The dynamics of the beer industry have drastically changed over the centuries; in 1587, for example, American colonists would brew beer using corn. Tighter control over the production process was established following the birth of the U.S. Brewers Academy which was then followed by strict standards and regulations.

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A recent study conducted by Harris Interactive finds that 54% of American adults drink beer, a figure which is slightly higher for males and sports fans. Moreover, 74% of males and 49% of females aged 21-34 drink beer. For those aged over 55, beer consumption is reduced to 62% for men and only 30% for women.

Beer by State
The Beer Institute finds that residents of Montana tend to drink more beer per capita than any other state. In fact, Montana has held top spot in 2008 and 2009, and was ranked the number four per capita consumer from 2003 through 2007. With shipments totaling over one million 31 gallon barrels and a meager population of only 711,000, the average individual drinks 43.7 gallons of beer per year - almost double the amount drank by citizens of New York.

Utah has consistently ranked last for alcohol consumption in the last seven years, back as far as records are available. With a per capita consumption of 19.4 gallons per adult, Utah ranks far behind drinking leaders such as New Hampshire (#2), North Dakota (#3), Nevada (#4) and South Dakota(#5). California is the state with the largest absolute volume of beer consumption and the largest number of breweries.

Seasonality in the Industry
As can be expected the beer industry operates under a cyclical business model with consumers drinking more in the summer and less in the winter months. In 2007, U.S. beer consumption from January through April totaled 68 million barrels, while in the next four months, from May to August, consumption increased by 15% to 79 million barrels. This type of pattern can also be observed when analyzing the number of beverage can shipments; in quarters one and four approximately 45% of total cans are shipped, while quarters two and three make up 55% of the product flow.

Top Beer Brands
Reaping the benefits of the growing American beer demand, some breweries have been able to strategically align themselves to gain a massive market share in the multi-billion dollar industry. Bud light has retained its dominance in the beer industry with a 19.3% market share, practically double that of Heineken, Corona Extra, Bush and Keystone Light combined.

Measured by U.S. shipment data, the past three years have not seen a massive change in competitive landscape of the industry. Although it still holds in second place, Budweiser has steadily declined from having a 10.8% market share to a 9.3% market share. The other major brands have experienced much less volatility. (To learn more, see Beer Mergers: Are The Micro Brewers Doomed?)

Beer Economics
The beer industry is a major component of the North American economy, employing approximately 45,000 workers in brewing facilities in addition to 95,000 and 900,000 employees in the alcohol distribution and the retailing sector respectively. After the employment in industries such as agriculture and construction is considered, approximately two million Americans' professions are dependent on the beer supply chain.

According to research conducted by the Beer Institute, the aggregate 2008 payroll from those involved in the beer business amounted to $62 million. Furthermore, the public sector also benefits from the industry as over $11 billion worth of consumption taxes were collected.

The Bottom Line
America is a major beer producer, lagging only behind China, while greatly surpassing nations such as Germany, Russia and Brazil. This economic sector provides great opportunity for successful businesses and substantial tax revenues for the government. (For more, check out Beeronomics: Factors Affecting Your Pint.)

Catch up on the latest financial news, read Water Cooler Finance: Billion Dollar Summits and Barack Vs. BP.

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