Brewery Industry Paper

2906 Words12 Pages
Executive Summary
This report will provide an industry analysis for the beer brewing industry, discussing the attractiveness of the industry in regards to sustainable profitability and investment risk. First, we will start with an introduction to familiarize you with the three-century old beer brewing industry. We will discuss the ins and outs of the brewing industries operations, along with various industry products. We will analyze historic growth and earnings and make predictions for the next two years.
Next, we will analyze macroeconomic conditions that can potentially affect consumer spending on alcohol. We will discuss industry and firm specific factors that may affect the profitability and sustainability of each company, and the
…show more content…
However, the economy seems to be recovering faster than economists had originally predicted. With GDP and consumer spending up year over year, we feel that the worst is behind us and growth will continue globally through 2012. As unemployment starts to fall and credit starts to loosen up, we feel consumers will continue to increase their spending.
Although this may sound good for the brewing industry, this may not be so. In 2008, when the recession was at its peak, beer sales increased more than wine sales for the first time in nearly a decade. We can compare this event to Wal-Mart, who benefits during recessionary periods due to their cheap prices. But as the economy recovers and consumer spending increases, the upward trend in wine sales is likely to continue, putting pressure on breweries to increase sales by decreasing prices. This price war is harmful to the industry, and has a negative effect on profit margin.

Industry Analysis & Forecasts
When an industry has been around as long as the beer brewing industry has, it is no secret that it has reached a pinnacle. At the same time, it shows no signs of decline, therefore
Get Access