Question

The world-wide beer industry is consolidating. How do you react to brands you know being bought and sold?

Answer 1

As per the US Alcohol and Tobacco Tax and Trade Bureau and US Commerce Department, 2018, 83% of beer were domestically produced and 17% were imported from 100 different countries. According to NBWA Industry Affairs 2018, the brewer/importers having a majority of the shares are Anheuser-Busch Inbev (41%), MillerCoors, LLC (24%), Constellation (9%), Heineken USA (4%) etc and 21 years and older consumed 26.9 gallons of beer and cider in the year 2017 which comes to around $111.1 billion. According to the Brewers Association, a majority of growth came from microbreweries and brewpubs in 2017, with microbreweries accounting for nearly 60% of the craft category’s total growth. There are 8863 plus brewery locations and recently it increased by 1700+ in 2017. The business expansion has been sluggish relative to past history. Although there are 20,000 licensed alcohol beverage distributors and people prefer beer, then wine and spirits in the USA. Looking at the 10-year statistics of beer companies, it is evident that the market shares of all the companies have come down which is due to the litigations and arising disturbances among the companies. The big beer acquisitions have slowed down the beer industry growth. the recent acquisitions of AB InBev acquiring SABMiller, Molson Coors acquiring MillerCoors from SABMiller etc. According to CB Insights, the world's 6 largest brewers have made 55 acquisitions and 10 investments. Again the brewers are moving from alcoholic drinks to non-alcoholic drink by expanding their business. There is a significant increase in craft beers. In 2012, the craft beer shares were 6.5% and in 2018 it reached 12.7% of the total US beer market. The profit from the 4 companies which earn around 74% of profits is getting affected by the craft beer demand in the market. Carton cost of the beer is $70.75. Pints start at a cost of $4, $7 or $15. The prices of craft beer are quite competitive than other beers.