Malt Production in the US Industry Market Research Report Now Available from IBISWorld

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Barley costs have been high and volatile for malt producers over the past five years, causing revenue and profit to contract during the recession. However, increasing global beer production has boosted foreign demand for the industry's products. In addition, the rising popularity of craft beer and the "buy local" trend is expected to further raise demand for domestic malt over the next five years. For these reasons, industry research firm IBISWorld has added a report on the Malt Production industry to its growing industry report collection.

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The rising popularity of craft beer and the “buy local” trend will keep the industry growing

The Malt Production industry, which dries and germinates barley and other coarse grains for use in beer production, experienced volatile, but positive growth over the past five years. Although barley costs were volatile and high, operators raised prices enough to partially counteract cost increases without significantly hurting demand, boosting revenue. Consumers had less disposable income during the recession and purchased less beer, which caused beer production volumes to decline slightly. However, the rise of craft beer maintained downstream brewers' demand for malt; craft brewers make up a small proportion of beer production, but account for about 18.0% of malt demand. Furthermore, increasing global beer production is driving foreign breweries to source malt from the industry, lifting exports an annualized 10.4% to $262.2 million over the five years to 2012 and mitigating import competition. According to IBISWorld industry analyst Olivia Tang, the industry also faces threats from growing wine popularity. Shifting consumer preferences from beer to wine due to widely accepted studies showing wine's health benefits is lowering per capita beer consumption. Nonetheless, beer is a widely accepted alcoholic beverage. Because consumption levels fluctuate only slightly, breweries are still demanding malt. Therefore, malt producers' revenue is estimated to rise an annualized 5.2% to $1.1 billion in the five years to 2012, including an 11.0% jump in 2012.

Although firms passed on barley cost increases to downstream buyers in the form of higher prices, the price hikes covered only part of the cost increase. For example, malt producers raised prices in 2008, when the price of malting barley grew 29.9%, according to the US Department of Agriculture (USDA). But profit still fell in 2008. The Malt Production industry has a medium level of concentration. The Malteurop Group and Cargill Inc. are the two largest malt producers and have significant shares of the total tonnage produced and consumed in the United States. Over the five years to 2012, IBISWorld estimates that industry market share concentration has remained stable. There has been a degree of consolidation and company exits, but concentration levels have changed little. Domestic demand for malts continues to grow strongly, which has kept market shares stable despite increased import penetration, says Tang. While penetration from high-quality imports sourced from Canada and Europe continues to rise due to changing US consumer tastes for beer, this has been counterbalanced by the "locally grown" movement, which has kept demand for domestically produced malts high among brewers.

In the next five years, the industry is forecast to continue growing. A larger supply of barley from farmers will temper input price increases and allow industry operators to better anticipate cost increases. Also, the rising popularity of craft beer and a trend for domestic brewers to “buy local” for malt inputs will further drive demand for industry products. Imports will continue to threaten the industry, but rising exports will mitigate the effect. As a result, revenue is projected to rise in the five years to 2017. For more information, visit IBISWorld’s Malt Production in the US industry report page.

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IBISWorld industry Report Key Topics

Operators in this industry manufacture malt, a grain that has been steeped, germinated and dried for use in beer brewing and vinegar production. Malt is produced from a variety of grains, including barley and rye.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit or call 1-800-330-3772.

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Gavin Smith
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