Steady growth from the past five years will continue as companies consolidate
Los Angeles, CA (PRWEB) April 19, 2012
The Global Beer Manufacturing industry underwent a period of strong growth prior to the financial crisis. Despite declining per capita beer consumption and relatively flat volume growth across traditional North American and European markets, beer producers benefited from phenomenal growth in higher value craft and foreign-label beers. At the same time, rising disposable incomes and consumers shifting from locally produced, subsistence products to higher quality, attractively branded beer underpinned rising beer consumption and strong volume growth in emerging markets in Latin America, Eastern Europe and Asia.
This run of growth came to an end in 2009, as the global financial crisis and ensuing economic downturn caused sales volume to decline across most key markets and consumers to switch back from premium to discount beers. “Conditions in the industry have since improved, but the faltering global economic recovery, particularly in developed markets, continues to weigh on growth,” said IBISWorld industry analyst Steven Connell. Emerging markets have been the major drivers of growth since 2009, with the global brewers investing heavily in Latin American and Asian markets. Industry revenue is forecast to grow by 2.4% during 2012, to total $156.4 billion. IBISWorld expects that industry revenue will increase at an annualized 1.8% over the five years through 2012.
The industry has undergone significant consolidation over the past five years. During 2008, InBev took over Anheuser-Busch to form the world's largest brewer, AB InBev. In response, SABMiller and Milson Coors combined their US operations to better compete with the new brewing giant. The other major players in the industry, Heineken and Carlsberg, have also been active over the past five years, jointly acquiring Scottish and Newcastle before splitting its global assets. Smaller players including Grupo Modelo, Asahi and Kirin have been on the hunt for acquisitions. During 2011, rumors of a mega-merger between AB InBev and SABMiller began circulating but IBISWorld does not expect this to eventuate. During late 2011, SABMiller snared Australian brewer Foster's Group.
Conditions in the Global Beer Manufacturing industry are forecast to strengthen from 2013 onwards, underpinned by renewed demand for higher value imported and craft beers in developed nations and strong volume growth and rising beer consumption in developing nations. According to Connell, the spate of consolidation in the past five years will aid stronger growth, with the top four brewers boasting extensive portfolios of brands covering all global regions and privileged access to burgeoning markets in Latin America, China and Eastern Europe.
Global industry consolidation has increased in recent years. In 1998, the top 10 companies reportedly accounted for 34% of the global beer market, with this share increasing to over 60% in 2012. IBISWorld rates the level of industry concentration as medium, with the top four players accounting for about 50% of industry revenue. The top four players are Anheuser-Busch InBev, SABMiller plc, Heineken N.V and Carlsberg. Accounting for the minority share holdings that these major players have in other brewers would produce a somewhat higher ratio. In contrast, the global spirits manufacturing and wine manufacturing industries have four-firm concentration ratios of about 24%. However, concentration in these industries is also increasing. It is expected that concentration will increase in the Chinese brewing industry. Presently, the three largest beer producing firms account for 25% of production, with the rest being produced by small to medium-size breweries. Since China is the largest beer market in terms of consumption, a significant increase in concentration in this market may have significant effects on the entire market. For more information, visit IBISWorld’s Global Beer Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry buys barley, malt, sugar, yeast and other ingredients, which are processed into various beer products, including draught, bitter, heavy, light and cold filtered lager, as well as ale and stout. The beer, ale and stout is packaged in kegs for sale to pubs, bars and hotels and also packaged in cans and bottles for sale to wholesale and retail alcoholic beverage distributors.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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 http://www.ibisworld.com or call 1-800-330-3772.