This is the 14th year in a row that StateWays is presenting the annual overview of the financial progress being made throughout the states, providing an overview of the beverage alcohol business and reports from all 19 control jurisdictions.
We’re grateful to the control state agencies and personell who provided extensive information to help us compile this yearly report. Our data details state-by-state dollar sales, revenue contribution, distilled spirits and wine (where applicable) sales volume, operating expenses, and the numbers of types of outlets and employees in the system. We’ve also included projected sales volumes revenue contributions for the next fiscal year. Where necessary, we’ve provided descriptions of any abnormalities or unique circumstances.
In addition to this individual state information, we’ve ranked the jurisdictions based on their total sales and pulled out some key statistics in aggregate. Once again, we were able to gather information from every jurisdiction to provide a complete picture of the industry and its growth throughout the control states.
The financial crisis is still having an impact across the country, and Fiscal Year 2010 reflects a still challenging environment. In addition to drops in consumer spending in many retail sectors, control states face anxious state government officials required to balance budgets in the red and consumers who are more politically involved than in past election cycles.
Total gross dollar sales grew by 1.8 percent to $8.719 billion. The increase is lower than previous years, but impressive given the economic climate. Overall revenue contribution to state coffers by control jurisdictions increased 2.5 percent to 3.027 billion (down from a 5.4 percent increase in 2009). Spirits sales grew 2.2 percent to 44.8 million cases nationally, and operating expenses rose slightly, by 2.2 percent, to $1.470 billion.
For fiscal year 2010, 15 control jurisdictions added agencies, state stores, or retail outlets, continuing a pattern of growth over the years. Eleven states added personnel to their ranks (though this number is difficult to determine given how jurisdictions mix full- and part-time staff).
The overall trend for control states has been positive for more than two decades, and that continued during the past year. Fifteen states showed increases in dollar sales, 12 increased their revenue contributions, and 14 experienced a rise in spirits case sales. Despite the uncertainty in many other industries, alcohol beverage continues to rise even in difficult times.
Many control states also benefit from the rise in efficiency created by technological advances. Many agencies continue to update and modernize, though this is always contingent on how much money state legislatures provide. The additional technology impacts headquarters, stores, and warehouses, resulting in noticeable progress on many fronts. State agencies are more and more successful at delivering revenue, as well as spearheading a variety of programs for enforcing beverage alcohol laws and increasing public education about alcohol product abuse.
States are also adopting a number of other initiatives, including reducing carbon footprints and embracing “green” programs, which are both socially responsible and profitable. This trend, along with enforcement and the impact of possible privatization, will impact states throughout Fiscal Year 2011 and beyond.
Several states stood out among those that reported gains in the categories we measured. Pennsylvania, by the top-ranked control state by nearly a two-to-one margin, saw its gross sales increase by $27 million. Second-ranked Michigan grew $5 million, for $935 million total in gross sales. New Hampshire, with a seventh-ranked $516 million in sales, grew $24 million from 2009. North Carolina’s sales rose a respectable $6 million, Ohio increased its gross dollars by $13 million, and Oregon saw nearly a $12 million increase.
The three states that decreased their gross sales all saw very modest declines. Alabama ($2 million), West Virginia ($0.3 million), and Wyoming ($0.7 million) were off slightly from Fiscal Year 2009, but their declines are statistically minute compared to overall revenue.
Total operational expenses rose slightly, by 2.2 percent, and reflect the growth of the industry more than anything else. For some time now, we’ve assumed that operational costs will continue to rise year-over-year as basic costs increase. As states open more stores, costs increase, and more money is needed for improvements to facilities or new technology. In Fiscal Year 2009, expenses rose 5.4 percent over 2008, so the increase is leveling off slightly. That represented a decrease compared to the rise in 2008, so the trendline is heading down. Part of the decline is due to shifting state regulations that place more operational costs on private businesses, and that trend may continue as multiple states face the prospect of privatizing more of their operations pending the outcome of elections and legislative decisions.
The following pages present a detailed analysis of the beverage alcohol industry in each control state. All figures and notations are gathered from each jurisdiction’s response to our survey. Here is the 2010 Fiscal Year in Review.
To view the individual state information, please click the "Download" link below.