Economic gains are on tap for the U.S. beer industry, according to a new study.
On Tuesday, a group of hops enthusiasts and industry leaders gathered in a building on Capitol Hill for the release of the "Beer Serves America" economic report. The findings show that the U.S. beer industry generated $253 billion in economic activity last year, up from $246.6 billion in 2012, resulting in an output equal to about 1.5 percent of U.S. gross domestic product.
About 1.75 million jobs are supported by the industry, the study found, based on data from 2014. That number is larger than the population of several states, situated between West Virginia (1.85 million) and Idaho (1.63 million), according to the latest Census report. A total of 49,576 Americans are directly employed by brewers and beer importers.
"More than $48.5 billion in tax revenue is generated by the production and sale of beer and other malt beverages," said a press release from the Beer Institute and the National Beer Wholesalers Association, the sponsors of the study. "This is equal to nearly 40 percent of the retail price paid for beer by consumers."
The beer industry — which includes brewers, brewer suppliers, beer importers, distributors and retailers — has enjoyed steady growth over the past few years. The total number of brewing facilities have grown by 2,290 in two years, "most being very small brewers or brew pubs," the study found. About 5,825 more people work in breweries in 2014 than in 2012 and 2,060 wholesale jobs were added in the same time frame.
A separate study released this week from the Brewers Association found that the number of small and independent breweries in the United States is on the rise: 3,793 in 2015, up from 3,040 in 2014 and 2,538 in 2013.
The states with the largest amount of economic gain from the beer industry were California at around $32.84 billion, Texas at around $19.16 billion and Florida at about $14.05 billion. At the bottom of the list was Wyoming, which gained around $492.69 million.
"It can be said that beer truly serves America. Beer is more than our nation's favorite adult drink — it is a powerhouse in job creation, commercial activity and tax revenue," said Jim McGreevy, president and CEO of the Beer Institute.
Despite the positive numbers, a couple bitter statistics were also addressed. The spending habits of those who work in the malt beverage industry, and those whose jobs are directly dependent on malt beverage sales and production — contributing to what is known as the "induced effect" — have made less of an economic impact in recent years. The study points out the reason for this decline is the 2007-09 recession and a possible change in the way the Bureau of Economic Analysis calculates economic activity.
The "velocity of money," or the ratio of GDP to money supply, "collapsed" in the last business cycle. "Even though the beer industry itself (in terms of direct and supplier output) grew by 17.9 percent between 2012 and 2014," said the study, "total industry impact grew by only 2.5 percent or $6.1 billion due to the reduction in the induced effect."
The "Beer Serves America" study was compiled by an independent economics firm, John Dunham & Associates and "is the most comprehensive analysis of the industry available, using data collected directly from private companies, Dun & Bradstreet, the U.S. Bureau of Labor Statistics, the Alcohol Tobacco Tax and Trade Bureau, and the U.S. Bureau of Economic Analysis," according to the press release.
A poll conducted by Gallup in July of 2015 found that Americans who drink alcohol prefer beer over all other alcoholic beverages. Forty-two percent of adults said they preferred beer, compared to 34 percent who chose wine and 21 for liquor. Overall, 64 percent of American adults said they drink alcohol.