McGreevy Sees Big Summer for Beer Industry

of beer supply supply chain partners. According to their website, adds up to a three billion dollar industry supporting more than two point one million American jobs. For more on the pandemic and post pandemic world of the beer industry, let's bring in Jim McGreevey, President, chief executive officer of the Beer Institute. He's with us on the phone in New Jersey, Gym. Nice to have you here today. How are you? And talk to me a little bit about kind of where you guys were in your industry members

one year ago at the start of the pandemic. Boy, Karen Will, first of all, thanks for having me. I really appreciated. Um. Where we were a year ago is probably where so many other Americans were a year ago personally and and in their jobs, really trying to figure out as of March thirteenth and around there where where our industry would be going. Thankfully, the federal government made the production and distribution of beer essential as part of

the grocery system. UM, so we were able to keep our breweries and and many of our folks employed UH in the making and distribution of beer. Obviously, with the bars and restaurants closed for months on end, particularly at the beginning of the pandemic, we saw so many of those jobs lost, nearly seventy thousand as a matter of fact,

throughout the US jobs supported by the beer industry. But their Beer Serves America report really UM, it tells the story of a very resilient industry and one that's coming back, we hope as America comes back. So we're very pleased with with some of these some of this data from our biennial report. Well, it's interesting local beverage center where we pick up like our cases of water and you know whatever else juices and stuff. But I said to them, how you know, I haven't hadn't seen them in about

a year, And I said, how are you guys? And they said it was really hard because of their business was supplying all of the local restaurants UH in the community, and that was just shut down. Tell us about your members, because we think about you know, those of us who go to the supermarket right or um, you know, to pick up something. But it's the restaurants and the hospitality industry that your members play such a big role on. How How hard hit were they? Oh, they were, they

were very hard hit. Not just from the the hundreds of thousands of employees that either lost their jobs on a permanent or temporary basis, but we saw nearly twenty billion dollars in decline in retail beer sales. You know, you think back to that mid March period of the March madness was just get rolling, getting rolling with the conference tournaments leading to the n t A tournament. You

know St. Patrick's Day. We've loaded in a lot of beer in the beer in the bars and restaurants throughout the country for St. Patrick's Day, so many of these holidays. Then moving into the summer with Memorial Day, fourth of July. Um, the bars and restaurants in this country were just so hard hit. Um. You had a I think you did an interview with John Taffer from our rescue bar rescue last month. Um and he said that he's starting to see them coming back though, and that's what the data

shows that we're seeing. Um Uh. You know, we're getting near the end of this COVID period, thankfully, um And I think we're starting to see these bars and restaurants crowded.

I can tell you down here at the Jersey Shore, um we saw lines out the door and down the block to get into some of the some of the bars and restaurants at the Jersey Shore just this past weekend when it was torrential rain outside with folks and folks standing outside it with garbage bags and umbrella is just trying to get in and gathered together, and a lot of those a lot of that gathering is done around a beer. Um. So we're very hopeful for the

recovery of the bars and restaurants. It's so important to our country, so important to beer. Um Uh. During the COVID period, we saw significant spoilage of food and beverage and beer is perishable. Nearly nine million UM dollars worth of beer that was just perishable, and that just that just really hurts the industry and hurts the bars and restaurant. That's amazing. That's a big number, hey, in terms of UM demand. Ultimately though, did it pick up um substantially

over the past year. Just got about thirty seconds. We'll do some news and then we'll come back. Well, I'll just tell you one thing, John said, Uh, the more beer was sold last month in Las Vegas than ever before in the history of the city. So I think that goes to show you, hopefully where we're going to

go in the next few months. All right, interesting John, Um, Yeah, it was good to talk with him because to get some perspective on hospitality and how it plays into the restaurant industry, the small businesses that are largely the backbone of the economy. Jim, we're gonna come back in just a moment. Jim Agreevy. He's going to stay with us, President, chief executive officer of the Beer Institute. Well, Jim Agreevy

is still with us. He's president, chief executive officer of the Beer Institute, still with us on the phone in New Jersey. The Beer Institute the national trade association that represents America's brewers, beer importers, and supply chain partners. So really a great snapshot of what's going on the industry, Hey, Jim, one thing I wanted to ask you jobs. We get the monthly jobs report tomorrow. Your industry, are they having any troubles attracting workers, especially as the economy opens up

and demand ramps up. We don't see uh trouble attracting workers in our breweries and distribution business. Um again, Carol goes back to the bars and restaurants right right, five jobs lost on a temporary or permanent basis, and you hear lots of discussion around the difficulties of getting people back into those places. And you know, I think we really need to support the recovery by by getting those folks back to work. Um uh. And I think we're

