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2007 Malt Beverage Industry Packaging Trends. Craft Brewers Conference San Diego , CA April, 19, 2008 Lester Jones Beer Institute Washington, DC. 2007 Changing Marketplace.

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2007 malt beverage industry packaging trends

2007 Malt Beverage Industry Packaging Trends

Craft Brewers Conference

San Diego , CA

April, 19, 2008

Lester Jones

Beer Institute

Washington, DC


2007 changing marketplace
2007 Changing Marketplace

  • Import sector pulled back to its slowest growth in past 10 years, Slowing occurred in the mainstream import brands, but still have strong demand for specialty beer from smaller importing countries such as Belgium.

  • Top 3 Brewers had a very interesting year…

    • AB first full year with Inbev, Grolsch, and Rolling Rock in their distribution network

    • MBCO has successful Miller Chill product launch and McKenzie River/Steele Reserve continue to grow

    • Molson-Coors had continued success with Blue Moon, Coors Light Cold Campaign and Coors Original Banquet

  • Boston Beer continues posting strong growth

  • Yuengling continues to post a moderate growth and expands into TN.

  • Specialty/Craft segment continues double digit growth from 2006 into 2007 with 12% growth.

  • BIG QUESTION: Will the economic slowdown, rising ingredient costs and resource prices slow industry growth in 2008?


Per capita consumption of malt beverages 1980 to 2007 gallons per person total population
Per Capita Consumption of Malt Beverages1980 to 2007 (gallons per person/total population)

  • Second year of increase 22.2 in 2007 from a high of 24.6 in 1981

  • Changing Demographics, tastes and trading up

  • Increased alcohol beverage competition

  • Additional non-alcohol beverage choices

  • Policy Changes (21 LDA and .08)

Source: Beer Institute, 2007.


Total malt beverage industry 2006 vs 2007 1 000 s of 31 gallon barrels
Total Malt Beverage Industry2006 vs. 2007 (1,000’s of 31 gallon barrels)

Total Industry added over 3 million barrels or 42 million cases of beer for a gain of almost 1 billion 12 ounce equivalent servings. In a dramatic reversal from 2006, over 90% of the net gain in volume came from domestic growth.

* 2007 Beer Institute Year End Reported Volume

Source: Beer Institute, 2007


Domestic malt beverage industry 2006 vs 2007 1 000 s of 31 gallon barrels
Domestic Malt Beverage Industry2006 vs. 2007 (1,000’s of 31 gallon barrels)

*Tax Paid on beer that is served directly from serving tanks in brewpubs and tavern Small relative to total market but still 85 million 16 ounce servings. * * Industry totals may differ from year end published figures in previous slide as additional information on 2007 is collected in 2008

Source: TTB and Beer Institute, 2008


Import package mix 2006 vs 2007 1 000 s of 31 gallon barrels
Import Package Mix2006 vs. 2007 (1,000’s of 31 gallon barrels)

Cans and draught carried imported industry volumes for 2007. The bottle segment from Mexico and Netherlands lost over 700,000 combined barrels.

Source: Us Dept of Commerce and Beer Institute, 2008


Imports of draught beer into the us 1999 to 2007 31 gallon barrels
Imports of Draught Beer into the US1999 to 2007 (31 gallon barrels)

Draught imports have grown 7% CAGR since 1999 to reach 2.4 million barrels in 2007. Measure of on premise consumption and best opportunity for consumers to try new brands.

Source: US Dept of Commerce, Bureau of Census and Beer Institute, 2007


National package mix trends 2006 vs 2007 1 000 s of 31 gallon barrels
National Package Mix Trends, 2006 vs. 2007 (1,000’s of 31 gallon barrels)

Industry totals may differ from year end published figures in previous slide as additional information on 2007 is collected in calendar year 2008.

Source: Beer Institute, 2008


Us package mix volumes 1994 2007
US Package Mix Volumes, 1994-2007

SharesPack 1994 2007 Cans 55% 48% Bottles 30% 41.5% Draught 11% 9.5% Refills 4% 0%

Source: Beer Institute Package Mix and Shipment Reports, 2008


Draught beer share on premise measure draught share of market 1946 to 2007
Draught Beer Share – On Premise MeasureDraught Share of Market 1946 to 2007

  • Draught share of market has fallen consistently from over a third of the market to less than 10% in 2007.

  • But still significant, over 20 million barrels (domestic + imports) in 2007 for over 4.9 billion 16 ounce servings.

  • There are over 29,000 miles of draught lines in the US and over 10 million kegs in circulation.

Source: TTB and Beer Institute, 2007



Price index for scrap metals 2001 2007 four fold increase since 2001
Price Index for Scrap Metals, 2001 - 2007Four fold increase since 2001

Source: BLS Producer Price Index and Beer Institute, 2008


Keg loss estimate 2006 volumes and values
Keg Loss Estimate2006 volumes and values

10.7 million kegs equals about $1.5 billion in brewer assets on the street

386K kegs have the potential to be worth $15 million at current scrap values

Source: Beer Institute, 2007


Keg loss
Keg Loss

  • Surprise Issue of the Year

  • 300,000 Kegs Lost

  • Costs Industry More than $50 million annually

  • Expected to Get Worse

Fighting Back

● Partnering with ISRI, Others

● Education materials

● Ad campaign in Scrap Magazine


Keg loss scrap metal loss prevention efforts

WA

ME

NH

VT

MT

ND

OR

MN

NY

MA

WI

SD

ID

WY

MI

PA

RI

CT

NE

IA

OH

IL

IN

NV

DE

NJ

WV

UT

VA

KS

MO

DC

CO

KY

CA

MD

NC

TN

OK

SC

AZ

AR

NM

GA

MS

AL

LA

TX

FL

HI

AK

Legislation passed that covers scrap metal/keg loss prevention

Legislation introduced that includes scrap metal/keg loss prevention

Potential Keg loss target states for remainder of 2007 or 2008

Keg Loss/Scrap Metal Loss Prevention Efforts

PR

February 8, 2008


Thank you

Thank You

Lester Jones

Beer Institute

Washington, DC

[email protected]


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