While millions of Americans may have increased their at-home beer consumption during the COVID-19 pandemic, the beer industry is reeling.
A report from The Beer Institute, The Brewers Association, The National Beer Wholesalers Association and American Beverage Licensees said 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 losses, 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 U.S. beer industry supports more than 2.1 million jobs that contribute at least $328 billion to the 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% 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 out by state and city mandates since mid-March. According to the National Beer Wholesalers Association, total U.S. beer volume in June was down 2.5% year-over-year despite strong off-premise sales.
That has left beer makers to rely heavily on retail sales, but the latest job loss numbers could have long-term impacts on their 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 U.S. beer sales fell 2.3% in 2019 — including a 3.6% decline in domestic beer. It marked the fourth straight year of overall declines, despite the rapid rise of seltzers and non-alcoholic beverages that many of the largest beer makers have added to their portfolios.