The 10 States Making the Most on Beer

Most states rely on a relatively small number of industries for much their employment and economic activity. The industries that come to mind are auto manufacturing, defense, government, financial services and agriculture.

As it turns out, the brewing and wholesaling of beer can be added to the list for several states, including Colorado and Missouri. This beer economy can thrive in the United States because there are so many beer drinkers — 6.38 billion gallons of beer were consumed in America in 2011, which is roughly equivalent to the amount of milk consumed that year.

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In addition to the industry itself, sectors that claim to have large GDP footprints also use numbers from other parts of the economy stimulated by its economic activity. The auto industry regularly has said its manufacturing and sales revenue ripple out to car dealers, parts makers and the railroads and trucks that carry cars from factories to showrooms. At the start of the recession, the governor of Michigan claimed that, nationwide, this included one in every 10 jobs.

Researchers who track the beer industry, led by the association of the industry’s brewers, the Beer Institute, recently reported results of a national study. They found that the manufacturing, retail and distribution sectors of American industry get an extraordinary boost from beer production. Among the 50 states, according to the report, Colorado and Missouri rely on beer for more than 6% of their gross domestic products (GDPs). The entire manufacturing industry is responsible for only 10% of the national GDP.

The top three states, as measured by the beer industry’s economic effect on GDP, are Colorado, Missouri and Wisconsin. It probably is no accident that the country’s three largest brewers were founded in those states — Anheuser-Busch InBev S.A./N.V. (NYSE: BUD) in St. Louis, SABMiller in Milwaukee and Molson Coors Brewing Co. (NYSE: TAP) in Golden, Colo. Each state still has a large number of brewery locations compared to other states, and the same is true for the employee count of brewers and related industries.

While much of the beer produced in these states is shipped around the country, states with larger brewing industries also tend to be associated with more beer consumption. Of the 10 states where beer production represents the highest proportion of GDP, seven consume more beer per capita than the U.S. average. In 2011, Americans consumed about 28.3 gallons per person. This includes New Hampshire, which drinks more beer than any other state in the country — 43 gallons per capita.

The 10 making the most from beer also appear to be much more open to drinking as well. While many states have so-called blue laws, which restrict the purchase of alcohol and tobacco at certain times, on certain days or in certain stores, the states with the highest beer production generally lack such laws. Of the 10 states, only one — Georgia — prohibits Sunday sales of beer. All 10 of the states allow beer to be sold in gas stations or convenience stores, while eight other states around the nation prohibit it.

Based on total economic impact by state provided by the Beer Institute and GDP by state from the Bureau of Economic Analysis, 24/7 Wall St. calculated the 10 states where the beer industry accounted for the largest portion of the state economy. Among the data we included were the number of brewers and beer wholesalers in each state, as well as the jobs created by each industry and total tax contribution by the industry, all from the Beer Institute for 2012. Based on data published last year, the Beer Institute calculated the total amount of beer sold in the state each year, and, dividing it by the total population over the age of 21, estimated the average consumption per person.

These are the 10 states making the most from beer.

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