The 5 states making the most from beer

When you pop a cold brew this holiday weekend, you're helping some state's bottom line. These states collect the most from beer.

By 247 Wall St. Jul 3, 2013 4:05PM

Image: Beer (© Corbis)By Samuel Weigley, 24/7 Wall St.

 

Most states rely on a relatively small number of industries for much their employment and logoeconomic activity. The industries that most often come to mind are auto manufacturing, defense, government, financial services and agriculture.

 

As it turns out, the brewing and wholesaling of beer can be added to the list for several states. This beer economy can thrive in the United States because there are so many beer drinkers -- 6.38 billion gallons of beer were consumed in America in 2011, which is roughly equivalent to the amount of milk consumed that year.

 

Researchers who track the beer industry, led by the association of the industry’s brewers, the Beer Institute, recently reported results of a national study. They found that the manufacturing, retail and distribution sectors of American industry get an extraordinary boost from beer production. Among the 50 states, according to the report, Colorado and Missouri rely on beer for more than 6% of their gross domestic products (GDPs). The entire manufacturing industry is responsible for only 10% of the national GDP.

 

Related at 24/7 Wall St.: States with the fastest growing economies

 

The top three states, as measured by the beer industry’s economic effect on GDP, are Colorado, Missouri and Wisconsin. It probably is no accident that the country’s three largest brewers were founded in those states -- Anheuser-Busch InBev S.A./N.V. (BUD) in St. Louis, SABMiller (SBMRY) in Milwaukee and Molson Coors Brewing (TAP) in Golden, Colo. Each state still has a large number of brewery locations compared to other states, and the same is true for the employee count of brewers and related industries.

 

While much of the beer produced in these states is shipped around the country, states with larger brewing industries also tend to be associated with more beer consumption. Of the 10 states where beer production represents the highest proportion of GDP, seven consume more beer per capita than the U.S. average. In 2011, Americans consumed about 28.3 gallons per person. This includes New Hampshire, which drinks more beer than any other state in the country -- 43 gallons per capita.

 

The 10 making the most from beer also appear to be much more open to drinking as well. Of the top 10 states, only one -- Georgia -- prohibits Sunday sales of beer. All 10 of the states allow beer to be sold in gas stations or convenience stores, while eight other states around the nation prohibit it.

 

Based on total economic impact by state provided by the Beer Institute and GDP by state from the Bureau of Economic Analysis, 24/7 Wall St. calculated the 10 states where the beer industry accounted for the largest portion of the state economy. Among the data we included were the number of brewers and beer wholesalers in each state, as well as the jobs created by each industry and total tax contribution by the industry, all from the Beer Institute for 2012. Based on data published last year, the Beer Institute calculated the total amount of beer sold in the state each year, and, dividing it by the total population over the age of 21, estimated the average consumption per person.

  

These are the 5 states making the most from beer.

 

1. Colorado
> Beer as a pct. of GDP: 6.31%
> Beer economic output: $14.8 billion (3rd highest)
> GDP: $234.3 billion (18th highest)
> Jobs: 58,360 (13th highest)

 

No other state’s economy is directly affected by the beer industry more than Colorado. The beer industry produced $2,850 per resident in the state, more than in any other state by about $660. Moreover, approximately one in every 89 jobs in the state is tied to the beer industry, the highest concentration in the country. Colorado is home to the Molson Coors Brewing Company. The brewery in Golden is the largest brewer by volume in the company, producing more than 11 million barrels of beer each year. Colorado’s alcohol sales laws are fitting for the state with the largest brewing economy. Colorado doesn’t have any restrictions on beer sales in grocery stores, convenience stores, or gas stations, but it does prohibit wine and spirit sales in those places.

 

2. Missouri
> Beer as a pct. of GDP: 6.10%
> Beer economic output: $13.2 billion (6th highest)
> GDP: $216.1 billion (22nd highest)
> Jobs: 64,320 (11th highest)

 

More than 6% of Missouri’s GDP came from the beer industry, higher than in all states except for Colorado. The beer industry was responsible for generating about $441.65 in taxes per capita. St. Louis is home to the North American headquarters of Anheuser-Busch, which controls 47% of the U.S. market share for beer. The company announced plans in late 2012 to purchase Groupo Modelo for $20.1 billion, which would give Anheuser-Busch an additional 6% market share in the country. However, antitrust concerns from both consumers and the U.S. Department of Justice have stalled the bid.

 

3. Wisconsin

> Beer as a pct. of GDP: 3.90%
> Beer economic output: $8.7 billion (11th highest)
> GDP: $221.8 billion (21st highest)
> Jobs: 60,630 (12th highest)

 

Wisconsin’s beer industry generated more than $1,500 in economic activity per capita, more than in all but two other states. Wisconsin is also one of just three states that has more than one job in the beer industry for every 100 people. Milwaukee is home to the North American headquarters of SABMiller, which produces beers such as Miller Lite, Coors Lite and Blue Moon through its joint venture with The Molson Coors Brewing Company. The joint venture, called MillerCoors, has roughly 30% market share of all beer in the United States. The brewery in Milwaukee produces 10 million barrels of beer per year and employs 720 people.

 

4. Vermont

> Beer as a pct. of GDP: 2.40%
> Beer economic output: $552 million (7th lowest)
> GDP: $23.0 billion (the lowest)
> Jobs: 6,130 (6th lowest)

 

Compared to many states, Vermont’s beer industry is actually quite small, with a total economic output of just over $552 million, the seventh-smallest amount in the country. But it is a different story when comparing the industry to the state’s population as a whole. According to the most recent figures from the Brewers Association, a trade group representing manufacturers, Vermont has more craft breweries per capita than any other state. One of the largest microbreweries in the country, Magic Hat Brewing Company, is located in Burlington.

 

5. Ohio

> Beer as a pct. of GDP: 2.39%
> Beer economic output: $10.0 billion (8th highest)
> GDP: $418.9 billion (8th highest)
> Jobs: 82,730 (6th highest)

 

Ohio is one of just eight states where the total economic output for the beer industry was at least $10 billion. In addition, the industry provided jobs to nearly 83,000 people, more than in all but five states. Perhaps the most prominent microbrewery in the state is Great Lakes Brewing Company, which produces more than 125,000 barrels annually. Moreover, Columbus is home to an Anheuser-Busch InBev facility, while MillerCoors has a brewery in Trenton.

 

Click here to see the rest of the states making the most on beer at 24/7 Wall St.

 

Also at 24/7 Wall St:  Countries spending the most on the military

 

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