Overall beer consumption has fallen, but craft breweries have become increasingly popular
New York, NY (PRWEB) February 06, 2015
Over the past five years, the Beer Wholesaling industry has benefited from the continued preservation of laws that prevent vertical integration of breweries and retailers. After the prohibition era ended in 1933, nearly every state enacted laws that require three distinct and separate levels within the alcoholic beverage supply chain: producer, wholesaler and retailer. As a result, beer wholesalers have a protected role, and their revenue remains relatively stable through economic cycles. As a middleman serving the Breweries industry (IBISWorld report 31212), the Beer Wholesaling industry is in the mature stage of its life cycle, with revenue anticipated to increase slightly over the five years to 2015.
According to IBISWorld Industry Analyst Nick Petrillo, “The industry has a secure role in beer distribution, but changes in upstream and downstream industries have reshaped the wholesaling landscape.” Beer production has traditionally been a highly concentrated industry, with the majority of US beer production being controlled by two companies (Anheuser-Busch InBev and MillerCoors). In the five years to 2015, however, small-scale craft breweries have become increasingly popular among consumers. Furthermore, expenditure on alcohol has steady improved. Consumers are now showing more interest in higher-margin beer products. Continued growth in disposable income will facilitate added craft beer sales, and steady growth in per capita expenditure on alcohol is expected to stimulate marginal growth in 2015.
The Beer Wholesaling industry is extremely fragmented with the top four players accounting for a small percentage of revenue. However, there is a tendency for wholesalers to control a large proportion of market share over smaller regions. “The limited size of distributors is due to licensing requirements and regulatory frameworks that vary drastically by state,” says Petrillo. Since the end of the prohibition era, states have enacted their own sets of laws for monitoring the sale and distribution of alcohol within state boundaries. This makes it either difficult or, in some cases, impossible for alcohol wholesalers to expand their distribution networks across state lines.
Increasing consumer spending and major improvements to distribution technology will drive revenue gains for the Beer Wholesaling industry over the next five years. IBISWorld projects that revenue will grow slowly during the five years to 2020. This growth will largely be facilitated by increasing disposable income, which will in turn increase consumer spending on costlier brands at higher-margin, on-premise drinking locations such as bars, brewpubs and restaurants. Meanwhile, volumes will remain stable as strong demand for regional products, or microbrews, taps into mainstream sales. Although industry profit has declined slightly over the past five years, recent declines in the price of gasoline are expected to save the industry a tremendous amount on fuel costs over the next five years.
For more information, visit IBISWorld’s Beer Wholesaling in the US industry report page.
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IBISWorld industry Report Key Topics
This industry comprises establishments that primarily purchase, store, sell and distribute beer and other fermented malt beverages made by the Breweries industry (IBISWorld report 31212). This industry does not include establishments that distribute distilled spirits and wine.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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