USA: Keg beer manufacturing reeling as bars remain shuttered due to Covid-19

U.S. keg beer manufacturing has been reeling this year as Covid-19 shuttered bars, Bloomberg reported on December 2.

About 3.7 million barrels of beer were put into kegs in the first half of 2020, down from about 7.7 million a year earlier, data released on December 1 by the U.S. Treasury Alcohol and Tobacco Tax and Trade Bureau show. A barrel is equal to about 31 gallons.

Beer geared for export and drinking on transportation also fell sharply - led by an 82% drop in vessels and aircraft usage as cruise-ship and plane travel declined.

“The fact that it’s not down more is a blessing,” said Lester Jones, economist at the National Beer Wholesalers Association. “It’s a beer mug half full rather than empty.”

With more people drinking at home, beer in bottles and cans increased from 74.6 million barrels in the first half of 2019 to 76.7 million for the comparable period this year.

Still, the overall downturn is impacting parts of the economy.

More than 651,000 jobs supported by the U.S. beer industry are forecast to be lost by the end of the year due to the Covid-19 pandemic, according to a report from the Beer Institute, the Brewers Association, the National Beer Wholesalers Association and the American Beverage Licensees. These losses include more than 3,600 jobs in brewing, 1,800 in distribution and 400,000 retail-related positions.

That report forecasts that the Covid-19 induced pandemic will result in retail beer sales declining by more than $22 billion.