From members of Congress to state legislators, attorneys generals, regulators and the media, beer distributors across the country are hosting warehouse visits to showcase their critical role in the independent distribution system.

To schedule a behind-the scenes look at a beer distribution warehouse in your community, please contact NBWA Manager, Grassroots & Political Affairs Kate Beaulieu at kbeaulieu@nbwa.org

If you are a distributor who has hosted a warehouse visit, please share details of your visit with NBWA by completing the feedback form.

Tools for Beer Distribution Employees

“Six-Pack” of Warehouse Visit Tips

• Instructional Video - Warehouse Tours: Showing the Value of Beer Distributors 

 

To Fight Flagship Fatigue, Sierra Nevada Will Introduce Pale Ale and Torpedo Line Extensions

With more than 1,000 beer companies now selling upwards of 7,500 different packages in the food channel alone, according to Sierra’s director of sales, Joe Whitney, larger and more established craft entities like Sierra Nevada have found it more difficult to grow sales of their higher volume offerings. In response, Sierra Nevada will be introducing a pair of line extensions the company hopes will breathe life back into their flagship counterparts while simultaneously bringing “more growth to the craft segment," according to Whitney.

MillerCoors Taps Philadelphia Agency for High Life Help

MillerCoors has made agency changes on its economy beer brands, including parting ways with Publicis Groupe's Leo Burnett on the Miller High Life creative account. Leo Burnett's shopper marketing agency, known as Arc, will continue to support High Life. But Philadelphia-based Quaker City Mercantile has won an assignment to lead creative and digital strategy for the brand. MillerCoors has also assigned roster agency Mekanism to its Keystone Light brand, which had not been using a creative agency of late.

You Can Now Drink George Washington's Favorite Beer

What do the years 1757 and 2016 have in common? A beer recipe, of course. Patchogue, New York-based Blue Point Brewing Company has made 30 barrels of “Colonial Ale”—a recipe the brew masters claim to have gotten from George Washington. The brewery says that Washington originally wrote down the recipe in 1757 when he was a young colonel in the Virginia Regiment militia, making it about 260 years old.

Senate Moves Closer on Budget Bill Despite Divisions

A behind-the-scenes congressional battle to avoid a U.S. government shutdown broke into public view when Republicans produced a stop-gap funding bill that Democrats immediately rejected. The federal fiscal year ends on September 30, and Congress must pass a spending measure by then to keep the government open. In recent years, lawmakers have seldom been able to agree on a full federal budget and instead have relied on stop-gap measures.

Gluten-Free Beers to Try

Some of the most interesting beers out there now are entirely gluten-free. Built on flavorful bases of millet, sorghum and more, they rate regardless of dietary dictates. The Wall Street Journal gives a few different gluten-free beers to try.

U.S. Consumer Comfort Gauge Falls to Lowest Since Mid-December

Consumer confidence fell last week to the lowest point since mid-December as Americans’ views of their financial situations and the buying climate deteriorated, according to figures from the Bloomberg Consumer Comfort Index. Less optimism about the economy’s prospects and declining confidence about household finances and whether it’s a good time to spend indicate consumers won’t be as free-spending as they were in the second quarter.

 

Industry Trends

The U.S malt beverage industry grew by an estimated 14.4 million cases in the first half of 2016, for a solid 1 percent increase.  Growth was driven by imports from Mexico and marginal improvement in domestic trends from increasing share of high-end specialty beverages. Domestic volumes were up against easy 2015 first half comps when domestic tax paid fell almost 1.5 percent.  For year-to-date June 2016, the domestic trend is running down less than 3 million cases for a 0.2 percent drop. This is a marked improvement over past years and a good sign moving into the second half of 2016.

From a beer package perspective, canned beer continues to drive industry growth, posting a 2.7 percent increase. Both imports and domestic can volumes grew in the first half of 2016, pushing this segment’s share to 56 percent share. Note that the volume added by domestic can business was more than three times greater than imports. Craft and other specialty beverages have successfully adopted the can package in the high-end segment – even the wine industry is hopping on board and finding opportunities. Total bottle volume was down 0.8 percent to 43 percent share. Import volumes grew by 9.1 percent but could not compensate for the larger domestic bottle share decline of 5 percent. Draft beer in both domestic and imported segments reported less volume but continues to maintain the 10 share.

Overall, there are continued signs of progress for the beer market. The six-month trend at 1 percent is slightly higher than the running 12-month moving average of 0.8 percent. In both cases, these trends indicate the industry has the potential to maintain per capita consumption levels against wine and liquor in 2016. However, the second half comps may prove a challenge with July Domestic Tax Paid from the Beer Institute and import data from the U.S. Department of Commerce reporting slower trends that bring the seven-month year-to-date trend closer to 0.5 percent. But then a strong August Tax Paid at +3.3 percent tapers the July declines. Moreover, with so many small brewers reporting on a quarterly basis, revisions to the Domestic Tax Paid volumes will certainly be greater than in years past. The industry will continue to see wide ranging fluctuations in short term trends; however, the fundamentals backing a positive full year of volume growth remain likely.

