Imports Increase 5.8%, U.S. Beer Production Falls 0.4%

Imported beer volumes into the U.S. increased 5.8% in April from a year earlier, according to the Department of Commerce. April’s increase in imported beer shipments brings the year-to-date trend to -3.1%, the Beer Institute estimated.

Beer imports from Mexico in April increased 8.1% year-over-year for the month. The year-to-date trend for imported beer from Mexico is near flat at -0.2%.

Imports from Ireland grew 20.4% year-over-year in April, which increased the year-to-date trend to +8.8%.

Total industry supply increased by 0.9% in April. The industry trend year-to-date for the first one-third of the year is -2.0%.The first quarter brought stabilization to the beer category, with strong on-premise sales. April shipments held strong with the second consecutive month of total supply growth.

Speed Bump

Recent sales indicators, such as scan data and Beer Institute depletions, reveal that beer’s momentum has hit a speed bump.

But Andrew Heritage, Beer Institute chief economist, says that espite the shock from rising gas prices, the core demand drivers, such as favorable weather conditions and significant social events, for beer remain strong.

Consumer Sentiment Lays an Egg

In May, the University of Michigan reported that consumer sentiment reached its lowest level since the survey began in 1952.

The recent pullback is more than just gas prices: inflation readings ticked up a bit in recent months, and consumer expectations of future inflation have increased. Thanks to last week's strong jobs report, it's almost certain the Federal Reserve will raise the key short-term interest rate.

"In this landscape," says Heritage, "we expect consumer spending to moderate a bit—yet another cyclical shock. But the demand drivers remain in place despite these shocks: Americans continue to gather for key occasions."

"On-premise channels remain resilient, demonstrating that Americans truly have a drive to socialize. With the World Cup in June and extra fanfare for America 250, especially with the Fourth of July falling on a Saturday, several key occasions uniquely position beer to bring some momentum to the category this summer," he says.