Speaker 1: You're listening to Bloomberg Business Week with Carol Masser and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well, we're
Speaker 1: gonna wrap up this last half hour with an update
Speaker 1: on the beer industry with the twenty five year veteran
Speaker 1: a policy and political work. He now heads the Beer Institute,
Speaker 1: the national trade association that represents America's brewers also importers
Speaker 1: of beer supply supply chain partners. According to their website,
Speaker 1: adds up to a three billion dollar industry supporting more
Speaker 1: than two point one million American jobs. For more on
Speaker 1: the pandemic and post pandemic world of the beer industry,
Speaker 1: let's bring in Jim McGreevey, President, chief executive officer of
Speaker 1: the Beer Institute. He's with us on the phone in
Speaker 1: New Jersey, Gym. Nice to have you here today. How
Speaker 1: are you? And talk to me a little bit about
Speaker 1: kind of where you guys were in your industry members
Speaker 1: one year ago at the start of the pandemic. Boy,
Speaker 1: Karen Will, first of all, thanks for having me. I
Speaker 1: really appreciated. Um. Where we were a year ago is
Speaker 1: probably where so many other Americans were a year ago
Speaker 1: personally and and in their jobs, really trying to figure
Speaker 1: out as of March thirteenth and around there where where
Speaker 1: our industry would be going. Thankfully, the federal government made
Speaker 1: the production and distribution of beer essential as part of
Speaker 1: the grocery system. UM, so we were able to keep
Speaker 1: our breweries and and many of our folks employed UH
Speaker 1: in the making and distribution of beer. Obviously, with the
Speaker 1: bars and restaurants closed for months on end, particularly at
Speaker 1: the beginning of the pandemic, we saw so many of
Speaker 1: those jobs lost, nearly seventy thousand as a matter of fact,
Speaker 1: throughout the US jobs supported by the beer industry. But
Speaker 1: their Beer Serves America report really UM, it tells the
Speaker 1: story of a very resilient industry and one that's coming back,
Speaker 1: we hope as America comes back. So we're very pleased
Speaker 1: with with some of these some of this data from
Speaker 1: our biennial report. Well, it's interesting local beverage center where
Speaker 1: we pick up like our cases of water and you
Speaker 1: know whatever else juices and stuff. But I said to them,
Speaker 1: how you know, I haven't hadn't seen them in about
Speaker 1: a year, And I said, how are you guys? And
Speaker 1: they said it was really hard because of their business
Speaker 1: was supplying all of the local restaurants UH in the community,
Speaker 1: and that was just shut down. Tell us about your members,
Speaker 1: because we think about you know, those of us who
Speaker 1: go to the supermarket right or um, you know, to
Speaker 1: pick up something. But it's the restaurants and the hospitality
Speaker 1: industry that your members play such a big role on.
Speaker 1: How How hard hit were they? Oh, they were, they
Speaker 1: were very hard hit. Not just from the the hundreds
Speaker 1: of thousands of employees that either lost their jobs on
Speaker 1: a permanent or temporary basis, but we saw nearly twenty
Speaker 1: billion dollars in decline in retail beer sales. You know,
Speaker 1: you think back to that mid March period of the
Speaker 1: March madness was just get rolling, getting rolling with the
Speaker 1: conference tournaments leading to the n t A tournament. You
Speaker 1: know St. Patrick's Day. We've loaded in a lot of
Speaker 1: beer in the beer in the bars and restaurants throughout
Speaker 1: the country for St. Patrick's Day, so many of these holidays.
Speaker 1: Then moving into the summer with Memorial Day, fourth of July. Um,
Speaker 1: the bars and restaurants in this country were just so
Speaker 1: hard hit. Um. You had a I think you did
Speaker 1: an interview with John Taffer from our rescue bar rescue
Speaker 1: last month. Um and he said that he's starting to
Speaker 1: see them coming back though, and that's what the data
Speaker 1: shows that we're seeing. Um Uh. You know, we're getting
Speaker 1: near the end of this COVID period, thankfully, um And
Speaker 1: I think we're starting to see these bars and restaurants crowded.
Speaker 1: I can tell you down here at the Jersey Shore,
Speaker 1: um we saw lines out the door and down the
Speaker 1: block to get into some of the some of the
Speaker 1: bars and restaurants at the Jersey Shore just this past
Speaker 1: weekend when it was torrential rain outside with folks and
Speaker 1: folks standing outside it with garbage bags and umbrella is
Speaker 1: just trying to get in and gathered together, and a
Speaker 1: lot of those a lot of that gathering is done
Speaker 1: around a beer. Um. So we're very hopeful for the
Speaker 1: recovery of the bars and restaurants. It's so important to
Speaker 1: our country, so important to beer. Um Uh. During the
Speaker 1: COVID period, we saw significant spoilage of food and beverage
Speaker 1: and beer is perishable. Nearly nine million UM dollars worth
Speaker 1: of beer that was just perishable, and that just that
Speaker 1: just really hurts the industry and hurts the bars and restaurant.
