Trading Beers

Jock O’Connell

Now that China’s economy is finally imploding, and ports worldwide are ratcheting back their cargo forecasts for the next few decades, what’s left to talk about on a hot summer day?

Well, there’s always beer.

Actually, there’s nearly always been beer, the first written records of which date to 4,000 BC in either Mesopotamia or China. The debates among academics on the question of provenance can presumably get very rowdy. Similarly, the Vatican can’t seem to settle on a single patron saint of beer. Who else but the reformed libertine St. Augustine has been widely touted, as has Wenceslas, the allegedly Good King who imposed the death penalty on anyone caught exporting hops from his realm in Bohemia.

This month’s commentary might also be considered an ode to Anchor Steam, Ballantine Ale, and my Polish grandmother Amelia.

While still reeling from the news that San Francisco’s iconic Anchor Steam brewery was being shut down after a run that started in 1896—when Amelia was 18 years old living in a village ruled by Czar Nicholas II—I was scrolling through the internet platform formerly known as Twitter and noticed with some amusement that the Port of Vancouver had opted to commemorate International Beer Day (August 4) by crowing about “the over 15,000 million metric tonnes of beer” that had flowed through the port last year.

That’s an awful lot of beer, even for Canadians. For their sake, I’m hoping the “million” was a misplaced modifier. The Port of Vancouver’s boast naturally prompted me to wonder how much beer has been coursing through U.S. seaports, and whether either the pandemic or the emergence of a thriving craft beer industry had affected the trade. And, like Justice Kavanaugh, I’ve long had a personal affinity for beer.

My first taste was from a can of ale back in the 1950s. From time to time, Amelia, who lived in the flat just downstairs from my parents and me, would send me down the street to Ginsburg’s Market, where either Sidney or Saul, the brothers who owned the store, would oblige my grandmother’s relayed request by stuffing a six-pack of her favorite brew, Ballantine ale, into a brown paper bag along with a loaf of bread on top. Sidney insisted on the charade to conceal the contents from any prying eyes who might report them for furnishing alcohol to a minor. His brother Saul, who had been a Manhattan Project engineer in Oakridge, Tennessee during the war, was more skeptical of the ruse. Perhaps I was a slow learner, but it eventually dawned on me I could obtain beer for the asking. Which I proceeded to do for a few months around the age of twelve before questions were raised about the spike in Amelia’s alcohol consumption. That taught me the virtues of off-book accounting.

Back now to the nation’s trade in beer.

The first thing to realize is that most of America’s foreign trade in beer is conducted overland rather than by sea or air. While fine dining establishments might fetishize about an obscure Belgian bilge or a Japanese beer brewed from a rare strain of rice, Mexico dominates the U.S. market for imported beers with a share that has exploded from 40.0% twenty years ago to 80.2% last year (and 82.4% through the first half of this year). Canada, which held an 8.5% share of the market in 2003, has seen its share dip to 1.5%. So much for the appeal of Labatt and Molson.

As for the maritime trade in beer, statistics gathered by the U.S. Commerce Department reveal that 1,748,144 metric tons of beer (HS 2203) moved through American seaports

last year. It would probably surprise no one that America imports a great deal more beer than it exports. After all, the Budweiser brewed in America is universally dismissed as a much less tasty quaff than the suds brewed in, say, Budajovicӗ, the Bohemian city in Czechia (aka the Czech Republic) known in German as Budweis.

I speak with some personal authority here. My first taste of Czech lager came at a horrendously inopportune time for the Czechs. It was in the fall of 1968, and Prague had suddenly filled up with heavy-armed Russian “tourists” who had arrived to oust a Soviet bloc government (Alexander Dubcek’s) that had strayed too far from Kremlin orthodoxy. Perhaps the drama playing out on the streets enhanced the taste of the local brews I then sampled, but I haven’t noticed a decline in quality on any of the periodic quality-control visits I’ve made there since.

