May Your Glass Ever Be Full!
Jennifer Nietz - Manager of Operations
March 2014 – This month’s industry report is on the U.S. Brewing market in celebration of St. Patrick’s Day. According to the Brewers Association, the overall U.S. beer market was worth $101 billion in 2009! Over 205 million barrels of beer were sold (1 barrel equals 31 gallons of beer). In the same year, there were 1,595 breweries in the U.S. fermenting everything from light lagers to chocolaty stouts. The last statistic released in June of 2013 showed that the U.S. is now up to 2,483 breweries. This is a market that is definitely growing and there are a lot of different industries that supply the country’s largest breweries.
The below industry information will show that over the past five years the brewing industry has had an annual growth over 2% and will continue to have growth over 1% a year, for the next five years. The important thing to note would be that there is a slight decrease for growth due to competition from the spirits industry; parallel industries that should require the same products and services that you may have to offer.
Key Statistics from IBISWorld.com
The key selling market segments for the Brewing Industry are the following:
- Cardboard Box & Container Manufacturing – Used for the packaging of bottles and containers in preparation for shipment
- Glass Product Manufacturing – Glass Bottles for beverages
- Printing – Labels and marketing
- Wood Pellets and Skids – Used in the preparation for the shipment
Taking a look at the cost structure of a typical brewer, IBISWorld estimates purchases of raw materials and ingredients will account for 58.3% of industry revenue in 2014. These raw materials include packaging: principally glass, aluminum and corrugated cardboard. Packaging costs have increased significantly over the past five years, particularly aluminum cans, due to commodity prices rising. If you are an organization that has a solution to reduce these cost or can provide products that are cost effective this is an industry that you could provide some value to.
Who should you prospect to?
As discussed above there are almost 2,500 breweries in the U.S., however, prospecting into all of them would be very time consuming. If you feel this is a market you can support there are a couple of top players you will not want to ignore. Anheuser-Busch and MillerCoors are the industry’s top players, holding a combined market share of 76.3%. Other top players include The Boston Beer Company (2.7%) Yuengling and Son Incorporated (0.9%) and Pabst Brewing Company.
Finally, the last area I wanted to explore with you is the advancement of technology within these environments. There have been some recent advancement in technology, such as more efficient boiling systems. Most of the developments now occur at the company level and refine brewing processes to improve the quality of product. Another area of focus is the reduction of energy consumption of brewing system. For example, Anheuser-Busch has a goal to use renewable energy in its production operations. IBISWorld is also reporting there is some interest from the industry to use solar power in the process to supplement purchased energy sources. Lastly, as focus on technologies used to distribute, store, package, and keep track of beer products are constantly changing and top of mind.
Wishing you the best of luck in 2014!
Questions or comments? Please contact Jennifer Nietz at jnietz@teamCOACT.com.