Speaker 1: That's amazing. That's a big number, hey, in terms of
Speaker 1: UM demand. Ultimately though, did it pick up um substantially
Speaker 1: over the past year. Just got about thirty seconds. We'll
Speaker 1: do some news and then we'll come back. Well, I'll
Speaker 1: just tell you one thing, John said, Uh, the more
Speaker 1: beer was sold last month in Las Vegas than ever
Speaker 1: before in the history of the city. So I think
Speaker 1: that goes to show you, hopefully where we're going to
Speaker 1: go in the next few months. All right, interesting John, Um, Yeah,
Speaker 1: it was good to talk with him because to get
Speaker 1: some perspective on hospitality and how it plays into the
Speaker 1: restaurant industry, the small businesses that are largely the backbone
Speaker 1: of the economy. Jim, we're gonna come back in just
Speaker 1: a moment. Jim Agreevy. He's going to stay with us, President,
Speaker 1: chief executive officer of the Beer Institute. Well, Jim Agreevy
Speaker 1: is still with us. He's president, chief executive officer of
Speaker 1: the Beer Institute, still with us on the phone in
Speaker 1: New Jersey. The Beer Institute the national trade association that
Speaker 1: represents America's brewers, beer importers, and supply chain partners. So
Speaker 1: really a great snapshot of what's going on the industry, Hey, Jim,
Speaker 1: one thing I wanted to ask you jobs. We get
Speaker 1: the monthly jobs report tomorrow. Your industry, are they having
Speaker 1: any troubles attracting workers, especially as the economy opens up
Speaker 1: and demand ramps up. We don't see uh trouble attracting
Speaker 1: workers in our breweries and distribution business. Um again, Carol
Speaker 1: goes back to the bars and restaurants right right, five
Speaker 1: jobs lost on a temporary or permanent basis, and you
Speaker 1: hear lots of discussion around the difficulties of getting people
Speaker 1: back into those places. And you know, I think we
Speaker 1: really need to support the recovery by by getting those
Speaker 1: folks back to work. Um uh. And I think we're
Speaker 1: seeing that. I mean, you know, our senses from some
Speaker 1: of the data, we're seeing that the food service uh,
Speaker 1: in what we call the on premise, the bars, restaurants,
Speaker 1: taverns are starting to come back to pre pandemic levels.
Speaker 1: I think we're going to get there, but certainly you
Speaker 1: do hear from a lot of different corners this the
Speaker 1: discussion around the difficulty and getting some workers. And I
Speaker 1: think we're certainly seeing that in the bars and restaurants
Speaker 1: right now. But we're not at pre pandemic levels for
Speaker 1: the industry yet. No. Um. But you know, I think
Speaker 1: we're going to have a big summer, uh for all Americans,
Speaker 1: and I think for the hospitality industry, and I think
Speaker 1: for the beer industry. Um. Uh. So I'm very hopeful. Uh.
Speaker 1: You know, you just see the economic impact of beer
Speaker 1: through our Beer Servis America report. One point six percent
Speaker 1: of US GDP comes from our our industry. Two million
Speaker 1: Americans of their livelihoods in one way or another to
Speaker 1: the production, distribution, and sale of beer. We're coming out
Speaker 1: of a period where folks were cooped up. Um, they
Speaker 1: want out, and I think they're going to um uh.
Speaker 1: We're already seeing them sort of hitting the bars and
Speaker 1: restaurants in this country in a big way, and I
Speaker 1: think that's only going to grow. I have to say,
Speaker 1: some of our listeners and followers on YouTube, I think
Speaker 1: hearing that you said we're going to have a strong
Speaker 1: summer saying well, doing to that. So responding as the
Speaker 1: world reopens, hey, listen, one thing I'm curious about present
Speaker 1: Minds said to be offering up to create a tax
Speaker 1: floor fifteen down from his earlier proposal to lift the
Speaker 1: corporate tax rate from twenty one to eight percent, so
Speaker 1: essentially unwinding the tax cuts UM that the GOP adopted
Speaker 1: back in seventeen. That's what he initially was looking to do.