Macro-Economic Trends – Employment and Wages

The current business cycle continues into its seventh year of expansion, and the U.S. economy continues to add jobs. Growth is at a much slower pace than anticipated, and there is very little upward pressure on wages. However, the economy has added more than 1.3 million jobs in the past seven months.

With growth there has come a structural shift. Over the past six years, more than 90 percent of new jobs have been in the service sector and, more importantly, around the country job creation in metropolitan areas continues to outpace rural areas. This has left traditional good producing areas and their beer drinkers in many rural parts of the country on the sidelines of the economic recovery. On the wage front, nominal average weekly wages of $876 per week has increased 1.3 percent in 2016. This is only slightly ahead of the Consumer Price Index inflation measure, currently running at 0.8 percent on a 12-month seasonally adjusted basis. On a year over year basis, since the end of the recession, wage earners and employers have experienced little upward pressure from a slowly expanding economy and growing employment.

Demographic Shifts Transform the Industry

Demographics are changing the U.S. beer business in many ways. More than 73 percent of the population is now over 21 years of age, and the majority of the millennial population (defined as 18 to 35 year-olds) have now turned 21. At the same time, average household size and birth rates are at all-time lows. Even home ownership rates are at all-time lows despite historically low mortgages rates. According to recent U.S. Census data, home ownership rates are now below 63 percent and are at the lowest recorded rates since 1995. The beer industry is in fact facing a very different demographic than just a few years ago. When, where and how consumers purchase alcohol beverages is transforming the marketplace. This shift is creating challenges and great opportunities for brewers, distributors and retailers.

These demographic impacts are most evident in traditional on-premise accounts. Data from the Bureau of Labor Statistics show that the number of “drinking establishments” – bars and taverns that primarily serve alcohol for their revenue – has fallen consistently since 2010, and there are now absolutely fewer establishments in this category despite a growing economy. However, over the same period of time, there has been a marked increase in the number of nontraditional (blended on- and off-premise) establishments where people can purchase and/or consume alcohol. For example, in California, recent legislation will allow more than 40,000 barbershops and beauty salons to serve limited amounts of alcohol beverages without an alcohol license. Additionally, grocery stores around the country (where permitted) have added on-premise alcohol beverage sales that also may include take-home growler (draft) sales. Even the zoo industry is getting into the business. The “Watering Hole” at the Philadelphia Zoo and “Zoo Brew” at the San Diego Zoo now offer patrons on-premise alcohol beverage options. This trend continues into farmer’s markets and open-air festivals around the country now including on-premise consumption, with some offering take-home purchases as well.

Within the industry, brewery beer gardens, taprooms and brewpubs all function as blended on-off premise establishments and are now part of many small, medium, large and even globally owned breweries' business plans. In fact, the tax determined beer business is the fastest growing measured segment in the beer industry. Tax determined is a little known segment in the industry that includes beer brewed and served directly to consumers from serving tanks. Historically, this segment accounted for less than 0.5 percent of total industry volumes; however, in late 2014, this segment took off on an exponential growth curve and has quadrupled its reported quarterly volumes in just a few years.  With continued trends, the tax determined segment may soon be a significant part of industry volumes. These small volumes also are reported on a quarterly basis and tend to be subject to the largest revisions in the TTB Domestic Tax Paid data.

With evolving demographics and a redefined economy, many new opportunities are in the future for brewers, distributors, retailers and beer consumers. More importantly, a new and vibrant direct-to-consumer segment is rapidly growing within the industry and creating a retail channel that will prove difficult to measure and track. Remember that this is a blended, on- and off-premise retail channel that is not tracked in the syndicated data services and not typically part of the three-tier system. Locally oriented beer distributors, with frontline market insights, will be best suited to work with their brewer and retailer partners to succeed in tomorrow’s rapidly changing beer industry.

Media Contact: Kathleen Joyce

kjoyce@nbwa.org; (800) 300-6417

Beer Route| Sep 23, 2016

2016 Annual Convention Beer Route CoverRead the 2016 Annual Convention issue, which provides a look at the activities of the National Beer Wholesaler Association and accomplishments of beer distributors from coast to coast.

Learn about what's happening in Congress; read about members of Congress visiting beer distribution warehouses and get an economic update on the beer industry.

Read about NBWA's Fourth Annual Next Generation Success in Leadership Conference. Find out how beer distributors like 7G Distributing are utilizing public affairs initiatives to advocate for and promote the beer distribution industry, and learn about safety training videos that NBWA offers to members!

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