The Beer Boom
Summer’s Hot for Beer – An Op-Ed
by Emmanuel Bates
There have been many lessons to learn from the Covid-19 Pandemic. On the one hand, you get to see how certain politicians, lawmakers, and city officials react in real-time to times of crisis. On the other hand, with bars and restaurants being closed, cabin fever started to set in, and you began to long for the days of simply meeting up with friends at the local bar, pregame before sporting events, or even patio beers on a hot summer day. For my fellow extroverts out there, Zoom and House Party could only do so much; we missed seeing our friends, our family, or even having a beer with a complete stranger at the bar.
With the US Government pushing for 70% vaccination rates in the country for adults, according to CDC data, as of May 2021, there are 114,395,675 (44.3%) fully vaccinated citizens over the age of 18 in the United States with 150,354,051 citizens with at least one dose. Assuming that a good percent of fully vaccinated adults are social drinkers, I think the beer industry will have the most prominent summer since prohibition ended.
January 17th, 1920, was the beginning of the United States’ 13-year ban on alcohol sales. Out of the 1,300 breweries in operation since 1915, less than 100 survived by the end of prohibition; names like Anheuser-Busch (AB), Pabst, Miller, Coors, and Yuengling were able to make it through. At the start of the ban, many companies thought that the key to survival was switching to non-alcoholic options (less than 0.5%), but that’s not what the beer consumer wanted.
If you consider the rise of bootlegging and speakeasies during that time, the beer industry was almost extinct. Most brewers in that time expected the ban to last no more than a couple of years, not over a decade. Brewers were adapting to the times by switching over to Producing malt syrup and yeast to survive, which would probably be today’s equivalent of breweries producing hand sanitizer.
AB created a non-alcoholic cereal beverage called “Bevo.” Bevo was advertised as “the all-year-round soft drink” and cost about $.10 a bottle. Coors became one of the leading producers of malted milk and later got into ceramics. Coors produced things like tea sets, all the way to spark plugs. Miller also got into the malted milk and syrup game, becoming a major producer of soft drinks. Pabst started producing parts for Harley-Davidson, then shortly after got into cheese until eventually selling the line to Kraft.
Yuengling got into ice cream, which became extremely popular. After prohibition, Yuengling was purchased by Pabst and was rebranded as Strohl’s, a beer and ice cream company based in my hometown of Detroit, Michigan. It was debunked in 1985 and rebranded as Yuengling ice cream in 2014. Strohl’s ice cream is also still around to this day. Prohibition ended December 5th, 1933, and brewers were free to brew while consumers were free to purchase and drink alcoholic beverages once again.
According to the Brewers Association, “in 2020, the overall beer industry took a 3% hit in volume. The retail dollar volume was valued at $22.2 billion, representing 23.6% of the market share and a 22% decrease since 2019. The availability of jobs in the craft beer industry was also hit with a 14% decrease since 2019, just north of 138,000 available positions in the industry.
“2020 was obviously a challenging year for many small brewers, but also one that proved their resilient and entrepreneurial nature,” said Bart Watson, chief economist of the Brewers Association. “In a year where U.S. draught sales were down more than 40%, small brewers found new ways to connect with their customers and keep their businesses running,” Watson continued. In 2020, there were 23.1 million barrels of beer produced, and roughly over 22 million Barrels sold between taproom, on-premise, and off-premise distribution, which is a lot of liquid, declined from the 26.3 million brewed in 2019.
To compare, I also wanted to look at numbers for the spirits industry in 2020. No surprise, the numbers were up across the board. One interesting number I saw was that the Low and No alcohol spirits rose to a 32.7% increase in 2020, raising its share up 3% of the total alcohol market in 2020. According to Forbes, the overall supplier sales of spirits were up 7.7% for a total of $31.2 billion; total alcohol sales grew by 3%. Off-premise sales were up 18% in 2020, while on-premise dropped to 44%, primarily due to the pandemic. According to the U.S. Bureau of Labor Statistics, as of December 2020, 2.3 million jobs have not been recovered. With 36% of craft distilleries reporting a total revenue decline of 25% or more in 2020.