seeing that. I mean, you know, our senses from some of the data, we're seeing that the food service uh, in what we call the on premise, the bars, restaurants, taverns are starting to come back to pre pandemic levels. I think we're going to get there, but certainly you do hear from a lot of different corners this the discussion around the difficulty and getting some workers. And I think we're certainly seeing that in the bars and restaurants right now. But we're not at pre pandemic levels for

the industry yet. No. Um. But you know, I think we're going to have a big summer, uh for all Americans, and I think for the hospitality industry, and I think for the beer industry. Um. Uh. So I'm very hopeful. Uh. You know, you just see the economic impact of beer through our Beer Servis America report. One point six percent of US GDP comes from our our industry. Two million Americans of their livelihoods in one way or another to the production, distribution, and sale of beer. We're coming out

of a period where folks were cooped up. Um, they want out, and I think they're going to um uh. We're already seeing them sort of hitting the bars and restaurants in this country in a big way, and I think that's only going to grow. I have to say, some of our listeners and followers on YouTube, I think hearing that you said we're going to have a strong

summer saying well, doing to that. So responding as the world reopens, hey, listen, one thing I'm curious about present Minds said to be offering up to create a tax floor fifteen down from his earlier proposal to lift the corporate tax rate from twenty one to eight percent, so essentially unwinding the tax cuts UM that the GOP adopted back in seventeen. That's what he initially was looking to do.

Now it's like he's backing off of that potentially. I'm assuming your members are in favor of lower rather than higher corporate taxes. You know, we spew the power of tax relief in our own industry. Um. We are one of the most taxed industries and regulated industries in the country, but we did receive a relief from the excise tax that beer pays in two thousand UH twenty and two thousand nineteen excuse me, UM, and we saw the power

of that UH for our industry. So I think it's I think it's great to see seemingly Republicans and Democrats coming together inching closer towards one another on on some kind of deal here on infrastructure, which I think will only help support the recovery. You know, excise taxes is a tax that we pay that others do not. But the total taxes paid we see in our Beer Serves America report from UH from Beer is fifty five billion dollars. So we certainly want to see low taxes, but we

know in our industry the power of tax relief. Just in recent years it's been very helpful to us. So what specifically, what what happens when there's low taxes? What happens to that money? Because we often talking about it with you know, publicly held companies that you get a tax break, it's not necessarily higher wages or investment in the business. It's often buy backs. So I'm just curious what happens when there's lower taxes in your industry, What

specifically do you see happen. Yeah, Carol, in nineteen seventy six, there are fifty one breweries left in this country. Today there are over eight thousand. And I can tell you when we received the xcise tax relief. Over the last few years that we've received UM, I talked to brewers across the country, large brewers, small brewers, all sort of talking about the same thing, using that tax relief to hire more workers, to improve their physical plants, their breweries,

their their tap rooms. Uh. You know, they're they're Fastill it is UM finding more ways to distribute their beer, innovating more and more so to me, Uh, and I we see this. We are an industry that has experienced this over the last few years. Low taxes drives innovation, it drives jobs, uh, and it drives an industry. Okay, So in terms of innovation, what are some of the kind of interesting innovative trends that are happening within the

beer industry. You know, we were talking on our planning call and I was thinking about cannabis and beer, and the political environment seems to be opening up in a big way, certainly when it comes to cannabis. More generally speaking, what are the interesting trends Jim, that are happening right now?

Beer is always innovating, Carol. You know, a few decades ago, light beer was an innovation of its time, and then we saw the rise of the craft movement and bringing back some of the styles that had fallen off the radar screen throw up, particularly I P A. S. Today, you see ready to drink beverages in so many different ways. The hard cellser phenomenon of the last four years preceded by the hard soda uh movement of a few summers ago. Um,

that's the great thing about beer. We are always innovating. We want to be where the consumer is and the consumer right now is looking for more flavor, but also very mindful of health and wellness, calories and other things. So these these hard selsers are ready to drink beverages are are really becoming a bigger and bigger part of our industry. There. Many of them are malt based, they're made in a brewery, they're made by brewers. Um. That's the kind of innovation you see. And you hear so

much about these different hard Seltzer brands now. Um, but there's always something new uh in beer. Beer is the incredibly dynamic industry. Just got about seconds here. When you talk to your members, the outlook, the economic mark it outlook, how does it look for the next six months to twelve months. Well, as I said, I think we're hoping for a big summer for every American and for beer in particular. We want to grow those uh two million

jobs supported by the beer industry. We want to grow that three thirty two billion dollar economic input that we have. So um. You know, I think that there's always some things that can be improved upon, but I think the opportunities for beer are great. I think the opportunities for our country are very coming out of this, uh, this pandemic period, so I'm very hopeful. All right, Well, great

to check in with you. I really appreciate it. Jim and Greevy, he's president, chief executive officer at the Beer Institute, joining us on the phone from New Jersey. Some optimism, certainly for his industry.