THE 2004/2005 OUTLOOK FOR THE AMERICAN BEER MARKET With Long-Term Forecasts Through 2012

TABLE OF CONTENTS

SECTION I: EXECUTIVE OVERVIEW

• Analysis:
  • U.S. Beer Market 1
  • Foreign Trade 2
  • Canadian Beer Market 3
  • Factors Affecting Demand 3
  • U.S. Regional Markets 4
  • Advertising Trends 4
  • Distribution 5

SECTION II: THE U.S. BEER MARKET

• Analysis:
  • Overview 6
  • Sales by Domestic Brewers 7
    • Overall Sales 7
    • By Package Type 8
  • U.S. Production 8
  • U.S. Taxpaid Withdrawals 9
  • Global Consumption 9
  • U.S. Consumption 10
    • Overall 10
    • By Region 10
    • By Region, Packaged vs. Draft 11
  • Market Segmentation 11
  • Global Market Shares 14
  • U.S. Market Shares 14
  • Nonalcoholic Beer 16
  • New Beverage Product Introductions 17
• Tables:
  • Sales of Malt Beverages by Domestic Brewers:
    • Total 19
    • Graph: Total 20
    • By Type of Package 21
    • Packaging Mix 22
  • Total U.S. Production of Malt Beverages 23
  • U.S. Taxpaid Withdrawals of Malt Beverages:
    • Total 24
    • Packaged vs. Draft 25
  • Leading Global Beer Markets, Based on Consumption 26
  • U.S. Malt Beverage Consumption:
    • Total 27
    • Graph: Total 28
  • Regional Breakdown of the U.S. 29
  • U.S. Beer Consumption:
    • Graph: Regional Breakdown 30
    • By Region 31
    • Packaged vs. Draft 33
    • Packaged Beer, by Region 34
    • Graph: Packaged Beer, by Region 35
    • Draft Beer, by Region 36
    • Graph: Draft Beer, by Region 37
  • U.S. Malt Beverage Volume Sales, by Segment 38
  • Distribution of U.S. Malt Beverage Volume Sales, by Segment 40
  • Volume Shares in the Global Beer Market 42
  • Graph: Volume Shares in the Global Beer Market 43
  • Volume Shares in the U.S. Beer Market 44
  • Graph: Volume Shares in the U.S. Beer Market 45
  • Supermarket Sales of Nonalcoholic Beer 46
  • Number of New Beverage Product Introductions, by Type 47
  • Selected New Beer Products 48

SECTION III: FOREIGN TRADE IN THE MALT BEVERAGE INDUSTRY

Part A: U.S. Balance of Trade

• Analysis:
  • Overview 58
  • Trade Deficit 58
• Tables:
  • U.S. Balance of Trade for Malt Beverages 60
  • Graph: U.S. Balance of Trade for Malt Beverages 61

Part B: U.S. Imports

• Analysis:
  • Overview 62
  • Trends in U.S. Imports 63
  • Top-Selling Imported Brands 63
  • Leading U.S. Import Sources 65
    • Mexico Tops the List 65
    • Other Leading Sources 65
  • Prices for U.S. Imports 66
• Tables:
  • Import Penetration in the American Beer Market 67
  • Total U.S. Imports of Beer 68
  • Beer Import Volume: Barrels and Gallons 69
  • 20 Top-Selling Brands of Imported Beer 70
  • Top 20 U.S. Import Sources: Value 71
  • Dollar Market Shares of the Top 20 U.S. Import Sources 72
  • Graph: Dollar Market Shares of the Leading U.S. Import Sources 73
  • Top 20 U.S. Import Sources: Volume 74
  • Unit Market Shares of the Top 20 U.S. Import Sources 75
  • Graph: Unit Market Shares of the Leading U.S. Import Sources 76
  • U.S. Imports of Beer, by Country of Origin and by Type:
    • Beer Made from Malt, in Glass Containers, Not Over Four Liters 77
    • Beer Made from Malt, in Containers Other Than Glass, Not Over Four Liters 79
    • Beer Made from Malt, in Containers Over Four Liters 81
    • Nonalcoholic Beer 83
  • Average Prices for U.S. Beer Imports, by Selected Countries of Origin 85
  • Selected Foreign Exchange Rates 86