Another factor that may have contributed to the decline in beer sales is the rise of the cannabis industry. It’s no secret that in states where cannabis is legal, marijuana sales volume substantially increased during the pandemic. There are 48 states currently with, at least, medical legalization; of that, in an article published by spokesman-review, binge drinking sessions were down 9% of the 16 states where recreational cannabis consumption is legal. According to Fortune, medical and recreational sales of marijuana in 2020 have increased 71% from 2019. Going by current consumer trends, the cannabis industry is projected to hit $41.5 Billion by 2025.
These numbers tell me several different things. One is that liquor stores and dispensaries, especially in heavily populated areas, are making a killing. To be fair, it isn’t an equal comparison of the cannabis industry’s numbers to the craft beer industry’s numbers because not everyone who consumes cannabis consumes alcohol and vice versa. Another thing is that with the pandemic still in play, a significant reason for the dip in craft beer is staffing. Like most businesses, one of the most important assets a company can have is suitable staffing. This industry, like most, can’t survive, let alone grow without good people in the taprooms.
We need good people to brew beer, sell beer and distribute beer. The number Of jobs in the industry decreased with taprooms being closed. According to Brewers Association data, 343 craft breweries closed their doors last year due to the pandemic. In December 2020, the craft beer industry is projected to see a 6-7% growth in 2021 but would still see a decline compared to the 2019 pre-pandemic numbers. However, there is a silver lining. 716 craft breweries opened their doors last year, many of which have creatively made outdoor patio space and self-distribution services to transport beer to customers who can’t make it to the taprooms.
My take is that this industry is on track for a complete market boom. With the vaccination rates holding steady, states starting to loosen up on Covid-19 restrictions, and overall more people itching to get out, I think this industry will thrive in Summer 2021 and for the rest of the year. According to Brew Bound, off-premise craft beer sales have increased 6% in quarter one of 2021, maintaining a “moderate growth” in sales. In my opinion, I think more craft breweries are adjusting to the times. Self-distribution is a significant way to get beer directly to consumers, who may still be uncomfortable going into taprooms. Innovation is another excellent way to adapt; what is this brewery doing differently to account for the times we’re in?
So far, there have been numerous trends in beer styles in 2021. According to BevSource, Seltzers still hold firm, and to be honest, it doesn’t look like they’re going anywhere, anytime soon. Easy drinking (sessionable) beers like Lagers have been trending high during the pandemic. The beer consumer who may be new to the world of craft beer would tend to go for a more familiar style than, let’s say, something not as easy on the pallet like a Sour beer. Since we’re on Sour beers, this style has been trending high; according to the Brewers Association, sales of Sour beers have increased by 25% during the pandemic.
Certain beers, such as Urban Artifact’s “The Gadget,” have been trending well among craft beer consumers. As I stated in a previous article, Americans love our hops; we’re hop crazy and will continue to experiment with different variations of the IPA. Milkshake IPA, Sour IPA, Hazy/New England are still going strong. New England style, such as Eastern Market Brewing’s Elephant Juice, is one I’d personally recommend.
We’re in a time where the United States unemployment rate was up to 14.7% in April 2020, the highest since January 1948. The thing is, in a global pandemic, we’re all directly affected. Some industries and individuals made out better than others, some people have luckily been employed during the whole pandemic, and some are still relying on unemployment to get by. There’s a chance that you, the reader, may know someone struggling to get by and waiting on government assistance. With 716 new breweries opening up in the US, there will be a need for more cellar people, beer-tenders, brewers, sales representatives, and many other positions across the country. Now is as good a time as any to begin a career in the beer industry!
If the demand rises as the supply falls, it could be detrimental to the industry with a lack of staffing. For the sake of keeping the industry thriving, make sure to share any job listing you may find with someone who may be looking. As we near the probable beer boom this summer, we should reflect on how far this industry has progressed. The future of craft beer looks bright and has made strides to becoming a more inclusive environment for beer enthusiasts as well as casual beer drinkers of all backgrounds. Beer is for Everyone is based around inclusiveness in the craft beer industry. I wouldn’t be using my platform correctly if I went without saying there are many opportunities in this industry for people who look like me and for those who don’t, because Beer is for Everyone (of age).
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