The American Business Journal: American Brewers Association

American Brewers Association
================================================================================
admin on 30 March, 2010 02:06:00
 
Americans love football and their beer. In fact, 2008 sale figures show U.S.
beer sales surpassed sales of wine and liquor combined. Since then, American
craft brewers have seen steady growth, capturing just 6.3 percent of the overall
beer sales. Against all the odds, craft brewers have been successful sector in a
weakened U.S. economy.
To put things into perspective, sales for craft brewers ($6.3 billion in 2008)
were similar to sales of champagne in the U.S. at that same time. Despite these
numbers, however, the local brewpub, independent microbrewery or regional craft
brewer has been beating the odds amidst some very tough challenges. To navigate
through the hoops and hurdles in the competitive sector, an association was
formed.
Founded in 1978 by Charlie Papazian, the small organization was originally known
as the American Home Brewers Association, although it later changed its name to
the Association of Brewers. Over the years, it evolved to represent the
interests of all brewers across the country. “Some people took up home
brewing as a hobby. Others became professional brew masters and opened their own
breweries,” explains Bob Pease, vice-president of the Brewers Association.
In 2005, it merged with another group called, the Brewers Association of
America. Today, it is widely known as the American Brewers Association (ABA).
Today, the Brewers Association is a not for profit trade organization for small
craft brewers in America.  “We’re an organization of about $8
million in revenue annually and about 30 fulltime employee,” tells Pease.
Getting a lay of the land
About 1,100 brewery members and over 19,000 members of the American Homebrewers
Association are joined by the allied trade members, beer wholesalers, as well as
other associates and the Brewers Association staff to make up the current
organization that represents roughly 70 percent of all brewers in the United
States.  “We are the largest brewery association in the world that is
active in many areas, such as government affairs, statistical research, advocacy
and marketing campaigns,” tells Pease.
There are two types of members: the professionals and home brewers (which are
about 18,000). “The reason why we do that is because there is a lot of
synergy between the two groups. Most of the time, a lot of successful brewers in
this country started as amateur or home brewers. For each of those, we publish a
bi-monthly magazine (membership benefit) as well as 55 books titles,” says
Pease.
Regulatory challenges keeps staff busy
So many regulatory issues keep the ABA staff busy. However, there is one tax
bill that has them focused in their efforts. This is tax bill, which was
proposed by Senator Richard E. Neal of Massachusetts and co-sponsored by a
fellow congressman, calls for a reduction in federal excise tax for our brewer
members. The proposed legislation would mean a reduced federal excise tax from
the current level of $ 7.00 on first 60,000 barrels of production to $3.50. For
every barrel above 60,000 and up to $2 million a small brewer would pay $16.00
instead of $18.00. This is a good thing for independent brewers.
“This proposed tax structure would apply to any brewery that produces six
million barrels of less. This is a major initiative for us in 2010. It
represents a significant, real life savings for our members. In this economic
climate, some people may scratch their heads and ask,’ why a tax
cut?’ But we’re positioning this initiative as a job creations bill
which, as we all know, the unemployment rate is a hot topic,” explains 
Pease.  Interestingly, the number of breweries has gone from 40 in 1978 to
roughly 1,500. All of them are small, independent mainstream businesses that are
employing between 10-50 people.
“We feel it is important to invest in these businesses and provide a tax
cut… At the end of the day, it will result in more tax revenue for the
government because our member breweries will invest in hiring new employees,
buying new equipment, producing more beers, which will in turn lead to more jobs
and more tax revenue,” says Pease. On the state level, there are 50 unique
laws per jurisdiction and equally just as many challenges in each area.
“We try to work out issues at the state level with regional brewer
associations so, they can fight those battles on the state level,” he
adds.
In a recent statistical report that monitors national production figures, the
Brewers Association says the market share was a little over 4 percent in 2008
and that figure is expected to increase for 2009. “That survey [referenced
above] is the backbone of our statistical analysis. We’re helping our
members attain a 5 percent market share—that’s the next benchmark
we’re looking to achieve,” shares Pease. “By 2013 and after
that, we’ll be trying for 10 percent. Imports have about 12 percent in
U.S. market share and global brewers have the remaining 88 percent,” he
adds.
Positive outlook for brewers’ future
The Brewers Association maintains an “extremely optimistic” outlook
on the growth potential for American craft brewers both domestically and abroad.
“The trends are very favorable for our members in terms of where they are
headed,” tells Pease. “There is a lot of room on the education side
for the consumer on the diversity and quality that comes from small, independent
businesses,” he says.
Meanwhile, fellow beer fans and industry professionals alike are encouraged to
attend ABA’s signature event, the American Beer Festival, which is held
every year in Denver. It’s the largest gathering of brewers in North
America and surely, one not to miss.
www.brewersassociation.org