Part C: U.S. Exports

• Analysis:
  • Overview 87
  • Trends in U.S. Exports 87
  • Leading U.S. Export Destinations 88
    • Mexico is Number One 88
    • Other Leading Destinations 90
  • China: A Promising Market for American Beer Companies 91
  • Prices for U.S. Exports 91
• Tables:
  • U.S. Exports of Malt Beverages as a Percentage of U.S. Manufacturers' Total Production 92
  • Total U.S. Exports of Beer 93
  • Beer Export Volume: Barrels and Gallons 94
  • Top 20 U.S. Export Destinations: Value 95
  • Dollar Market Shares of the Top 20 U.S. Export Destinations 96
  • Graph: Dollar Market Shares of the Leading U.S. Export Destinations 97
  • Top 20 U.S. Export Destinations: Volume 98
  • Unit Market Shares of the Top 20 U.S. Export Destinations 99
  • Graph: Unit Market Shares of the Leading U.S. Export Destinations 100
  • U.S. Exports of Beer, by Country of Destination and by Type:
    • Beer Made from Malt 101
    • Nonalcoholic Beer 103
  • Average Prices for U.S. Beer Exports, by Selected Countries of Destination 105

SECTION IV: THE CANADIAN BEER MARKET

• Analysis:
  • Overview 106
  • Canadian Beer Sales 106
    • Overall 106
    • Packaged vs. Draft 107
    • By Province 108
  • Canadian Beer Imports 108
  • Number of Breweries 109
• Tables:
  • Canadian Domestic Beer Sales:
    • Total Sales and Per Capita Consumption 110
    • Packaged vs. Draft 111
    • Distribution, by Package Type 112
  • Consumer Expenditures on Beer, by Province 113
  • Per Capita Consumption of Beer, by Province 114
  • Legal Drinking Age, by Province 116
  • Canadian Beer Imports:
    • Total 117
    • Imported Beer Sales, by Province 118
    • Distribution of Imported Beer Sales, by Province 120
  • Canadian Domestic Beer Sales:
    • By Province 122
    • Distribution, by Province 124
  • Value of Canadian Beer Sales, by Province 126
  • Canadian Beer Sales, Domestic vs. Imported 127
  • Canada/U.S. Dollar Exchange Rates 128
  • Number of Breweries in Canada, by Type 129

SECTION V: FACTORS AFFECTING DEMAND FOR BEER

• Analysis:
  • Overview 130
  • U.S. Beverage Industry 130
  • Prices for Beer 132
  • The Beer Consumer 133
    • Gender 133
    • Race 133
    • Age 134
    • Household Composition 135
    • Income 135
    • Occupation 136
    • Region 136
• Tables:
  • Per Capita Consumption of Selected Beverages 138
  • Growth Trends for Per Capita Consumption of Selected Beverages 139
  • Beer Consumer Profile 140
  • Regular Domestic Beer Consumer Profile for Convenience Stores 141
  • Light Domestic Beer Consumer Profile for Convenience Stores 142
  • Average Annual Household Expenditures, by Race and Hispanic Origin:
    • Beer and Ale 143
    • Alcoholic Beverages 144
  • Projections for the U.S. Resident Population, by Ethnic Origin 145
  • Average Annual Household Expenditures, by Age:
    • Beer and Ale 146
    • Alcoholic Beverages 147
  • U.S. Population Trends and Projections:
    • Total 149
    • By Age Group 150
    • Age Distribution 151
  • Average Annual Household Expenditures, by Household Size:
    • Beer and Ale 152
    • Alcoholic Beverages 153
  • Average Annual Household Expenditures, by Composition of Consumer Unit:
    • Beer and Ale 155
    • Alcoholic Beverages 156
  • Average Annual Household Expenditures, by Household Income:
    • Beer and Ale 159
    • Alcoholic Beverages 160
  • U.S. Per Capita Disposable Personal Income 163
  • Average Annual Household Expenditures, by Occupation:
    • Beer and Ale 164
    • Alcoholic Beverages 165
  • Civilian Employment, by Occupation 168
  • Average Annual Household Expenditures, by Region:
    • Beer and Ale 170
    • Alcoholic Beverages 171
  • U.S. Population and Household Trends and Projections:
    • Total 173
    • By Region 174
    • By State 175
    • Distribution, by State 177

SECTION VI: U.S. REGIONAL MARKETS

• Analysis:
  • Overview 179
  • Top Consuming States 179
  • Regional Markets 180
  • Per Capita Consumption, by State 181
• Tables:
  • The Market for Malt Beverages:
    • By Region 183
    • By Region and State:
      • Northeast 184
      • North Central 186
      • South 188
      • West 190
  • Per Capita Consumption of Malt Beverages, by Region and State 192
  • Per Capita Malt Beverage Consumption, Ranked by State 195
  • The Biggest Winners and Losers in Terms of Per Capita Consumption 197

