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"There's something larger at play here." That's how Beer Inst chief economist Andrew Heritage described beer depletions down 5.4% yr-to-date thru Oct 18 during his state of the industry address at org's annual mtg in DC on Wed. It's "not a beer only phenomenon," as beer STRs (-3.9%) continued to outpace spirits (-4.1%) and wine (-7.6%) for running 12 mos thru Sep. And after slipping 7.7% in Q1, beer trends improved to -4.2% in Q2 and -4.7% in Q3, BI estimates. Despite plenty of structural headwinds besetting beer and alc bevs - Gen Z moderation, heightened anti-alc sentiment, digital distractions, changing social patterns, GLP-1 drugs, cannabis and increased competitive products - all those factors collectively account for only "about 25% of what's going on in the industry right now," Andrew estimates. "If it's not structural, it's gotta be cyclical," and "a lot of it has to do with the poor state of the consumer outlook." Indeed, macroeconomic uncertainty has "compounded an already pessimistic consumer," said Andrew. But they still "drink our product. They're just pinched and consuming a bit less overall." Some "value-seeking" behavior shows up in the data: economy segment grew nearly 0.2 share pts, even with volume down 4.4% YTD. Dollar stores also saw an 8% spike in beer sales, fueled by new outlets as well as shoppers migrating from grocery and convenience. Mass merch (-4.7%) outperformed c-store (-5.3%), grocery (-5.5%) and liquor (-6.4%) channels. And mainstream beer STRs (including superpremium) "stabilized" to -5.6%.Even tho they're no longer growing, imports still gained the most share of any segment, +0.3 pts, with depletions down 4% YTD. Yet other hi-end beer segments are extra soft. Craft STRs down 7.1%. And FMB/seltzer posted by far the worst trend of any tracked segment, down 12.3% and -0.5 share in BI data, far steeper than in tracked scans. On bright side, non-alc beer is "actually accelerating in our data" with depletions +22% and up 0.2 share. Beer still "dominates" NA adult bevs with 86% share, Andrew added.Can Beer Solve the Loneliness Epidemic? Probably Not, but It's a Start Backing beer as the alc bev of moderation remains a point of emphasis for BI, including via new "It's me, beer" campaign targeting DC policymakers with digital ads. Early efforts reportedly garnered 1.6 mil views over a 2-wk period and reached 63K insiders. Also increasingly paramount: beer's role in promoting socialization. "Young people are more lonely. But loneliness is also craving connection," Andrew commented. "Our industry has a solution&hellip;. We bring people together." While the beer industry can't change societal trends "all on our own," young people in particular "do want and crave social occasions. We just have to find a way to be the glue" for gathering, Andrew added. On-prem outperformance perhaps lends credence to that theory: depletions -4.5% YTD vs -5.5% off-prem. Andrew pointed to oppys to "engage young women" and "re-engage young men," as did a pair of panels highlighting attitudinal shifts among Gen Z.Dietary Guidelines Likely to Drop in Dec at the Earliest Advocating for US dietary guidelines based on sound science is also still among org's top priorities. And that's because there are still no guidelines in sight. Initially slated to release in Aug, updated recommendations for 2025-2030 are now likely delayed until at least Dec, HHS Secretary RFK Jr recently suggested. Beer Inst remains "hopeful the outcome will be positive for the industry," said org prexy Brian Crawford. But "we continue to wait." Biased inputs into that process was the hot topic at last yr's annual meeting. This go-round, a different bugaboo stole the spotlight: inroads made by unregulated intoxicating hemp products.Hemp Action Heating Up; New Congressional Pen Pals It's "crazy to me that the federal government is allowing this to happen," Brian commented. The beer industry is "willing to compete with anyone, but it needs to be done at a level playing field." Absent fed action on intoxicating hemp, "it's up to the states to regulate these products," he added. Yet activity continues to heat up even amid govt shutdown. In late Oct, 39 state attys genl sent a letter to Congress urging them to close the hemp loophole. And on day before BI's meeting, it and other major US alc bev supplier trade orgs penned their own letter echoing that Congress should "act immediately to remove hemp-derived THC products from the marketplace," at least "until a robust regulatory framework is established."In face of perceived existential threats, hemp bev backers rallied their own grassroots support, including from a broad coalition of 54 beer, wine and spirits distribs. They wrote a separate letter to Congress pushing back against proposals "that would create a prohibition on intoxicating hemp consumable products." Signees span a number of major players that collectively generate over $13 bil in revs and employ 20K people across 26 states. It's perhaps the most public pro-hemp stance to date for such a prominent group of distribs, even as industry perspectives remain starkly split.We look forward to seeing many of you at the Beer Insights Seminar in NYC this Sunday evening and all day Monday!Best Wishes,

BI Hones in on Moderation, Socialization and Hemp at Annual Mtg; Beer STRs Down 5.4% YTD

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