Breweries in the US Industry
Los Angeles, CA (PRWEB) October 01, 2013
Since 2008, the Breweries industry has benefited from consumers opting for cheap beer over other alcoholic beverages, due to low disposable income. As a result, industry revenue is expected to increase at an average annual rate of 3.8% to $28.2 billion in 2013. Still, breweries face increasing competition from other beverages, such as wines and spirits. According to IBISWorld Industry Analyst Agata Kaczanowska, “As consumers expand their tastes for such alternatives and disposable incomes improve, demand for traditional beer will drop.” Nonetheless, craft brewers have successfully competed with alternative beverages on the market with high-end beer products. IBISWorld expects revenue to grow slowly at 1.6% in 2013, despite significant industry price and consumer spending increases.
Specialty brewery start-ups and ingredient price increases, which was a result of shortages in hops and grains, were the chief factors dragging down industry profit since 2008. However, consolidation among the largest players enabled them to streamline operations. In 2008, the mergers between top US brewing companies Anheuser-Busch (AB) and InBev, and SABMiller and Molson Coors, pooled these international beverage behemoths, which control about 76.3% of US market share in 2013.
Trade has also heavily influenced industry revenue, with imports declining and exports benefiting from a weak dollar. Despite declines, imports will account for an estimated 13.6% share of domestic demand in 2013, or nearly $4.0 billion. Meanwhile, exports are expected to account for 10.2% of 2013 revenue; during the five years to 2013 exports are estimated to grow 16.1% annually on average to $2.9 billion. Imports and exports are anticipated to continue increasing as a share of industry revenue, especially as consumer sentiment improves in the five years to 2018.
The craft and premium beer segments are expected to bolster revenue growth during the next five years, but will be slightly offset by contraction in total industry sales volume. Since the market for specialty brews is saturated, Kaczanowska says “a slowdown of new businesses entering the industry is expected to benefit the industry's bottom line.” Sales of higher-margin premium beers will hurt industry profit in the short term due to higher input costs. The Breweries industry has a high level of concentration, with the two largest companies being Anheuser-Busch InBev and MillerCoors LLC.
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IBISWorld industry Report Key Topics
The Breweries industry primarily produces alcoholic beverages using malted barley and hops. This industry excludes wine, brandy, cider, and distilled beverages such as vodka and rum. Moreover, bottling purchased malt beverages and malt manufacturing are also excluded from this report.
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.