While millions of Americans may have increased their at-home beer consumption during the COVID-19 pandemic, the beer industry is reeling.
A new report released Sept. 22 from The Beer Institute, The Brewers Association, The National Beer Wholesalers Association and American Beverage Licensees said that the pandemic will end up costing the industry more than 651,000 domestic jobs by the end of 2020. The vast majority of those job losses — 400,000 — come from retail-related operations, while 3,600 are in beer brewing and another 1,800 jobs are in distribution.
Besides the labor costs, the report forecasts that the pandemic will result in more than $22 billion in lost retail beer sales.
In 2018, the Beer Serves America study found that the US beer industry supports more than 2.1 million jobs that contribute at least $328 billion to the US economy. On top of that, it found that the beer industry pays nearly $59 billion in annual taxes, which equates to taxes comprising about 40 percent of the cost of a beer, on average.
The beer market has been one of the hardest-hit industries amid COVID-19, as reliable revenue streams like bars, breweries, sporting events and festivals have been all-but wiped by state and city mandates since mid-March. According to the National Beer Wholesalers Association, total US beer volume in June was down 2.5 percent year-over-year despite strong off-premise sales.
That has left beer makers to rely heavily on retail sales, but these latest job loss numbers — especially the 400,000 jobs lost in beer retail — could have long-term impacts on beer makers’ ability to get their product in the hands of consumers.
Making matters worse, businesses such as craft brewers, brewpubs and taprooms are scheduled to have their federal excise taxes increase in 2021, by a total of $154 million across the industry.
The industry was already facing tough conditions after total US beer sales fell 2.3 percent in 2019 — including a 3.6 percent decline in domestic beer. It marked a fourth-straight year of overall declines, despite the rapid rise of seltzers and nonalcoholic beverages that many of the largest beermakers have added to their portfolio.