Last Call: Number of Brewer’s Permits in 2022 Lowest in 10 Years; CPI for Beer at Home +8.6%

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TTB Brewer’s Permits Record Smallest Increase in a Decade

The number of brewer’s notices issued by the U.S. Department of the Treasury Alcohol and Tobacco Tax and Trade Bureau (TTB) increased by 732 in 2022, the smallest increase since 2023, Brewers Association chief economist Bart Watson noted.

Watson cautioned that the number of brewer’s notices issued (14,112) could be inflated because it contains notices issued to breweries that have since closed.

To qualify for a brewer’s notice, a company must have bond coverage from an insurance company before beginning to brew, according to the TTB.

More than 9,500 breweries operated in the U.S. at some point in 2022, Watson shared during his 2022 Year in Beer presentation last month. More than 200 closed, an increase from the 176 that closed in 2021.

In 2023, brewery openings – for which TTB brewer’s notices are a close but not perfect predictor – will reach their lowest point in more than a decade, Watson predicted.

Consumer Price Index For Beer at Home +8.6% in December; Outpacing Overall Inflation

The Consumer Price Index (CPI) for beer at-home increased +8.6% in December, compared to a year ago, according to the U.S. Bureau of Labor Statistics (BLS).

The CPI for beer at-home continued its trend of outpacing overall inflation, which is +6.5% compared to the same period last year. The beer at-home CPI also continues to outpace the CPI for spirits (+1.7%) and wine (+3.9%) in the off-premise channel, as well as overall alcohol at-home (+5.3%).

The CPI for beer away from home is up +6.1% in December 2022 compared to last year. In the on-premise channel, the increase in beer prices is trending below spirits (+7.4%) and wine (+7.8%).

The increase in the December beer at-home CPI followed a November jump that Brewers Association chief economist Bart Watson noted reached its “highest level since 1991,” when the federal excise tax doubled.

Morning Consult: Dry January Participation Declines

The number of people who plan to participate in Dry January – a month of abstinence from alcoholic beverage consumption – is on the decline, according to a Morning Consult survey. Participation has dipped to 15% in 2023, compared to 19% in 2022.

Morning Consult attributed the decline in Dry January participation to the number of overall consumers of alcoholic beverages declining. The number of millennials, described as “the generation that drinks the most frequently,” who say they drink alcoholic beverages declined from 69% in December 2021, to 62% in December 2022, Morning Consult reported.

The firm added that Dry January 2022 may have seen increased participation due to “two years of pandemic weight gain and a desire to hibernate at home (and more canceled social events) during the U.S. omicron surge.”

Awareness of Dry January is up to nearly one-in-four U.S. consumers, Morning Consult found. Additionally, 72% of previous participants said they are doing so again this year.

“There’s clearly a core group of participants who find perennial value in the benefits of the month-long break from drinking alcohol,” the firm wrote.

Additionally, seven in 10 participants in Dry January said they are committed to abstaining for the full month, with health benefits cited as the top reason for participation. Another reason: saving money, with 73% of participants citing finances as a reason.

Another term being thrown around recently is “damp,” a more mindful way of drinking that is pretty much old-fashioned moderation.

Boston Beer Taps New Agency for Truly Hard Seltzer Business

Ogilvy has been named agency of record for Boston Beer’s Truly Hard Seltzer, splitting from Goodby Silverstein, which had worked on the brand since November 2019.

Truly is the 10th largest brand family in the beer category, but has recorded double-digit declines in dollar sales at off-premise retailers for the past year, according to market research firm IRI.

Southern Glazer’s E-Commerce Platform Hits $3B in Revenue in 2022

SG Proof, the B2B e-commerce platform operated by multistate wholesaler Southern Glazer’s Wine & Spirits, has reached $3 billion in revenue, the company announced this week.

“We are thrilled with the way our sales consultants use Proof to expand relationships with their customers and showcase our world-class portfolio of brands,” chief commercial officer John Wittig said in a press release. “We will continue to invest in industry-leading functionality to equip our sales team and enhance the Proof platform as we aim to strengthen the bond between Southern Glazer’s, our customers and suppliers in 2023 and beyond.”

The platform launched in 2019 and has grown to serve more than 82,000 retail and hospitality accounts, according to Southern Glazer’s.

SG Proof and eRNDC – a similar B2B e-commerce platform operated by Republic National Distributing Company – were the targets of a lawsuit in March 2022, in which e-commerce platform Provi alleged the parent companies stifled its business.

Modern Times’ Anaheim Taproom Gets Hermit Crabbed

The former Modern Times taproom in Anaheim once known as Leisuretown (the one with the pool) will be replaced by another brewery in April 2023, according to the Full Pint.

Villains Brewing will inhabit the space, led by soon-to-be former Green Cheek brewer Brad Kominek and Isaias Hernandez, founder of barbecue restaurant Smoke and Fire Social Eatery. The coffee cafe in the space will be transformed into “a high-end” steakhouse, The Craftsman, while the brewery will operate in the rest of the space, the Full Pint reported. And the pool is staying put, per lease requirements.

Brewers Association Cautions Against Using Volunteer Labor

Using volunteer help to package beer or staff beer festival booths should be avoided, Brewers Association (BA) human resources partner Holly Haslam wrote in a blog post last week.

Although it can be attractive to craft beer fans who want to learn more about the industry and meet the staff of their local breweries in exchange for beer or other perks, the practice violates the Fair Labor Standards Act (FLSA), which bars private, for-profit companies from asking volunteers to take on activities that employees would or could perform.

“Paying individuals with beer or other goods only reinforces their legal status as employees, which would require them to be paid a wage by the brewery,” Haslam wrote. “Employees must always be compensated at least minimum wage (and overtime for hours worked over 40 in a workweek) for any labor provided, meaning that a brewery also may not accept ‘volunteer’ work from a regular employee.”

Production facilities are often dangerous workspaces for untrained volunteers, which heightens breweries’ risk exposure if volunteers are injured. All businesses with at least one employee are required to abide by safe regulations from the Occupational Safety and Health Administration (OSHA).

“Unfortunately, because volunteers are not being paid, and are therefore not employees, they would not be covered in most states,” Haslam wrote. “Having unpaid individuals performing work in your brewery makes the brewery liable for covering medical costs should the individual be injured while in the facility.”

Breweries can employ unpaid interns and trainees, but the FLSA requires that such arrangements pass the “primary beneficiary test,” which courts use to ascertain which party in the relationship derives the most good from the arrangement.

“The training received during the internship would have to be for the educational benefit of the trainee, not to create an advantage for the brewery, and must not be used to displace employees,” Haslam wrote.

“Prior to implementing an internship program, brewery and human resources leaders should consider:

  • Whether interns will receive compensation
  • What educational opportunities can be provided to interns in the brewery setting
  • How the objectives of the internship will relate to the trainee’s educational program
  • What duration is adequate for the trainee to learn necessary skills
  • How the trainee’s work will supplement that of regular staff
  • Who will manage the interns’ work and provide necessary feedback and support,” she continued.