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.

IN PICTURES: 5 Money-Saving Shopping Tips

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.

Related Articles
  1. Economics

    5 States with the Highest GDP Per Capita

    Learn about the top five states ranked by their real gross domestic product (GDP) per capita as of 2014: Alaska, North Dakota, New York, Connecticut and Wyoming.
  2. Taxes

    5 States Without Sales Tax

    Learn about the five states that do not charge sales taxes and about other taxes the states levy instead in order to generate revenue.
  3. Stock Analysis

    The Biggest Risks of Investing in Sears Stock

    Learn about the factors that have led to Sears Holdings' underperformance the past several years and where the ailing retailer could be heading in the future.
  4. Stock Analysis

    4 Key Indicators That Move The Markets

    Educated investors need to keep their finger on the pulse of the economy, and watching certain indicators is a good way to do that.
  5. Savings

    Craft Beer Clubs – Bargain or Not?

    If you're an aficionado of artisanal brews (or would like to be), a beer club can be a palate-pleasing, albeit pricey, way to expand your hops horizon.
  6. Stock Analysis

    When Will Dick's Sporting Goods Bounce Back? (DKS)

    Is DKS a bargain here?
  7. Stock Analysis

    Has Urban Outfitters Lost its Way? (URBN)

    Urban Outfitters just made a bold move. Will it pay off?
  8. Savings

    Your Flex Spending Dollars: How to Use Them All

    Your flexible spending account is about to expire. Don't throw money away; here's how you can spend every cent (or roll it over).
  9. Savings

    Are Wine Clubs Worth It?

    Some points to consider, before committing to a membership for yourself – or as a gift. The right club can also help you save money over the holidays.
  10. Stock Analysis

    Kohl's: Should You Stock Up or Sell? (KSS)

    Many traders are bearish on Kohl's, but long-term investors might want to take a closer look for this simple reason.
  1. Marginal propensity to Consume (MPC) Vs. Save (MPS)

    Historically, because people in the United States have shown a higher propensity to consume, this is likely the more important ... Read Full Answer >>
  2. Is Japan an emerging market economy?

    Japan is not an emerging market economy. Emerging market economies are characterized by low per capita incomes, poor infrastructure ... Read Full Answer >>
  3. Are Social Security payments included in the US GDP calculation?

    Social Security payments are not included in the U.S. definition of the gross domestic product (GDP). Transfer Payments For ... Read Full Answer >>
  4. What economic indicators are important to consider when investing in the retail sector?

    The unemployment rate and Consumer Confidence Index (CCI) rank as two of the most important economic indicators to consider ... Read Full Answer >>
  5. How do changes in interest rates affect the spending habits in the economy?

    Changes in interest rates can have different effects on consumer spending habits depending on a number of factors, including ... Read Full Answer >>
  6. What is the difference between an OEM (original equipment manufacturer) and a VAR ...

    An original equipment manufacturer (OEM) is a company that manufactures a basic product or a component product, such as a ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  2. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  3. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  4. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  5. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
  6. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability ...
Trading Center