U.S. Edges Toward Potential Beer Trade Surplus

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Researched by Industrial Info Resources (Sugar Land, Texas)--Among several factors contributing to the ongoing craft boom is growing exports of American beer. American craft and macro breweries alike have been enjoying increased demand from abroad. There are a growing number of reports that indicate American craft is starting to take hold in many European counties. Simultaneously, macro breweries have also started to export greater volumes of beer to make up for lost U.S. sales. It should come as no surprise that Industrial Info is tracking $2.78 billion of active projects for the beer segment.

Using data from the Craft Brewers Association and the U.S. Department of Commerce, craft beers share of exports was about 9.78% in 2015, not much lower than its current share of beer in the U.S. Industrial Info analyzed export and import data from the U.S. Economic Census for 174 different countries from 2003 to 2016. In 2003, the U.S. was exporting beer to only 53 countries in any significant amount. As of 2016, that number has increased to 75, up more than 44%. However, this number should be taken with skepticism. Many of the new trading partners are small island nations that don't import much at all. Others are perhaps not a dependable source of trade with the U.S. Greece, for instance, has only imported American beer in eight months between 2003 and 2016 totaling just over $14,000 worth of beer. To account for the difference, an importers diversity index was developed to account not for the number of the individual counties, but for their overall level of imports. This diversity index indicated that the overall level of diversity among importers of American beer has only increased just over 5% since 2003. This suggests that most of the growth has come from historically strong trading partners.

Click on image at right for graph showing countries importing American beer from 2003-2016, from U.S. Economic Census

Nevertheless, many active trading partners continue to import more American beer. The region that is gaining the most share of American beer to date has been Asia. South Korea, for instance, with virtually zero imports of American beer in 2003, has grown to $9.8 million per month. Bangladesh, Cambodia, Burma, Japan, China, Malaysia, Taiwan, Singapore, Thailand and Vietnam have all significantly increased as well. Hong Kong is one of the few regions that has decreased consumption of American Beer in that same time. Russia, India and Mongolia have remained more or less flat.

In Europe, consumption of American beer is mostly concentrated in a few Western and Baltic nations, but they are growing very fast. Like South Korea, with the fastest growth on the continent, Sweden as gone from basically nothing in 2003, to being the fourth largest consumer at $2.5 million dollars per month. The largest consumer is Ireland at $5.8 million dollars per month, followed by Spain and the U.K., with $5.066 and $4.903 million dollars per month, respectively.

Click image at right to view a chart showing regional share of American beer from 2003 through 2016 from U.S. Economic Census

This all seems to indicate that someday in the not too distant future, the U.S. may have a trade surplus of beer. Using simple regression analysis to control for season effects, we find that U.S. imports have grown at an average rate of $872.1 per month since 2003. American exports on the other hand have grown $2,154 per month since 2003. Using the equations calculated in the simple regression, we can extrapolate that at those rates American exports can be expected to overtake imports sometime in the fourth quarter of 2018. Extrapolation like this is a very dubious method of predicting the future, and as one can observe in the graph at the right, using information from the U.S. Economic Census, major pumps and spikes occurred over time in the past. Nevertheless, there have been mounting reports of American craft beer becoming more popular around the world.

Click the icon at right for a graph showing U.S. beer imports and exports, in dollar value, from 2003 to 2016 (source: U.S. Economic Census).

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.