Keynote Bob Pease, President & CEO of the Brewers Association

Hear details about the United States craft beer market and what that might portend for Europe in Bob’s talk on The Power of Craft Brewing.

Transcript

1. The Power of Craft Brewing Bob Pease | President and CEO | Brewers Association | @BobPease 1
2. Agenda •  Who is the Brewers Association? •  Overview of the U.S. Beer Market •  Beercations and tourism from beer 2
3. Brewers Association Boulder, Colorado 3 Brewers Associa,on is…
4. Brewers Association - Boulder, Colorado 4
5. Brewers Association Membership
 •  3,500+ U.S. Breweries •  Retailers, Wholesalers, Allied Trade and Homebrewers 5
6. U.S. Craft Brewer Defined
 • Small • Independent • Tradi/onal 99% of today’s 5,200+ U.S. breweries 6
7. North American Beer Market 7
8. U.S. Beverage Alcohol Sales
 2015 Category Sales Beer* $105.9B Spirits $69B Wine >$50B (2015) *$22.3B for Small and Independent CraC Brewers (S&I) 8
9. These Are Historic Beer Times!
 • 1978 = 42 brewing companies • 2017 = ~5,200 • Tens of thousands beer labels • U.S. = Most diverse beer market 9
10. Sales Share Sub Category Value % Change Volume % Change Avg Price per 288 oz case Value Volume 100.0% 100.0% Ttl Beer/FMB/Ciders 3.5% 0.8% $23.03 38.3 43.0 Premium -0.1% -1.4% $20.52 15.0 21.8 Below Premium -1.7% -2.1% $15.83 18.0 14.0 Imports 10.3% 8.1% $29.64 11.3 8.9 --Mexico 15.6% 12.9% $29.23 1.2 0.7 --Belgium 12.2% 12.9% $38.62 13.1 8.3 CraCs 10.8% 7.0% $36.17 6.7 4.8 FMBs 6.3% 5.1% $32.36 6.1 5.3 DM Super Premium 8.9% 8.1% $26.48 1.3 0.8 Ciders -5.4% -8.4% $36.70 Sales of Beer and Malt Beverages by Segment in the U.S. (Grocery+Mass Channel) Source: Nielsen ScanTrack Total Outlet, First half of 2016 10
11. 11 0 1000 2000 3000 4000 5000 6000 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Number of Ac/ve Breweries, Jan 2012- Jan 2017 (est.)
12. 2015 U.S. Barrel Sales S&I Cra[ Brewers Imports U.S. Non- cra[ Total 24 M 31 M 141 M 196 M Brewpubs 1.28 M 9.8% Microbreweries 3.93 M 24.2% Regional CraC Brewers 19 M 11.3% 2015 growth Overall Beer Down .2% S&I Up 12.8% 99% (4,600) 12
13. Brewers By Size of Tax Paid Withdraws 2015 2015 Share Share Volume in Barrels (31 gallons) Brewery Count Tax Paid Volume Brewery Count Tax Paid Volume <1 566 94,127 11.7% 0% 1 - 1,000 3,097 772,833 64.2% 0.4% 1,001 - 7,500 812 1,900,256 16.8% 1.1% Small Breweries 4,475 2,767,216 92.8% 1.6% 7,501 - 15,000 122 1,095,981 2.5% 0.6% 15,001 - 30,000 70 1,310,825 1.5% 0.7% 30,001 - 60,000 54 2,110,725 1.1% 1.2% Medium Breweries 246 4,517,531 5.1% 2.6% 60,001 - 100,000 21 1,393,286 0.4% 0.8% 100,001 - 1,999,999 61 18,918,396 1.3% 10.8% Large Breweies 82 20,311,682 1.7% 11.6% 2,000,000 - 6,000,000 6 23,102,416 0.1% 13.2% 6,000,001 plus 15 124,544,161 0.3% 71.1% Extra Large Breweries 21 147,646,577 0.4% 84.3% Total Breweries 4,824 175,243,006 100.0% 100.0% Source: U.S. TTB, April 2016. Total Industry Volumes By Size
 CY 2015 13
14. 14 U.S. Beer Domes/c Imports Cra[ US Shipments All figures in ‘000s of bbls (1 bbl = 31 gallons) 1981 177,000 5,221 35 182,290 2016 144,500 33,366 25,200 207,100 Change -28,500 28,145 25,165 24,810
15. U.S. Sales By Channel S&I Cra[ Brewer Overall Beer On-premise 28% 18% Off-premise 65% 82% At The Source 7% <1% 2015 Es_mates-Brewers Associa_on 15
16. Sales By Package Type
 S&I * Overall Beer** Bo`les 60% 34% Draught 30% 10% Cans 10% 55% *2014 Brewers Associa_on Brewery Opera?ons Benchmarking Survey (BOBS) **NBWA 2016 16
17. Market Statistics
 • U.S. Craft in 2016 • Approaching 13% volume share • Growing ~7% nationally 17
18. 18 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Cra[ Domes/c Barrel Addi/ons, 2007-2016
