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Beer industry pours US$878 billion into global GDP

The beer sector delivered US$878 billion to the global gross domestic product (GDP) in 2023, according to a new report by the World Brewing Alliance (WBA).

The research, conducted by Oxford Economics for the WBA, is the largest study to have ever undertaken on the economic impact of the brewing industry and includes figures from 185 countries and 76 in detail.

The study, which acts as a global overview of the industry’s contribution across the entire journey from raw materials to beer, has also revealed that the beer sector supports 33 million jobs, which equates to one in every 100 jobs globally.

The research revealed that, when breaking down the 33 million jobs supported worldwide, “brewers directly employed 620,000 people and supported 11.3 million jobs along the supply chain and 21.2 million jobs through the downstream value chain, including distributors, retailers, and hospitality venues”. This means that, overall, “brewing supports activities in more than 20 other industries”.

According to the findings, “the expansive nature of the beer industry sees every US$1 million in GDP directly generated by the global brewing industry, its expenditure on inputs, wages, and the economic activity from the sale of beer” before it then goes on “to stimulate a further US$8 million in GDP across the global economy in 2023”.

The report outlined how the “beer sector is continuing to have a substantial economic impact on the global economy that extends far beyond its direct value. In 2023, brewers generated US$98 billion in direct GDP, but their extensive supply chains and downstream activities magnified this impact by ninefold (US$878 billion). The downstream value chain alone, which includes distributors, retailers, and hospitality venues, accounted for US$499 billion (57%) of the sector’s GDP impact”.

Other significant contributions to global GDP from the report include how the sector is supporting public finances and it was noted how the beer industry “contributed US$376 billion in taxes through beer production, sales, and employment in 2023”.

In terms of supporting the local economy, the data revealed how “86% of brewers’ supplier spending is in businesses in the same country as the beer is produced”.

Data also revealed how “a further US$281 billion is supported by the brewers’ upstream operational and capital supply chains and wage-induced spending. This includes support through purchasing hops and barley from the agricultural sector, or manufacturing bottles, cans, and kegs”.

The WBA pointed out that “as only 14% of brewers’ supplier spending is spent outside the country [where] beer is brewed in, many local economies reap the benefits”. Additionally, the report highlighted that “this percentage is even higher in certain countries including Japan, Germany, and Brazil”.

The report revealed that between 2015 and 2023, “income in low-and lower-middle income countries have seen a 27% boost in GDP contribution and a 24% increase in jobs generated by the brewing industry”.

One revealing element showcasing how crucial the beer industry has become, was illustrated by findings showing how “the productivity of those employed by brewers is significantly higher than the average worker, driving economic growth and income opportunities, particularly in developing nations”.

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Looking deeper into the findings, the research identified how “in lower-income countries, brewers generate US$117,000 of GDP per worker, which is more than 18 times the average, while in high-income countries, this figure rises to US$238,200” and is evidence that “this productivity supports better-paid jobs and demonstrates the transformative power of value-added production, such as brewing beer locally from ingredients like barley and sorghum”.

The study also outlined how “by fostering industries that create value-added products, brewers [can] play a critical role in boosting per capita incomes and driving sustainable economic development in emerging markets”.

Emphasising this, the data also flagged how agriculture plays a pivotal role too, with the overwhelming majority of agricultural products, manufacturing, and services sourced from the same country where the beer is brewed. The findings backing this revealed how “in 2023, US$10.6 billion was spent by brewers on raw materials alone, which contributed a total of US$38 billion to global GDP”.

The findings revealed how “in low- and lower-middle-income countries, beer’s economic impact to the national GDP was nearly double that of the global average at 1.5% (vs. 0.8)” and noted how, interestingly, “in Cambodia, the sector’s share of national GDP reached an impressive 5.8%”.

The WBA has admitted that the “process from brewing to consumption also garners significant tax revenue on a global scale” and highlighted how, to reframe this, “the US$376 billion made through taxes in 2023 is near the equivalent to the government revenues of Poland”.

Globally, the beer sector now supports one in every 100 jobs (33 million). Of those, just one in 52 are directly employed by brewers, highlighting the magnitude of roles in other industries. Plus, in terms of agricultural employment, the results showed how “of the 33 million jobs sustained, one in five agriculture jobs are supported by or associated with the global beer sector”.

The report identified how “agriculture plays a huge role in the beer industry, with 6.4 million jobs tied to the sector in 2023” and noted that “farmers cultivated more than 60,000 hectares of land to grow nearly 120,000 metric tons of hops”. Plus, “production for barley was significantly higher, at 57 million metric tons”.

Speaking about the findings, WBA president and CEO Justin Kissinger said, “The beer industry has a huge, positive impact on the global economy, supporting a robust value chain that includes farmers, bottlers, shippers, and the hospitality sector.”

He explained: “Beer is local through and through. Economically, the vast majority of revenue for beer stays in the country where it’s consumed. Socially, beer is made with local ingredients and local styles and enjoyed as a part of customs and traditions all around the world.”

Kissinger reiterated how the beer industry takes its responsibility to its local communities seriously and has also now made “investments in crafting and promoting lower- and no-alcohol beer” to “give consumers more options for drinking with moderation or participating in customs with or without alcohol”.

Kissinger added: “What makes beer unique is that it is deeply rooted within its local markets, benefiting local economies and communities. This report shows that beer is not just one of the most enjoyed drinks around the world, but one of the most valuable industries too.”

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