Profit will improve as prices increase but competition remains fierce
London, United Kingdom (PRWEB) February 18, 2013
The Beer Production industry has endured a tough time during the past five years. According to IBISWorld industry analyst Steven Connell, “beer consumption has fallen sharply due to rising beer duty, the introduction of a smoking ban in pubs and growing competition from other beverages, such as wine and cider”. The onset of the recession, changing social trends and the ageing population have also taken their toll on the industry.
While sales of lager have slumped, craft beer and real ale have registered much stronger growth. Tired of mass-produced, generic-tasting beer, drinkers have become more discerning and willing to try new styles. Small brewers have responded by introducing Indian pale ales, Belgian wheat beers and cask-pulled porters. This has seen the number of breweries in the United Kingdom rise to its highest in over 70 years.
Despite this, the industry is estimated to grow by only 1.6% in 2012-13 as the bleak consumer mood and wet weather offset any Olympics-induced boost to sales. During the five years through 2012-13, industry revenue is expected to have grown at a compound annual rate of 0.4%, to total £8.53 billion.
The industry will remain under the pump over the next five years. Sales will continue to suffer as the weak economy, competition from other alcoholic beverages and changing social trends constrain demand. The introduction of a 40p minimum price will hurt supermarket sales of cheap lager but could prove a timely boon to pub operators. Brewers will increasingly turn to premium products and innovation to create value, with fruit-flavoured lagers and craft beers expected to prove popular.
Connell adds, “big brewers are also likely to turn to acquisitions to drive growth, with their sights set on nascent craft brewers”. Industry revenue is forecast to continue to grow at a modest rate over next five years through 2017-18.
The Beer Production industry displays a high level of market share concentration. The four major multinational brewers – Heineken UK, InBev UK, Molson Coors UK and Carlsberg UK – generate about half of industry revenue. This trend is repeated at a global level.
For more information on the Beer Production industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
The Beer Production 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, ale and stout. The beer, ale and stout is packaged in kegs for sale to pubs, bars and hotels or in cans and bottles for sale to wholesale and retail alcoholic beverage distributors.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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