Craft Beer And Its Breweries

     In this paper I will be talking about the U.S. beer industry and in short an overview of the brewing industry worldwide. I will talk about the barriers to entry, economies of scale, government intervention, pricing, current market trends, product differentiation, and imports. The focus being mainly on the U.S. brewing industry oligopoly. The U.S. brewing industry has three major players: Anheuser-Busch, SAB Miller, and Coors/Molson. Anheuser-Busch is currently the largest brewer in the world, producing over 100 million barrels a year. Anheuser-Busch currently owns over 50% of the market in the United States, with Miller trailing behind at 20% and Coors at about 11% with the rest of the market occupied by imports and craft breweries. When analyzing any industry, how easy it is for newcomers to enter the market is a great importance. If there are high barriers to entry

In a world where large, corporate breweries rule the market, craft beer is created to please an audience that applauds the styles, techniques and flavors. Though craft beer can be purchased through several different outlets, the best place to thoroughly enjoy the entire experience of the specially made beer is in the brewery where it was made. The article titled, “In Lean Times, a Stout Dream” in The Wall Street Journal1 states that, despite the hard economic times and consequent consumer cutbacks, sales of craft beer, the industry 's fastest-growing segment, rose

We’re told that craft beer’s share of the market rose 17.6% last year, accounting for 11% of beer volume and $19.6 billion of the beer industry’s $101.5 billion in sales. However, it’s also a market in which the sale of imported beers rose 6.9% in 2014 and where, according to Nielsen, the amount of Mexican beer alone sold in grocery stores within the last year is equal to the amount of all craft beer sold from supermarket and convenience store beer shelves. It’s also a market where, despite advances by both craft and imported beers, one of every five beers sold is a Bud Light. In fact, the 38 million barrels of Bud Light sold last year would not only make it the No. 3 brewer in the U.S. if it split off from Anheuser-Busch InBev BUD, -0.51%

As of June 2015, there are eight breweries in Huntsville, soon to be nine. This smallish southern city, population 180,000, has undergone a total transformation as far as its craft brewing industry is concerned. Like so many other American cities, beer has come into the vogue, but few if any can claim to have experienced such as a rapid, radical, city-defining seismic shift. In just five years, “old veteran” brewing presences have been established and a younger generation has come along to reap the rewards of a clientele that continues to refine its taste. It’s still very much a work in progress, but to compare the “before” and “after” statistics is shocking. Thanks to a timely repeal of some antiquated laws that held the brewing industry back-a home brewing ban, an ABV cap, a ban on large-format bottles-craft beer is now free to thrive.

The craft-brewing segment of the beer industry has experience fluctuations in demand from a high of 58% growth in 1995 to a decline of 5% annually from 1997 to 2003 (Gilinksy et al., 2014, p. C-92). However, it is now experiencing rapid growth. At the commencement of 2012, 6.5% of U.S. beer sales were generated by craft brewers and that number increased by 15% by the conclusion of the year (Gilinksy et al., 2014, p. C-92). The growth of the market presents LBC with an opportunity to generate additional revenue.

The contest in the beer marketplace dropped in four disparate categories. Main and second-tier internal producers, import beer firms, and specialty brewers. The Main internal producers like Anheuser Busch, Miller Brewing Firm and Adolf Coors Company, accounted for 74% of the marketplace in Massif Man’s region. The subsequent tier internal producers had 12.5% allocate, import beer firms had a 12% allocate and the craft beer industry owned the rest. Massif Man Brewers were a subsequent tier company.

Another weakness of Anheuser Busch is their lack of exploration into the craft beer market. Today’s consumers are looking for more variety and something different in their beers. In this new market Anheuser-Busch’s focus on tradition could possibly handicap them and limit their potential for growth. Annheuser-Busch explored the possibilities of this market. They could attract more beer drinkers outside of their loyal customers.

