that 95% of breweries in the US produce less than 15,000 barrels a year. Numerically that’s 5,947 of the 6,400 breweries in total. This segment produced 6.2 million barrels in total in 2019. For perspective, compare that to the 5.31 million barrels attributed to The Boston Beer Company alone. Interestingly, this segment registered a + 4% increase in production in 2019 compared to 2018. Most of that increase can be attributed to the number of producers in the 1 to 15,000 barrel category that had a 7% increase in the breweries.

Without a doubt, the Covid19 virus has had an impact on the craft beer industry, but not as much as some macrobrewers have realized. Some have had a reduction of about 4% overall, but they are not in the ‘craft’ category. Data from the full year will tell a better story. Logic would tell us that the brewery segment of the industry has been the most affected. For example, 25% of your product is purchased and consumed on the premises.

The jury is still out on how badly the economic and lifestyle environment has impacted the craft beer industry, but people still want the quality that is most easily displayed in craft beer. Brandon Gaille reported research in late 2019 noting that 94% of beer consumers buy craft beer because of taste and 83% were interested in craft beer as well. Consumers. This indicates that a certain level of research and understanding of the product is required to understand craft beer.

Health!