BBC16 Will Offer Beer Economics Crash Course With NBWA Chief Economist Lester Jones
The National Beer Wholesalers Association (NBWA) is a non-profit trade organization that represents America’s 3,300 licensed, independent beer distribution facilities.
NBWA Chief Economist Lester Jones will be in Tampa to offer BBC16 attendees a crash course in beer economics, drawing from more than 20 years of experience in applied economics to present beer writers with a better understanding of the demographics, marketplace trends and economic forces at work in today’s beer industry.
We caught up with Lester ahead of the conference to ask him a few questions about his job and the issues he’s tracking in 2016:
Q: Why did you decide you wanted to study the economics of beer?
A: Beer is a great product. It has been around for thousands of years – it’s amazing how far back beer reaches into our culture, our history and our economy. In the United States today, there are thousands of brewers and importers. Thousands of distributors, hundreds of thousands of places to buy beer and more than 90 million consumers. It is a diverse industry with many different products. There is a ton of data to track, analyze and report on every day.
Q: What does your job entail?
A: I collect, analyze and comment on economic data that impacts the beer industry — from distributors to brewers, retailers and consumers. And even suppliers like barley growers and can and glass manufacturers. It’s a very dynamic industry — the extent of people it actually involves and how many lives it impacts is quite amazing.
Q: Why did you decide to join NBWA?
A: Figuring out how it all works at the federal, state and local level and how all the components work together is a challenge. In brewing, they are in charge of producing, shipping and branding their beer. It’s the distributor’s responsibility to help sell and distribute the beer into retail, which is more dynamic, more complicated and more challenging from a logistics standpoint.
Q: What do most people not know about the economics of the beer industry?
A: Thousands of brewers and importers are creating thousands of brands, and those brands come in different packages — bottles, cans and kegs. That translates into more and more stock-keeping units (SKUs), which increases the complexity of the beer distribution business. The United States is the best beer market in the world, hands down, because of all this variety. But it comes at the expense of operational and logistical complexity. The beers that consumers see on shelves come through a complicated distribution system. That’s the beauty of the independent, three-tier system — it gives people all of this variety from all these brewers and importers.
Q: What are some of the sources you consult for your research?
A: I start with government data, including Bureau of Labor Statistics (BLS) and U.S. Census data. The Census tells you how many people are out there, including age and demographics such as the number of millennials, the number of Hispanics etc. That provides insights into the reasons why brands are purchased and consumed. Job, employment and wage data from the BLS are important because that’s where people earn money to spend on products like beer. I also work with NBWA’s members to generate data on the state level. So it’s a mix of federal and state data, along with industry data collected from our members.
Q: What are some of the key industry issues you’ll be tracking throughout 2016?
A: There are so many avenues to explore in 2016 when it comes to the beer market. First and foremost, we are now six years into an economic recovery, and signals are showing that we have a great macro-economic environment for the high-end craft and imports side of the business to continue to grow. Many of us are waiting to see when the trickle down will come to the premium and below-premium segments of the industry. Is 2016 the year? Also, with more than 6,000 permitted breweries in 2015, how many will we see in 2016? Mergers, consolidations and JV deals across the industry (in all three tiers) also will be front and center.
Q: What are you most looking forward to at the BBC16 in Tampa?
A: Exploring the Tampa beer market and “off-the-record” time with beer bloggers.
To learn more about the National Beer Wholesalers Association and America’s independent beer distributors, visit www.nbwa.org.
Don’t miss out on Lester’s presentation. Register for BBC today!