19. •  We applaud the nearly 1,800 breweries in the U.K. •  There are more than 100 EDP BA members. •  30 estimated are active in the U.K. •  Events include: Craft Beer Rising in London, Bieres Sans Frontiere bottled beer bar at Great British Beer Festival (13 years strong). •  Numerous tastings with our Craft Beer Ambassador •  We host beer and food pairing dinners. •  We frequently communicate with U.K. media: •  To be added to our database: BrewersAssociation.org Brewers Association
 Export Development 19
20. Who Is The U.S. Lover? 20
21. Total Beer vs Craft Age Breakdown
 U.S. CRAFTS (incl DM SPECIALTY) – AGE/GENERATIONS; Index to % Adults Source: Nielsen Spectra /Simmons (Data Version: Sept 2014); on plus off-premise AGE 21+ % Adults TTL BEER CRAFT* % Volume Index % Volume Index 21-34 25.6% 35.1% 137 35.5% 138 35-44 18.0% 20.7% 115 24.3% 135 45-64 37.1% 33.3% 90 31.6% 85 65+ 19.2% 10.8% 56 8.6% 45 >120 <80 20
22. Gender of U.S. Beer Lovers 74% Male 26% Female Source: 2015 U.S. Yankelovich MONITOR survey, which tapped more than 10,000 respondents 22
24. Tourism 24
26. Tourism and Beer •  More than 7 percent of craft sales (by volume) now happen at the source—
 the brewery. •  Craft brewers are now a main attraction for travelers. •  2015, the Great American Beer Festival generated the equivalent of 2 percent of Denver’s GDP, accounting for $28.6 million. •  Beer tourism is so strong that travel website Travelocity just published a beer tourism index. 26
27. 53.0% 27.2% 9.1% 6.8% 4.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 0 1 or 2 3 to 5 6 to 9 10+ How many, if any, craft breweries have you visited while traveling in the past 12 months? Source: Nielsen CraC Insights Panel (June 6-13, 2016) 27
28. After your visit(s) to a craft brewery, which of the following describe how, if at all, your purchasing habits of that craft brewer’s products changed? 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Daily More than Weekly Weekly More than Monthly Monthly A few Times a Year Purchased a lifle or a lot more of that cra[ brewers products 28
29. Beer Visits And Tourism • >10M people toured craft breweries (2014) • Richmond, Asheville, Columbus, Orlando and many other U.S. 
 cities working hard to attract 
 craft brewers. 29
30. >3/4 said, “would like to go on a trip where they visited craft breweries and sampled local beer”. Top 6 Large Metro Areas Top 6 Small Metro Areas 1) Portland-Vancouver-Beaverton, OR-WA 1) Bend, OR 2) Denver-Aurora, CO 2) Boulder, CO 3) Seattle-Tacoma-Bellevue, WA 3) Fort Collins-Loveland, CO 4) Portland-South Portland-Biddeford, ME 4) Corvallis, OR 5) Colorado Springs, CO 5) Missoula, MT 6) Santa Rosa-Petaluma, CA 6) Burlington-South Burlington, VT Travelocity survey of 1,003 people (2016) 30
31. Too Many Breweries? • Nearly 1,000 cities with a population of more than 10,000 don't have a local brewery YET. 31
33. Guild Support 36
36. The Importance of Beer Media 36
37. •Facebook=Almost 100% •Twifer=91% •Instagram=70% •LinkedIn= ): 6% U.S. Craft Brewers And Social Media Source: Brewery Opera_on Benchmarking Survey 2014 37
38. India Pale Ale • American IPA • English IPA • India Pale Lager • Session IPA • White IPA • Black IPA • Red IPA • Brown IPA • West Coast IPA • New England IPA • Belgian IPA • Fruit/Veggie/Spiced • Rye IPA • Double/Imperial IPA 38
39. The image cannot be displayed. Your computer may not have enough memory to open the image, or the image may have been corrupted. Restart your computer, and then open the file again. If the red x still appears, you may have to delete the image and then insert it again. What We Want •  Fair access to market for all U.S. breweries •  No one brewery owner should become the “one stop shop” for beer •  “Consumer choice, not producer power, should determine what beers go on the truck.” - Senator Klobuchar (MN) 39
43. Questions? @BobPease | Brewers Association, Boulder, Colorado 43