SECTION VII: ADVERTISING TRENDS IN THE MALT BEVERAGE INDUSTRY

• Analysis:
  • Overview 198
  • Beer Advertising Trends 198
  • Advertising to Teens? 199
  • Leading Advertisers 200
    • Anheuser-Busch Outspends the Competition 200
    • The Battle Between Coors and Miller 202
    • Heineken a Distant Fourth 203
• Tables:
  • Total Media Expenditures for Beer 205
  • Media Outlays for Beer, by Leading Advertisers 206
  • Graph: Top Five Beer Advertisers 207
  • Top Ten Advertised Beer Brands 208
  • Graph: Top Five Advertised Beer Brands 209
  • Beer Media Outlays, by Company and Brand 210

SECTION VIII: MALT BEVERAGE DISTRIBUTION TRENDS

• Analysis:
  • Malt Beverage Wholesalers 217
  • Retail Sales of Alcoholic Beverages 217
  • Liquor Stores and Drinking Places 218
  • Top Beverage Brand Marketers in North America 218
  • Retail Sales of Beer 219
  • Supermarkets 219
  • Drug Stores and Mass Merchants 220
  • Convenience Stores 220
  • Top Beer Brands 221
  • Competition from Other Beverages 222
  • Solving the Beer Cave Dilemma 223
  • "7-Eleven" Brand Beer? 224
• Tables:
  • Number of Malt Beverage Merchant Wholesalers and Number of Persons Employed 225
  • Sales and Inventory of Beer, Wine, and Distilled Alcoholic Beverage Wholesalers 226
  • Retail Sales of Alcoholic Beverages:
    • Total 227
    • Graph: Total 228
    • Packaged vs. Nonpackaged 229
  • Distribution Trends for Retail Sales of Packaged Alcoholic Beverages 230
  • Distribution Trends for Retail Sales of Nonpackaged Alcoholic Drinks 231
  • Retail Sales Trends in Food Stores, Liquor Stores, and Drinking Places 232
  • Number of U.S. Liquor Stores and Average Sales Per Establishment 233
  • Number of U.S. Drinking Places and Average Sales Per Establishment 234
  • Estimated U.S. Expenditures on Beer 235
  • Graph: Estimated U.S. Expenditures on Beer 236
  • Top Beverage Brand Marketers in North America 237
  • Retail Sales of Beer, by Outlet 238
  • Average Number of Monthly Beer Purchases, by Outlet 239
  • Top-Selling Beer Brands in Drug Stores 240
  • Convenience Store Sales of Beer, by Type 241
  • Distribution of Convenience Store Sales of Beer, by Type 242
  • Graph: Distribution of Convenience Store Sales of Beer, by Type 243
  • Average Sales of Beer Per Convenience Store, by Type 244
  • Beer Statistics for Convenience Stores 245
  • Top 25 Beer Brands 247
  • Wholesale Dollar Sales of Beverages, by Type 248
  • Top Ten Beer Wholesalers in the U.S. 249
  • Retail Dollar Sales of Beverages, by Type 250
  • Volume Sales of Beverages, by Type 251
  • Per Capita Volume Sales of Beverages, by Type 252
  • Distribution of U.S. Beverage Consumption, by Type:
    • Total 253
    • By Region 254

SECTION IX: BEER INDUSTRY PACKAGING AND LABELING TRENDS

• Analysis:
  • Overview 255
  • Metal Beer Cans 255
  • Glass Beer Bottles 256
  • PET Plastic Beer Bottles 257
  • Examples of New Packaging and Labeling Ideas 259
• Tables:
  • U.S. Manufacturers' Sales of Packaged Beer Containers, by Type 261
  • U.S. Manufacturers' Sales of Metal Beer Cans:
    • Total 262
    • By Can Size 263
  • U.S. Manufacturers' Sales of Glass Beer Bottles 264
  • Deposit Laws, by State 265
  • State Multipak Carrier Restrictions 272
  • State Detachable Pull-Tab Bans 276

