This is marketing research on the beer industry and can include information on the background, market structure, definitions, competitors, trends and developments of beer and is related to other topics such as ales, lagers, wine, distilled spirits and alcoholic beverages.

Table of Contents

[edit] Background

Beer is an alcoholic beverage which has not been distilled after fermentation. The process of beer production is termed “brewing”. Beer is one of the oldest and most popular beverages in the world with its first mention dating back to Mesopotamia and Egypt. In the mid-1800s, the production of beer reached industrial scale and it gained significantly in popularity. A commonly used raw material is malted barley. Different raw materials are used in different geographies, including the use of fruit product bases such as a raspberries or blueberries. Since raw material and fermentation processes differ, the taste of beer can vary widely. Another common characterization of beer is by type of yeast used.

[edit] Market Structure

The U.S. market is divided by price and quality of beers. Beers are generally sold as Super Premium, Premium or Popular Priced beer. Both microbrews and brew-pubs have seen a surge in demand in the past twenty years. Other craft beer sales have also increased. American beer production overtook German brewer production in the 1990s. Microbrewery sales rose significantly due to the increased consumer demand for more varieties. Microbrewery growth has recently slowed as a result of over-expansion and mergers and acquisition activity has driven some consolidation.

In 2006, U.S. grocers had 4,294 Beer SKUs, 12,437 Wine SKUs and 7,153 Liquor SKUs. Of these, only 406 Beer SKUs generated 90% of total beer sales in the U.S. The typical beer consumer traditionally has been skewed towards male, young, low to moderate education, blue collar and from moderate income households.

Beer sales account for approximately half of all alcohol sales in U.S. in dollar terms. Total revenues exceed US $80 billion. Currently, the U.S. beer industry is characterized by almost flat consumption and is clearly dominated by three producers. The market leaders are Anheuser-Busch, Miller Brewing, and Adolph Coors. All three have expanded their respective market shares at the expense of other national brewers such as Strohs Brewery.

Among the 300 major brewers in the U.S. the market shares of the three major producers is high: Anheuser-Busch (45%), Miller Brewing (23%), and Adolph Coors (10%). In the past 10 years, market share for Stroh’s Beer, for example has fallen to 9.1% from 13.0%. The market leaders have achieved economic dominance over market by integrating the raw material procurement, providing manufacturing efficiencies and better marketing.

[edit] Industry Definitions

The most common types of beer include the following:

• Ale - defined by a strain of yeast and fermenting temperature. Saccharomyces cerevisiae is a common yeast used in making ale. Many top ranking yeasts are used for making ale. It is fermented between 15-24 C degrees. Typically ales have a sweeter and fuller body than other beers such as lagers.
• Lager- a bottom fermented beer of European origin. Lager yeast is a bottom-fermenting yeast (e.g., Saccharomyces pastorianus), and it is primarily fermented at 7-12 °C. It includes a second step including fermentation at 0–4 °C.
• Lambic Beer - specially known in Belgium made using wild yeasts not the artificially grown ones. Lambics use yeasts such as Brettanomyces bruxellensis and Brettanomyces lambicus.
• Pale and dark beer - pale beer was brewed as early as 1842 in the Czech Republic, typical examples being Pilsner Urquell, Bitburger, König Pilsener, and Heineken brands. Popular American pale beers include Budweiser, Coors and Miller.
• Grains- barley malt is the most common grain used to make grain beer while wheat, corn and rice are used as secondary grains. Rye, sorghum, and oats can also be used.

Important terminology in the beer industry:

• 1 US BBL (beer barrel) = 31 US gallons = 13.778 24/12oz cases
• STRs = Sales to retailers, or distributor sales
• STWs = Sales to wholesalers or shipments
• STCs = Sales to consumers or retail sales
• Supers = supermarkets or food channels
• C-stores = convenience stores

[edit] Market Metrics

Global Production

More than 133 billion liters (35 billion gallons) of beer are sold annually. This results in total global revenues of approximately US $295 billion (£147.7 billion) in 2006. The average American consumes 20 gallons of beer a year.

Top Global Import Markets for Beer

U.S. Market

Th growth of the craft beer industry was 12% by volume for 2006, producing 6.7 million barrels of craft beer in the U.S. The fastest growing craft beer sector in 2006 was microbreweries (up 16%), showing customer support for local breweries. Craft beer is the fastest growing segment reflected in supermarket scan data as well. Growth of 17.8% was stronger than all other alcohol beverage categories. Craft beer sales share is 3.20% by volume and 4.99 % by dollars and the craft beer industry has grown 31.5% over the last 3 years.

The Brewers Association, which tabulates industry growth data, reports that in 2006, 77.7% of the craft beer produced was made from the top 50 craft brewing companies. Microbreweries are those generally making under 15,000 barrels annually.

Top Markets (2001-2002 data):

[edit] Industry Players

Top Craft Beer players in the U.S.:

Brewer			State

Boston Beer		Massachusetts
Sierra Nevada		California
New Belgium Brewing	Colorado
Pyramid Breweries	Washington
Matt Brewing		New York

Top global beer producers by volume: 

Rank	Brand	Country (main)	   Brewer	Million barrels

1	Budweiser	USA	   Anheuser-Busch	38.1
2	Bud Lite	USA	   Anheuser-Busch	37.1
3	Skol	        Brazil	   InBev	        27.2
4	Corona	        Mexico	   Grupo Modelo	        23.0
5	Heineken	Neth.	   Heinken	        18.8
6	Coors Light	USA	   Coors	        16.6
7	Asahi SuperDry	Japan	   Asahi	        16.0
8	Miller Lite	USA	   SAB Miller	        15.9
9	Brahma Chopp	Brazil	   InBev	        13.9
10	Polar	        Venezuela  Cerveceria Polar	12.3
11	Tsingdao	China	   Tsingdao	        10.2
12	Amstel	        Neth.      Heineken	         9.4
13	Carlsberg	Denmark	   Carlsberg	         9.2
14	Guinness Stout	Ireland	   Diageo	         8.9
15	San Miguel	Phil.	   San Miguel	         8.8
16	Kirin Tanrei	Japan	   Tanrei	         8.6
17	Natural Light	USA	   Anheuser-Busch	 8.3
18	Baltika	        Russia	   Baltic Beverage       8.3
19	Stella Artois	Belgium	   InBev	         8.2
20	Kaiser	        Brazil	   Coors (Molson)	 7.6

[edit] Trends and Recent Developments

Sales bottomed out in the late 1990’s. It is currently estimated that beer consumption will grow 16% over the next 6 Years. Nearly 40% of the U.S. population are regular beer consumers. More people continue to drink beer over wine or other alcoholic beverages in the U.S. and that is unlikely to change in the coming decade. Craft beer growth continues to outpace growth in the overall beer category.

Market Drivers

Industry sources report three significant factors influence markets:

• Warm weather • Health perceptions • Mass-marketing campaigns

[edit] Sources

• Global Trade Atlas
• USDA