BMTC19: Welcome from Julia Herz of the Brewers Association

Welcome from Julia Herz of the Brewers Association: Julia provides a high-energy, fact-intensive overview of the current state of the beer industry with a specific focus on marketing and tourism. Not to be missed.

1. 3/29/2019 1 Breweries Beer and… Tourism Julia Herz Craft Beer Program Director @HerzMuses / @brewersassoc 1 2
2. 3/29/2019 2 Craft Maltsters Guild Member Malt Houses https://craftmalting.com Idaho and Hops 43 As of 2018: • Idaho surpassed Oregon as #2 hop producing state • #2 in acreage 3 4
3. 3/29/2019 3 85% of Legal Drinking Adults Live Within 10 Miles of a Brewery 5 6
4. 3/29/2019 4 29% 43% 27% 42% 40% 19% Top 2 Box Somewhat Important Not Important Craft Drinker Weekly “LOCAL” PARTICULARLY IMPORTANT TO MORE FREQUENT CRAFT BEER DRINKERS Source: Nielsen's Craft Beer Insights Poll (CIP) conducted May 2018 by Harris Poll (n=1,008 Craft Drinkers; n=416 weekly craft drinkers) Q: How important is “local” (i.e. a product being made locally made) to you? 21-44: 46% South: 51% 37% 53% 20% 49% 35% 16% 0% 10% 20% 30% 40% 50% 60% 0 1-4 5+ Number of Visits (last 12 months) A Majority of Craft Drinkers Visited a Brewery Last Year Near Home While Travelling 50 Million Craft Drinkers Average 6 brewery visits a year 2 pints a visit 7 8
5. 3/29/2019 5 Winery Tour Brewery Tour 9 10
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8. 3/29/2019 8 2019 BOD The Breweries Set the Stage Independent Craft Brewer Seal • #SeekTheSeal • 4,200+ Craft Breweries • 86% of the volume of craft beer SupportIndependentBeer.com 15 16
9. 3/29/2019 9 U.S. Beer Market Brewersassociation.org/WorkingGroup Alcoholic Beverage Sales Category Sales in billions BEER* $111.46 SPIRITS <$80 (estimated) WINE $62.7 US MARKET-2017 *$26B for Small and Independent Craft Brewers 17 18
10. 3/29/2019 10 0 1000 2000 3000 4000 5000 6000 7000 8000 1873 1876 1879 1882 1885 1888 1891 1894 1897 1900 1903 1906 1909 1912 1915 1918 1932 1935 1938 1941 1944 1947 1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 Number of Breweries, 1873 - 2018 Sources: Brewers Assocication and Beer Institute Domestic Imports US Shipments All figures in ‘000s of bbls (1 bbl = 31 gallons) 1985 175,876 7,916 75 183,567 2017 136,982 34,428 24,868 196,278 Change -38,894 26,512 24,893 12,711 19 20
11. 3/29/2019 11 The U.S. Beer Market by Volume • Big 2 = 67% • Imports = 17% (estimated) • Craft = <13% • Others = 3% (estimated) from Pabst 3 share, + others 2017 6 7 12 13 15 17 18 12 6 5 4 0 2 4 6 8 10 12 14 16 18 20 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (est) Craft Production Growth Rate 21 22
12. 3/29/2019 12 Total U.S. Alcohol Beverage Permits Grow Across All Segments 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 U.S. Brewery Permits 0 1,000 2,000 3,000 2010 2011 2012 2013 2014 2015 2016 2017 U.S. Distillery Permits 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 U.S. Winery Permits More than 15,000 new permitted alcohol suppliers in U.S. Majority in past eight years: 2010 = <10,000 2018 = >25,000 Source: U.S. TTB 2018. Homebrewing in U.S. • 1.1M+ U.S. homebrewers • More than 1.4M barrels of beer a year • 1,700+ Clubs • 700+ Retailers • BJCP Competitions 724 in 2017 vs. 192 in 2003 • 46,000 members of AHA HomebrewersAssociation.org 24 23 24
13. 3/29/2019 13 Economic Contributions of Craft Brewers • $67.8 billion • Up 21.7% from 2014 • 456,373 jobs (3-tiers) • Up 7.5% from 2014 • 135,000 full/part time (direct-2017) 9 TODAY… 25 26
14. 3/29/2019 14 Promote 28 Comfort leads to confidence Confidence leads to sales. The Realtor Model of Marketing 27 28
15. 3/29/2019 15 Word Of Mouth • The highest value! • How do you speak to your champions? • How do you speak to those new to you? • What do your customers say about you? Opportunities •Logo •Press Releases •External Communications •Labels •Tag Line 29 30
16. 3/29/2019 16 Opportunities •Tag Line: What is it? •Do your customers say it? •Does it get pick up? Who is the Craft Beer Lover? 31 32
17. 3/29/2019 17 MORE & MORE OF THE ADULT POPULATION IS DRINKING CRAFT BEER – GENDER GAP STILL BIG, BUT SHRINKING a BIT • Source: 35% 37% 38% 40% 2015 2016 2017 2018 Percentage of Craft Beer Drinkers Among 21+ Pop’n (Several times a year or more often) Male 46% 48% 50% 49% Female 25% 26% 27% 31% 33 34
18. 3/29/2019 18 Language Matters …he …him …guys If we think of females and diverse adults as beer lovers we will bring them in as beer lovers. 24 35 36
19. 3/29/2019 19 Thank You Julia Herz Craft Beer Program Director @HerzMuses 37 38