Even though our North American trading partners rule the U.S. market for imported beer, U.S. seaports haven’t been entirely cut out of the beer trade. But they do have a very serious trade deficit, as Exhibit A reveals. What’s apparent from this graph is that U.S. beer imports,

which peaked in the run-up to the Great Recession before stumbling badly, did stage a brief recovery before steadily falling off since 2015. At the same time, exports of American brews have been gaining, although the trade is, by most measures, relatively small beer. What’s interesting, though, is that the recent rise in U.S. beer exports closely parallels the rise of craft brews by small crafty brewers. Suddenly, it seems, we had ourselves a product foreign beer drinkers might buy, although the appeal of double and triple IPAs continues to elude me.

In truth, the products of some small brewers did make it abroad even during the depth of the export trade. In November 2014, for example, anyone in town to tour the new ditch being dug through the isthmus could find a certain hole-in-the-wall bar in Panama City’s Casco Viejo

district which kept a small supply of ale from the Shipyard Brewery in far-off, exotic Portland, Maine, a city oddly enough perched on Casco Bay. Small world. U.S. West Coast (USWC) ports have had a fairly paltry share of the suds trade. Indeed, as Exhibit B testifies, ports along the Atlantic Seaboard handle most of the nation’s beer trade. Gulf Coast ports have lately overtaken West Coast ports as conduits for beer shipments.

Exhibit C displays data on U.S. beer imports by port-of- entry. I was taken aback to see that only 10.6% of the nation’s total beer trade (by weight) moved through the country’s Pacific Coast ports last year. By contrast, 44.1% was traded through the Port of New York/New Jersey alone. In fact, more beer was traded through Port Houston (14.0%) and the ports of Florida (14.0%) than through all USWC ports. The Ports of Los Angeles and Long Beach together accounted for 8.6%, while the Port of Oakland (1.5%) and the Northwest Seaport Alliance (0.3%) saw relative trickles. Indeed, the Ports of Tacoma and Seattle handled 5,714 metric tons of suds last year, much less the spurious volume Vancouver claimed. 

What’s the story here? Are residents of the Western States that much more into wine or coffee or bottled water or has the soaring cost of coastal living driven more people to

the hard stuff? Or has the proliferation of craft breweries west of the Rockies suppressed the demand for imported brews? (Note to self: More research is obviously needed.) 

The U.S. Department of Agriculture keeps tabs on the dollar value of American beer exports. As Exhibit D reveals, exports have not shown impressive growth. One major reason for the parlous growth numbers in offshore sales is that America’s dominant label, Budweiser brews some of its product overseas. Budweiser has been produced in Canada since 1980. Elsewhere, Anheuser- Busch claims that its masthead lager is available in over 80 countries worldwide, although it is marketed as simply Bud in much of Europe. Otherwise, the lawyers in

Budajovicӗ would raise a hackle or two about the ancient rights to the Budweiser brand.

Conversely, not all “foreign” beer sold in this country is brewed abroad. Beck’s beer, zum Beispiel, trades heavily on its German heritage. But the Beck’s sold in the U.S. has been brewed in St. Louis since 2012. Similarly, Foster’s may play on its ties to, well, Australian boorishness, but chances are the can of Foster’s you’ve been drinking was produced in Fort Worth, Texas.

Even though America’s export trade is far from awesome, the USWC share of the outbound trade has plunged from 43.9% in 2003 to just 8.9% last year. The biggest gains were recorded by Savannah (7.8% to 34.65%) and Virginia (7.6% to 18.8%). Export shares at the Port of New York/ New Jersey jumped from 2.7% to 10.0%, while falling from 30.2% to 5.7% at the two San Pedro Bay ports. 

As with imports, Oakland and the Northwest Seaport Alliance accounted for a negligible share of U.S. beer exports. For the record, the top supplier of oceanborne imported beers to the U.S. market is the Netherlands (think Heineken), followed by Ireland (think Guinness), then Mexico and Germany with Italy rounding out the top five. U.S. exports, on the other hand, go principally to Chile, Panama, and Honduras. Obviously, no respectable beer-brewing nation imports much American beer. Right then! Who’s got the next round?

Disclaimer: The views expressed in Jock’s commentaries are his own and may not reflect the positions of the Pacific Merchant Shipping Association.