Red, White, and BREW! – A Toast to America on the 4th of July
The Fourth of July is commonly celebrated with cookouts serving American favorites like grilled hamburgers and hotdogs accompanied by heaping portions of potato and pasta salad. While you’re surrounded by neighbors, close friends and family, you may find yourself raising a glass for a toast to freedom and the American dream. Whether your glass is filled with wine or beer, you have a rather complex supply chain to thank for your refreshment!
Each state (sometimes even each municipality or county) has its own regulations for shipping and selling alcoholic beverages. This complex web of rules stems from Prohibition in 1920, which banned alcohol under the 18th Amendment. When this ban was lifted and alcohol became legal again, the 21st Amendment (enacted in 1933) stated that states have the power to create and enforce their own set of laws regarding the production, distribution, and sale of alcohol.
Now, filling a cooler with an assortment of beverages is an American tradition that is widely practiced across all 50 states on Independence Day. It can be easy to overlook the complexity of how your different beers, wines, and assorted beverages made their way to your back yard.
In the United States, the supply chain for alcoholic beverages can be split into three sperate stages:
Producers include wineries, breweries, distilleries, and multinational brand owners, basically any entity that manufacturers an alcoholic beverage.
Wholesale distributors, or companies that are distributing alcohol to be sold for retail purchase, are required to have independent and clearly established operations in each state that they are selling in. They need to be certain they are following all local laws when distributing.
This refers to businesses such as liquor stores, convenience stores, or grocery stores. Establishments that serve alcohol for on-premises consumption, like restaurants and pubs, are also categorized as retailers. This is usually the only node of the supply chain consumers have visibility to.
Production of summer beers as well as beers and wines wrapped in red, white and blue packaging starts long before the summer season. Producers need to have some 18 million barrels of beer already distributed and ready for purchase in July alone. For the 4th of July, Americans spent an estimated $1 Billion+ on beer and $568 Million+ on wine! That’s a lot of raised glasses!
11 brewers are estimated to make over 90% of all U.S. beer, though some 3,400 local and craft breweries also do a good trade over the holiday. American-made beer remains the most popular in the United States, but beer originating in Mexico roughly equals the number of craft beers sold annually. The most popular beers drunk on the 4th of July in America include some familiar brands like Bud Light, Coors Light, Budweiser, and Miller Lite.
When consumers are enjoying patriotic themed or American-made beverages on the 4th of July, producers are preparing to distribute and supply retailers with autumnal drinks like pumpkin ales. July marks the end of the peak season for beer, meaning the busy season for suppliers is coming to an end. Beer sales dwindle to 17 million barrels in August before finally hitting 13.6 million per month by December.
Beyond the complexities associated with shipping any product themed specifically for a particular time of year, consumer preferences prove to be equally as problematic. Overstocking on a product that ends up not being well received by customers ties up capital and beverages can’t sit on a shelf forever. Companies manufacturing and distributing alcoholic beverages need to get their goods shipped quickly to ensure they have the best chance of selling. Equally as dangerous is being understocked and making a popular or newly successful product unavailable.
So when you’re enjoying the festivities on Independence Day this year, remember what went into getting your drinks to you. Happy 4th of July!