Molson Coors is a thriving international brewing company that has nine Signature Brew drinks and 123 Special Brew drinks that ranges from non-alcoholic to alcoholic (Molson Coors Brewing Company, 2016b). They have multiple markets around the world which contributes to the success of the company in the brewing industry. This report analyzes Molson Coors’ internal and external environments which determines their position in the brewing industry. It also discusses strategies the company uses in order to be successful in their industry. Molson Coors shares the industry with its main competitors but has its own uniqueness that makes its business stand out. Molson Coors is a successful business that presents opportunities for economic growth.

Brisbane Brewing Co has had a huge impact on the Australian population as well as the population in other countries in which it operates because it is a large employer and retailer of breweries such as alcoholic and non-alcoholic drinks. Due to its size and business scope it affects the lifestyles and lives of the people in the areas it operates. On the other hand beers are turning of and wines are becoming more popular, awareness on the effect of alcohol, decline of consumption on- trade in bars and restaurants and increase of off- trade.

The brewing industry can be characterized by Porter’s Five Forces framework. New entries to brewing have a relative ease in creating home micro-breweries, which is aided by

Beer has a long history. In 2000 B.C.E., Sumerians had prepared eight different beer types, ranging from “strong,” “red brown,” and “good dark” (Mauk, 2013). Breweries have created their own recipes, brewed their own beers—some with alcohol, some without. Over the past few years, craft beer gained steady market share away from the national and international breweries (Murray & O 'Neill, 2012). Separating one beer from the next is the product itself, and what the product has to offer. Competition is ferocious due to more informed, sophisticated consumers, as well as globalization and the spread of technology (Murray & O 'Neill, 2012).

These radical idea’s and techniques lead to some micro-breweries becoming quite large in the mid 90’s. Fueled by big spending and gains in the dot com bubble many saw the trend in beer and cashed in. With a 50% growth from 1994-95, similarly by 1996 37% of beer drinkers had tried a micro-brew (Robison, John). Many companies such as sam adam where having IPO’s, where stocks are publicly available to trade. Sam adams opened on the first day at 18 dollars for a share and by the end of the first day it was up to 25 dollars. Red Hook also opened at 18 and was up to 27 and for a couple years didn't trade below 24. Many jumped on fueled by a gold rush. What’s more in 1994 64 new breweries opened, and by the 2nd quarter of 1995 59 had already opened (Gunn, Eileen).

Although sales of premium brands have fallen in a steady response to the growing popularity of the craft beer. The industry revenue has been stable over the past 5 years. As a result, from 2011 to 2016 the industry revenue is expected an increase and growth annually at 6.7 percent over the five years,with a total of $39.5 billion . (IBISWorld iExpert) In the long-term, these numbers are expected that grow 0.9 percent annually within the next five years. The potential growth will be seen in the traditional and premium beer sector. As a response, the giant companies in the industry Anheuser-Busch InBev and MillerCoors look forward into the merges and acquisitions as a strategy to maintain market dominance. The strategy is based on the

Beer is not a new thing. Alcoholic beverages date as far back as 10,000 B.C.E and Sumerians in 2000 B.C.E. had prepared recipes for eight different beer types, ranging from “strong,” “red brown,” and “good dark” (Mauk, 2013). Breweries have created their own recipes, brewed their own beers—some with alcohol, some without—and most recently there has been the craft beer explosion. Perhaps the Sumerian beer could be argued as the first craft beer. Over the past few years, craft beer has been gaining steady market share from the national and international beer breweries, with a focus on micro breweries and brew pubs (Murray & O 'Neill, 2012). Separating one beer from the next is the product itself, and what the product has to offer.

Beer Company 2 is a brewer of “seasonal and year-round beers with smaller production volume and higher prices” that “outsources most of its brewing activity” (pg. 120). It is financially conservative, and has undergone a “major cost-savings initiative to counterbalance the recent surge in packaging and freight costs” (pg. 120).