Speaker 1: Now it's like he's backing off of that potentially. I'm
Speaker 1: assuming your members are in favor of lower rather than
Speaker 1: higher corporate taxes. You know, we spew the power of
Speaker 1: tax relief in our own industry. Um. We are one
Speaker 1: of the most taxed industries and regulated industries in the country,
Speaker 1: but we did receive a relief from the excise tax
Speaker 1: that beer pays in two thousand UH twenty and two
Speaker 1: thousand nineteen excuse me, UM, and we saw the power
Speaker 1: of that UH for our industry. So I think it's
Speaker 1: I think it's great to see seemingly Republicans and Democrats
Speaker 1: coming together inching closer towards one another on on some
Speaker 1: kind of deal here on infrastructure, which I think will
Speaker 1: only help support the recovery. You know, excise taxes is
Speaker 1: a tax that we pay that others do not. But
Speaker 1: the total taxes paid we see in our Beer Serves
Speaker 1: America report from UH from Beer is fifty five billion dollars.
Speaker 1: So we certainly want to see low taxes, but we
Speaker 1: know in our industry the power of tax relief. Just
Speaker 1: in recent years it's been very helpful to us. So
Speaker 1: what specifically, what what happens when there's low taxes? What
Speaker 1: happens to that money? Because we often talking about it
Speaker 1: with you know, publicly held companies that you get a
Speaker 1: tax break, it's not necessarily higher wages or investment in
Speaker 1: the business. It's often buy backs. So I'm just curious
Speaker 1: what happens when there's lower taxes in your industry, What
Speaker 1: specifically do you see happen. Yeah, Carol, in nineteen seventy six,
Speaker 1: there are fifty one breweries left in this country. Today
Speaker 1: there are over eight thousand. And I can tell you
Speaker 1: when we received the xcise tax relief. Over the last
Speaker 1: few years that we've received UM, I talked to brewers
Speaker 1: across the country, large brewers, small brewers, all sort of
Speaker 1: talking about the same thing, using that tax relief to
Speaker 1: hire more workers, to improve their physical plants, their breweries,
Speaker 1: their their tap rooms. Uh. You know, they're they're Fastill
Speaker 1: it is UM finding more ways to distribute their beer,
Speaker 1: innovating more and more so to me, Uh, and I
Speaker 1: we see this. We are an industry that has experienced
Speaker 1: this over the last few years. Low taxes drives innovation,
Speaker 1: it drives jobs, uh, and it drives an industry. Okay,
Speaker 1: So in terms of innovation, what are some of the
Speaker 1: kind of interesting innovative trends that are happening within the
Speaker 1: beer industry. You know, we were talking on our planning
Speaker 1: call and I was thinking about cannabis and beer, and
Speaker 1: the political environment seems to be opening up in a
Speaker 1: big way, certainly when it comes to cannabis. More generally speaking,
Speaker 1: what are the interesting trends Jim, that are happening right now?
Speaker 1: Beer is always innovating, Carol. You know, a few decades ago,
Speaker 1: light beer was an innovation of its time, and then
Speaker 1: we saw the rise of the craft movement and bringing
Speaker 1: back some of the styles that had fallen off the
Speaker 1: radar screen throw up, particularly I P A. S. Today,
Speaker 1: you see ready to drink beverages in so many different ways.
Speaker 1: The hard cellser phenomenon of the last four years preceded
Speaker 1: by the hard soda uh movement of a few summers ago. Um,
Speaker 1: that's the great thing about beer. We are always innovating.
Speaker 1: We want to be where the consumer is and the
Speaker 1: consumer right now is looking for more flavor, but also
Speaker 1: very mindful of health and wellness, calories and other things.
Speaker 1: So these these hard selsers are ready to drink beverages
Speaker 1: are are really becoming a bigger and bigger part of
Speaker 1: our industry. There. Many of them are malt based, they're
Speaker 1: made in a brewery, they're made by brewers. Um. That's
Speaker 1: the kind of innovation you see. And you hear so
Speaker 1: much about these different hard Seltzer brands now. Um, but
Speaker 1: there's always something new uh in beer. Beer is the
Speaker 1: incredibly dynamic industry. Just got about seconds here. When you
Speaker 1: talk to your members, the outlook, the economic mark it outlook,
Speaker 1: how does it look for the next six months to
Speaker 1: twelve months. Well, as I said, I think we're hoping
Speaker 1: for a big summer for every American and for beer
Speaker 1: in particular. We want to grow those uh two million
Speaker 1: jobs supported by the beer industry. We want to grow
Speaker 1: that three thirty two billion dollar economic input that we have.
Speaker 1: So um. You know, I think that there's always some
Speaker 1: things that can be improved upon, but I think the
Speaker 1: opportunities for beer are great. I think the opportunities for
Speaker 1: our country are very coming out of this, uh, this
Speaker 1: pandemic period, so I'm very hopeful. All right, Well, great
Speaker 1: to check in with you. I really appreciate it. Jim
Speaker 1: and Greevy, he's president, chief executive officer at the Beer Institute,
Speaker 1: joining us on the phone from New Jersey. Some optimism,
Speaker 1: certainly for his industry.