- More than 651,000 jobs supported by the U.S. beer industry will be lost by the end of the year due to the coronavirus pandemic, according to a report released by the Beer Institute, the Brewers Association, the National Beer Wholesalers Association and the American Beverage Licensees. The job losses include more than 3,600 brewing jobs, 1,800 distributing jobs and 400,000 retail-related jobs.
- The report also forecast the pandemic will result in retail beer sales declining by more than $22 billion by the end of 2020.
- The coronavirus is the latest challenge to affect the beer industry, which has watched sales fall 2.3% in 2019, its fourth straight year of declines, led by a 3.6% drop in domestic brews. While companies have invested in nonalcoholic beers or drinks like hard seltzer, they have not been enough to offset larger declines in their signature offerings.
The U.S. economy as a whole has seen millions of Americans lose their jobs as the coronavirus shutters everything from restaurants and stadiums to movie theaters and concert venues. One of the hardest hit is beer, which serves these and other establishments around the country. Without sales to these businesses, beer companies must largely depend on retail sales and the growing popularity of e-commerce to get their products into the hands of consumers.
But the beer groups noted in their study the ramifications of the pandemic on the industry extend beyond just the brewers themselves, extending into those entrepreneurs that ultimately distribute and sell the product. To underscore its value, the industry noted that in 2018, America’s beer industry supported more than 2.1 million jobs, contributed more than $328 billion to the U.S. economy and paid nearly $59 billion in taxes annually.
If the beer industry's data is correct, the loss of thousands of jobs could have a sweeping long-term impact on an industry that has seen growing competition from spirits, hard seltzers and other alcoholic-infused beverages like coffee. In the case of the more than 3,500 brewer jobs estimated to be lost from the pandemic, that could significantly curtail creativity, especially among smaller, locally owned businesses, and limit availability of beers across the country.
One of the segments of the beer industry struggling the most has been craft, which has thrived in recent years because of its ability to come up with novel flavors coupled with clever names that consumers can sample and purchase at local brewpubs, taprooms and community events. With these events postponed or business meaningfully scaled back, craft's primary competitive advantage was lost for much of the year.
"We've never faced anything like this. This is unprecedented. Absolutely unprecedented," Charlie Storey, president at Harpoon Brewery, a craft operation making beer in Boston since 1986, said in May. "We're doing everything we can to ride out the storm."
The beer industry has been branching out into other categories to offset struggles in their core offerings. Molson Coors Beverage recently rolled out a suite of nonalcoholic products including a full-flavored seltzer with added probiotics and a plant-based, diet soda. And AB InBev's Anheuser-Busch earlier this year released a Bud Light Seltzer as part of a bigger push to invest an additional $100 million into the hard seltzer category.
But for these and other companies, if they have fewer places to sell these products it becomes even harder for them to compete regardless of what they have in their portfolio. E-commerce has been a boon to many in the industry as consumers have warmed to the idea of getting their beer and other alcohols sent straight to their homes. It's possible the pandemic will encourage major beer player to become more active in this area, but state laws can make that a challenge.
A few companies are even allowing consumers a quick way to make their own beers, a potentially lucrative avenue if consumers continue to spend more time at home. Drinkworks, a partnership established in 2017 between AB InBev and Keurig Dr Pepper, is partnering with Los Angeles-based Golden Road Brewing to offer four of its wheat brews. Even though these offer bright spots for an otherwise downtrodden sector, much like other industries, there are few things the beer industry can do to weather the storm until the coronavirus pandemic is a distant memory.