SECTION X: BEER INDUSTRY PRICING TRENDS

• Analysis:
  • Overview 281
  • Producer Prices 281
    • Canned and Bottled Beer 281
    • Regular and Light Beer 282
    • Malt Liquor, Ale, and Other Alcoholic Beverages 282
  • Consumer Prices 283
    • Beer and Ale 283
    • Alcoholic vs. Nonalcoholic Beverages 284
• Tables:
  • Producer Price Trends:
    • Malt Beverages 285
    • Canned Beer vs. Bottled Beer 286
    • Regular Beer, by Package Type 287
    • Light Beer, by Package Type 289
    • Malt Liquor and Ale 290
    • Selected Alcoholic Beverages 291
    • Selected Nonalcoholic Beverages 292
  • Consumer Price Trends:
    • Beer and Ale, at Home vs. Away from Home 294
    • Alcoholic and Nonalcoholic Beverages 295
    • Alcoholic Beverages, at Home vs. Away from Home 296
    • Selected Alcoholic Beverages 297
    • Selected Nonalcoholic Beverages 298

SECTION XI: U.S. BREWERY INDUSTRY STRUCTURE

• Analysis:
  • Overview 300
  • Payroll and Material Costs 300
  • Value Added 301
  • Employment 301
  • Capital Expenditures 302
  • Plant Capacity Utilization Rates 302
  • Raw Materials 302
• Tables:
  • Number of U.S. Breweries 304
  • Number of U.S. Breweries, by State 305
  • Operating Structure 306
  • Gross Operating Margin 307
  • Value Added by Manufacture 308
  • Vertical Integration Index 309
  • Employment Structure 310
  • Total Labor Costs 311
  • Average Hourly Earnings of Production Workers 312
  • Cost of Living Index for Product Workers 313
  • Labor Productivity 314
  • Indexes of Real Labor Productivity 315
  • New Capital Expenditures 316
  • Plant vs. Equipment Expenditures 317
  • Ending Inventories 318
  • Plant Capacity Utilization Rates 319
  • Producer Price Trends for Malt and Malt By-Products 320
  • U.S. Production and Farm Prices:
    • Barley 321
    • Hops 322
• The Brewery Manager's Workbook:
  • How to Use This Section 323
  • Gathering Your Data 324
  • Developing Your Ratios 325
  • How Does Your Brewery Stack Up? 326
• Explanation of Terms 331

SECTION XII: COMPANY PROFILES

• Introduction 337
• Adolph Coors Company:
  • Overview 338
  • Products and Operations 338
  • Financial Performance 339
  • Company News 340
  • Financial Summary and Analysis 342
• Anheuser-Busch Companies, Inc.:
  • Overview 343
  • Products 343
  • Financial Performance 344
  • Company News 345
  • Financial Summary and Analysis 346
• The Boston Beer Company, Inc.:
  • Overview 347
  • Products 347
  • Financial Performance 349
  • Financial Summary and Analysis 350
• D.G. Yuengling & Son, Inc.:
  • Overview 351
  • Products 352
• Diageo plc:
  • Overview 353
  • Products 354
  • Financial Performance 354
  • Financial Summary and Analysis 355
• Foster's Group Limited:
  • Overview 356
  • Products 356
  • Financial Performance 357
  • Financial Summary and Analysis 359
• The Gambrinus Company:
  • Overview 360
  • Imports 360
  • Spoetzl Brewery 361
  • BridgePort Brewing Company 361
  • Pete's Brewing Company 362
• Heineken USA Inc.:
  • Overview 363
  • Products 363
• High Falls Brewing Company:
  • Overview 365
  • Products 365
  • Company News 366
• Interbrew S.A.:
  • Overview 368
  • Products 369
  • Financial Performance 369
  • Company News 370
  • Financial Summary and Analysis 371
• Kirin Brewery of America, LLC:
  • Overview 372
  • Products 372
• The Matt Brewing Company:
  • Overview 374
  • Products 375
• Miller Brewing Company:
  • Overview 376
  • Products 376
  • Financial Performance 377
• The Pabst Brewing Company:
  • Overview 378
  • Products 378
  • Company News 379
• Pittsburgh Brewing Company:
  • Overview 380
  • Products 380
• Pyramid Breweries Inc.:
  • Overview 382
  • Products and Distribution 382
  • Financial Performance 383
  • Company News 384
  • Financial Summary and Analysis 385
• Redhook Ale Brewery, Incorporated:
  • Overview 386
  • Products 386
  • Distribution 387
  • Financial Performance 388
  • Financial Summary and Analysis 389

SECTION XIII: INDUSTRY DIRECTORIES

• Introduction 390
• Directory of Selected U.S. Breweries 391
• Directory of Selected U.S. Wholesalers 398