Beer is a powerhouse that ‘serves America’
Report claims economic impact across the state is more than $6.6B.
The beer industry is no slouch.
The industry’s economic contributions were released in the Beer Serves America study last week by the Beer Institute and National Beer Wholesalers Association. John Dunham & Associates conducted the study. Information was collected from private companies, Dun & Bradstreet, the U.S. Bureau of Labor Statistics, the Alcohol Tobacco Tax and Trade Bureau and the U.S. Bureau of Economic Analysis.
The study broke down beer’s contributions by state and congressional district, including $6.6 billion for Michigan in beer-related economic output.
As a national industry, beer contributes $252.6 billion in economic output, equal to approximately 1.5 percent of the nation’s GDP. Included in the contribution is more than $48.5 billion in tax revenues at the federal and state levels.
“It can be said that beer truly serves America. Beer is more than our nation’s favorite adult drink. It is a powerhouse in job creation, commercial activity and tax revenue,” said Jim McGreevy, president and CEO of the Beer Institute.
Nationwide, brewers provided 49,576 people with jobs in 2014, an increase of more than 5,800 people since 2012. Fifty-six percent of those jobs were attributed to major brewers such as Anheuser-Busch and MillerCoors. Regional brewers such as Sierra Nevada, New Belgium Brewing Co. and Founders Brewing Co. provided 5,370 people with jobs.
Aside from major brewers, the largest segment of jobs was in the microbrewery segment — including West Michigan companies such as Brewery Vivant, Rockford Brewing Co. and Mitten Brewing Co. — where businesses employ more than 10,000 people.
Beer retail jobs are down from an estimated 903,500 employees in 2012 to slightly more than 805,000 people this year. The report cited a variety of reasons, including the 2007-09 recession that affected retail employment overall, and the smaller volumes of higher-priced beers being purchased.
Distributor jobs increased 20 percent in the past decade, to more than 131,307 last year.
“America’s licensed beer distributors are proud to provide more than 130,000 direct jobs with solid wages and great benefits to employees at more than 3,300 facilities, located in every state and congressional district across the country,” said Craig Purser, National Beer Wholesalers Association president and CEO.
“These independent beer distributors provide significant economic benefits in their communities through local business-to-business commerce, investments in local infrastructure and capital assets and tax revenue. They provide services that improve efficiency for trading partners, especially small brewers and retailers, and they ensure fair prices and a broad selection of products for consumers to enjoy.”
Each job in the brewing industry generates 34 full-time equivalent jobs, according to the report. The jobs created include 2.65 in wholesaling, 16.25 in retail, 1.45 in manufacturing and 1.22 in farming.
The study found there are 1.75 million people working in jobs in direct, supplier or induced industries. Those jobs paid more than $78 billion in wages in 2014.
In Michigan, brewing provided 1,152 people with jobs in 2014, paying out $51.1 million in wages and generating $346,287,500 in economic output.
More than 58,673 jobs were related to beer in Michigan in 2014, according to the study, generating $6.6 billion in output. The impact includes the agriculture, mining, construction, real estate, manufacturing, retail, transportation, travel, entertainment and wholesale industries.
Beer also paid more than $836 million in federal, state and local business and personal taxes in Michigan, and another $320 million in consumption taxes.
In Michigan’s 3rd Congressional District, which includes Grand Rapids, brewing provided 183 jobs paying $8 million in wages and generating $54.9 million in economic activity. Direct economic impact — including wholesaling and retail — sustained 2,726 jobs paying $78 million in wages and generating $220 million in economic activity.
With direct, supplier and induced activity, beer provided 4,366 people with jobs in the Grand Rapids area and $510 million in economic output.
In addition to the Beer Serves America study, the Brewers Association released its mid-year report on the U.S. craft-brewing industry last week.
The Brewers Association represents small, independent and traditional brewers brewing fewer than 6 million barrels of beer a year in the United States.
The report found a production volume increase of 16 percent during the first half of 2015.
“Industry growth is occurring in all regions and stemming from a mix of sources including various retail settings and a variety of unique brewery business models,” Brewers Association chief economist Bart Watson said.
“The continued growth of small and independent brewers illustrates that additional market opportunities and demand are prevalent, although competition in the sector is certainly growing, and the need for brewers to differentiate and produce world-class high-quality beer is more important than ever.”
In the first half of this year, 12.2 million barrels of beer were sold, up from last year’s 10.6 million in the same time period. The totals for the time period were 5.5 million, 6.4 million and 7.3 million in 2011, 2012 and 2013, respectively.
The number of breweries in the United States also saw a significant jump, up to 3,739. It’s an increase of 699 breweries from the same time last year and the largest jump in the last five years. In June 2011, there were 1,776 breweries.
“More and more Americans are discovering the joys of enjoying fresh beer produced by their neighborhood brewery,” Watson said. “By supporting local, small and independent craft breweries, beer lovers are gradually returning the United States to the system of localized beer production that existed for much of our nation’s history.”