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2007 Malt Beverage Industry Packaging Trends

2007 Malt Beverage Industry Packaging Trends. Craft Brewers Conference San Diego , CA April, 19, 2008 Lester Jones Beer Institute Washington, DC. 2007 Changing Marketplace.

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2007 Malt Beverage Industry Packaging Trends

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  1. 2007 Malt Beverage Industry Packaging Trends Craft Brewers Conference San Diego , CA April, 19, 2008 Lester Jones Beer Institute Washington, DC

  2. 2007 Changing Marketplace • Import sector pulled back to its slowest growth in past 10 years, Slowing occurred in the mainstream import brands, but still have strong demand for specialty beer from smaller importing countries such as Belgium. • Top 3 Brewers had a very interesting year… • AB first full year with Inbev, Grolsch, and Rolling Rock in their distribution network • MBCO has successful Miller Chill product launch and McKenzie River/Steele Reserve continue to grow • Molson-Coors had continued success with Blue Moon, Coors Light Cold Campaign and Coors Original Banquet • Boston Beer continues posting strong growth • Yuengling continues to post a moderate growth and expands into TN. • Specialty/Craft segment continues double digit growth from 2006 into 2007 with 12% growth. • BIG QUESTION: Will the economic slowdown, rising ingredient costs and resource prices slow industry growth in 2008?

  3. Per Capita Consumption of Malt Beverages1980 to 2007 (gallons per person/total population) • Second year of increase 22.2 in 2007 from a high of 24.6 in 1981 • Changing Demographics, tastes and trading up • Increased alcohol beverage competition • Additional non-alcohol beverage choices • Policy Changes (21 LDA and .08) Source: Beer Institute, 2007.

  4. Total Malt Beverage Industry2006 vs. 2007 (1,000’s of 31 gallon barrels) Total Industry added over 3 million barrels or 42 million cases of beer for a gain of almost 1 billion 12 ounce equivalent servings. In a dramatic reversal from 2006, over 90% of the net gain in volume came from domestic growth. * 2007 Beer Institute Year End Reported Volume Source: Beer Institute, 2007

  5. Domestic Malt Beverage Industry2006 vs. 2007 (1,000’s of 31 gallon barrels) *Tax Paid on beer that is served directly from serving tanks in brewpubs and tavern Small relative to total market but still 85 million 16 ounce servings. * * Industry totals may differ from year end published figures in previous slide as additional information on 2007 is collected in 2008 Source: TTB and Beer Institute, 2008

  6. Import Package Mix2006 vs. 2007 (1,000’s of 31 gallon barrels) Cans and draught carried imported industry volumes for 2007. The bottle segment from Mexico and Netherlands lost over 700,000 combined barrels. Source: Us Dept of Commerce and Beer Institute, 2008

  7. Imports of Draught Beer into the US1999 to 2007 (31 gallon barrels) Draught imports have grown 7% CAGR since 1999 to reach 2.4 million barrels in 2007. Measure of on premise consumption and best opportunity for consumers to try new brands. Source: US Dept of Commerce, Bureau of Census and Beer Institute, 2007

  8. National Package Mix Trends, 2006 vs. 2007 (1,000’s of 31 gallon barrels) Industry totals may differ from year end published figures in previous slide as additional information on 2007 is collected in calendar year 2008. Source: Beer Institute, 2008

  9. US Package Mix Volumes, 1994-2007 SharesPack 1994 2007 Cans 55% 48% Bottles 30% 41.5% Draught 11% 9.5% Refills 4% 0% Source: Beer Institute Package Mix and Shipment Reports, 2008

  10. Draught Beer Share – On Premise MeasureDraught Share of Market 1946 to 2007 • Draught share of market has fallen consistently from over a third of the market to less than 10% in 2007. • But still significant, over 20 million barrels (domestic + imports) in 2007 for over 4.9 billion 16 ounce servings. • There are over 29,000 miles of draught lines in the US and over 10 million kegs in circulation. Source: TTB and Beer Institute, 2007

  11. Making a Dent in Keg Theft

  12. Price Index for Scrap Metals, 2001 - 2007Four fold increase since 2001 Source: BLS Producer Price Index and Beer Institute, 2008

  13. Keg Loss Estimate2006 volumes and values 10.7 million kegs equals about $1.5 billion in brewer assets on the street 386K kegs have the potential to be worth $15 million at current scrap values Source: Beer Institute, 2007

  14. Keg Loss • Surprise Issue of the Year • 300,000 Kegs Lost • Costs Industry More than $50 million annually • Expected to Get Worse Fighting Back ● Partnering with ISRI, Others ● Education materials ● Ad campaign in Scrap Magazine

  15. WA ME NH VT MT ND OR MN NY MA WI SD ID WY MI PA RI CT NE IA OH IL IN NV DE NJ WV UT VA KS MO DC CO KY CA MD NC TN OK SC AZ AR NM GA MS AL LA TX FL HI AK Legislation passed that covers scrap metal/keg loss prevention Legislation introduced that includes scrap metal/keg loss prevention Potential Keg loss target states for remainder of 2007 or 2008 Keg Loss/Scrap Metal Loss Prevention Efforts PR February 8, 2008

  16. Thank You Lester Jones Beer Institute Washington, DC ljones@beerinstitute.org

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