A snapshot of the economy behind Game Day

For huge swaths of the American public, Saturdays and Sundays in fall are national holidays. They’re days set aside to pile up the plate and watch football in a weekly ritual of bratwurst and beer.

Behind that ritual are thousands of businesses that brew the beer you drink, stuff the sausage you grill, bottle the soda for the kids, and bake the rolls and pies you eat.

We pulled the financial information on 43,505 businesses that make up a small part of the huge economic engine behind Game Day. They did business in nine industries — categorized by their NAICS codes — that cover bakeries, breweries, meatpackers, snack food makers, and roasted nut vendors. Combined, these businesses had net sales of $248 billion in 2017.

Powerlytics data, however, can go deeper than the top line numbers. Because we hold the most comprehensive database of business financial statements in the country, we can provide extremely granular data on the financial health of these businesses, not just the aggregates.

Breweries

For example, we know that the 1,104 breweries in the northeast had $7.5 billion in sales in 2017. But we also know that 245 of those breweries were sole proprietorships, with sales of $98.2 million.

In the Northeast, breweries operated as sole proprietorships, which tended to be much smaller than corporations and partnerships, had a return on sales ratio of 11 percent, compared to a median ratio of 21 percent at corporations.

It wouldn’t be game day without beer commercials. Advertising accounts for 2 percent of the expenses at breweries organized as corporation. In all, they spend $674 million on advertising on $23 billion in sales. Beer advertisements were heaviest in the West, where they were about $238 million. Big breweries tend to dominate the airwaves. The 245 breweries operated as sole proprietorships in the Northeast, for example, had approximately $96 million in sales in 2017, and spent just over $1 million on advertising – not enough for TV time.

Overall, corporate breweries in the Northeast tended to have better margins than those in other regions. In the West and South, margins were about 18 percent. They stood at 16 percent in the Midwest.

Lenders and investors could use this data to identify promising new breweries, by comparing one brewery to another in the same region and according to legal form of organization. Breweries could use it when deciding what markets to expand into.

Barbecue and the South

But let’s turn our attention to the South, land of the Southeastern Conference (SEC), and perhaps more importantly, barbecue. What are the chances that the region runs out of meat before the next Georgia Tech game?

The chances are zero, according to our data. Businesses that process meat had, on average, about 41 days of inventory on hand. That means that if they were unable to make any purchases for some reason, there’d still be six Saturdays worth of pulled pork laying around (hopefully in freezers). Soda companies tend to have about two months’ worth of inventory on hand. The businesses that make tortilla chips, pork rinds, and flavored popcorn tended to keep about 43 days’ worth of inventory on hand.

Business beyond football

The days’ sales in inventory is an important benchmark that lenders can use to gauge the health of a business. Powerlytics’ data offers an extremely accurate benchmark with which to compare data provided by an applicant, and those comparisons can be made across regions, and across business sizes.

So, for example, a lender considering a loan for a meatpacker might see an inventory that is equivalent to 60 days’ worth of sales. At first blush, that might be a red flag, but the lender can also drill deeper and see that an inventory of that size is fairly normal for meatpackers in that region, or meatpackers that have a similar amount of revenue.

On the other hand, Powerlytics data is also used to streamline an application process. A brewery seeking a small loan may only have to report a few select pieces of information. Based on that information, the lender can compare the brewery to others, and in the process make a significant number of inferences about the financial health of it.

For lenders, this type of granular data is incredibly important. Our data sets capture and standardize financial data from over 30 million businesses in the US economy, giving lenders and others the ability to reduce risk and uncover opportunity.

But when it comes to Game Day eats, who comes out on top?

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Published 6th Sep 2018

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