Beer: it's a recovering market, but the increase in raw material prices weighs heavily

The increase in prices of ingredients and utilities that began a year ago, in the summer of 2021, risks jeopardising the recovery trend of the Italian beer sector. Production, consumption and exports are close to pre-crisis levels but both industrial costs and excise duties weigh on the sector, reduced by 5 cents until December 2022 thanks to a provision in the latest budget law, but destined to rise again starting from 2023. What emerges in summary from the Assobirra report is a trend characterised by lights and shadows, as the president Alfredo Pratolongo underlined. Represents the home of Italian beer in Confindustria; born in 1907, today brings together over 40 associates between large, medium and small breweries, together with the 2 malt suppliers, which together cover more than 92% of the national production, represent 71% of beer released for consumption in Italy, with 144,000 people between direct and indirect employees.

Beer in numbers

In 2021, beer production reached 17.6 million hectolitres, exceeding the levels reached in 2019 (17.3 million/hl) and those of 2020 (15.8 million/hl), also thanks to the performance of export. Consumption, in parallel, reached 20.8 million/hl and did not reach pre-crisis levels, but numbers are higher than in 2020 (18.9 million/hl). Exports have recovered, with volumes equal to 3.8 million/hl, higher than 2019 (3.5 million) and 2020 (3.3 million). A confirmation, according to AssoBirra, of the appreciation of Made in Italy beer in countries with a strong beer tradition, such as the United Kingdom which receives 46.9% of exported Italian beers, the United States (8.6%) and Australia (6.4%). In the report, a decreasing trend emerges for imports of foreign beer compared to pre-pandemic period, with 7 million/hl in 2021 compared to 7.4 million in 2019.

The beer sector asks for politics to take action

In pre-pandemic (year 2019), the shared value generated by beer in Italy was 9.5 billion euros per year (18% attributable to the production phase and 78% to the sales and consumption distribution channel). "We're talking," Pratolongo emphasises "about 0.53% of our GDP." The supply chain, in 2019, employed 108,000 people and contributed 4.5 billion euros a year to state coffers. In 2020 alone, however, the sector lost 1.4 billion euros of shared value, which is about 15,000 jobs. A slowdown in investments is also a possibility. For example, the sector is trying to "increase the share of barley produced in Italy and bring it from the current 40% to 60% but it is a process that takes time and which risks being slowed down by the current situation." According to AssoBirra, to avoid further repercussions, new political action is urgently needed. Government and Parliament "must continue the process of reducing the tax burden: this would allow a boost and thus develop a dynamic sector, with a high rate of qualified youth employment."

Beer and sustainability

In support of the category, AssoBirra has launched a new marketing campaign based on the message "Beer, the flavour that goes with everything" and is committed to ecological transition. "Topics until yesterday mostly entrusted to the actions of individuals, today require a collegial approach," observes Federico Sannella, Vice President of AssoBirra. There are several areas of involvement: reduction of CO2, rationalisation of water consumption, optimisation of waste reduction, packaging. Although the increase in prices of ingredients and energy weigh on this last point. But work is also being done on agricultural production, logistics, distribution and relations with suppliers. "Good news comes from the collaboration with the agricultural supply chain: the production of Italian raw materials is in excellent health" concludes Sannella "and an important hops supply chain is in development."