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Craft Brewers Sustaining Excellence and Growth

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Page 1: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

Craft BrewersSustaining Excellence and Growth

Page 2: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

Brewers Association is…

Page 3: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

Government Affairs

• In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act

• Brewers that produce less than 2 million barrels annually (virtually all BA members):• Will be taxed at a rate of $3.50/barrel on

the first 60,000 barrels of beer produced

• And $16/barrel on any further barrels produced up to 6 million barrels

• (Above 6 million barrels, the excise tax remains $18/ barrel).

Craft Beverage Modernization and Tax Relief Act

Page 4: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers
Page 5: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

• Annual production of 6 million barrels of beer or less (approximately 3 percent of U.S. annual sales).

An American craft brewer is small, independent, and traditional.

Craft Brewer Definition

Small

Independent• Less than 25% of the craft brewery is owned

or controlled (or equivalent economic interest) by a beverage alcohol industry member that is not itself a craft brewer.

Traditional• A brewer that has a majority of its total beverage

alcohol volume in beers whose flavor derives from traditional or innovative brewing ingredients and their fermentation. Flavored malt beverages (FMBs) are not considered beers.

Page 6: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

These are historic beer times!

• 1978 = 42 brewing companies

• 2017 = 6,000+

• Tens of thousands of beer labels

• United States = the most diverse beer market

Page 7: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

The U.S. Craft Beer Market

Page 8: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

Big Picture

• Growth in a competitive market

• Growth in a crowded marketplace• 2 openings a day• Large brewer

acquisitions• Crowded distribution

• Small still healthy• Still growth out there

Page 9: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

Domestic Imports Craft 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

Page 10: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

0

1000

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6000

7000

2012 2013 2014 2015 2016 2017

Number of Active Breweries, 2012-2017(est.)

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0

2.000

4.000

6.000

8.000

10.000

12.000

14.000Bonded U.S. Wineries, 1993-2017

Page 12: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

Where are all the U.S. breweries?

Red = MicroBlue = Brewpub

Page 13: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

Sales

• Craft brewers up 5% by volume at mid-year. Up 8-10% in retail dollar sales.

• (Includes on-premise and at the brewery sales)

• For full year 2017, Total beer is down -1% in volume / up 1% in dollar sales in IRI.

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Page 15: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers
Page 16: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers
Page 17: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers
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2017 Dollar Share & GrowthIndependent Craft

Source: IRI Group

$ Sales Share Growth RateIPA 28.2% 17.5%SEASONAL 11.8% -6.0%OTHER PALE LAGERS

11.5% 9.1%

PALE ALE 8.9% 8.9%VARIETY 7.2% 1.3%AMBER ALE 4.2% -8.4%GOLDEN ALES 3.7% 40.6%

Page 19: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

• States with above average craft share (2015), 2016 growth = 1.9%

• States with below average craft share (2015), 2016 growth = 7.7%

Page 20: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

Key Issues

Page 21: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

What We Want

• Fair access to market for all U.S. breweries

• Taprooms• 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)

• Continued growth and demand for our members beers.

Choice

Quality• Breweries that are driven by

quality, with a safe work environment who are sustainability minded and who advance beer.

Page 22: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

2.315 2.748 8.400 18.125 24.355

33.366 53.500

92.600

425.000

0

50.000

100.000

150.000

200.000

250.000

300.000

350.000

400.000

450.000

*Boston Beer Co. *Yuengling Heineken USA Constellation *Small &Independent

Imports Molson Coors AB InBev U.S. AB InBev Global

2016 Barrels: U.S. Beer(000's of bbls)

*Included in S&I Total

Page 23: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers
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BrewersAssociation.org/seal#IndependentBeer

Independent Craft Brewer Seal

Page 25: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

BrewersAssociation.org/seal#IndependentBeer

Independent Craft Brewer Seal

• Many beer drinkers want to know who makes their beer

• 81% of craft beer appreciators indicated “independent” and “independently owned” as the most recognized terms presented in a 2017 Nielsen/Brewbound Harris Poll

• Tool for enthusiasts to easily differentiate beer from craft brewers and beer produced by other, non-craft companies

Adoption

Purpose

• 2,872 breweries have adopted the seal, as of January 16, 2018

Page 26: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

Take Craft Back

Anthem

Page 27: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

Research Grants

• 2015: $150,000• 2016: $380,000• 2017: $730,000• 2018: $915,000 (budgeted)

Funding

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Page 29: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

Best Practices Guide to Quality Beer

Page 30: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

Brewers Association Staff

Page 31: Craft Brewers - CRAFT – Onafhankelijke Brouwers … · •In late 2017, U.S. Congress passed the first major tax reform legislation since 1986 – Tax Cuts and Jobs Act • Brewers

Questions?

Bob [email protected]

BrewersAssociation.orgCraftBeer.comHomebrewersAssociation.org