Brewers Industry Trends

Industry Consolidation

M&As have resulted in a few large companies dominating the industry. The number of companies in the US brewery industry, excluding independents, declined 30 percent in a recent five-year period. Three companies now account for 90 percent of industry revenue.

Changing Consumption Patterns

Consumer preferences evolve along with social trends and styles. Light beers are now the biggest-selling brands (about 50 percent of sales); more women are drinking beer; and craft beers are growing faster than the overall US market. Consumers earning over $50,000 spend almost 50 percent more on beer yearly than do lower earners, and contribute to the growth of the more costly beer segments. Brewers address changing preferences by introducing brands, often with trendy names and premium prices.

Declining Employment

Brewery employment has been declining as imports rise. US brewery employment declined 18 percent in a recent five-year period, while imports increased about 30 percent. Rising imports negatively affect domestic breweries market share, production levels, and employment.

Productivity Improvements

Industry productivity has been rising in recent years. Beverage manufacturing industry productivity, as measured by output per labor hour, increased 23 percent from 1999 to 2004. Increased automation and use of more efficient equipment are major contributors to the rise.

Craft Brewers' Influence

The quality, variety, and success of products from small, independent craft brewers have influenced larger brewers to follow suit. Quality ingredients, unique flavorings, small runs, and clever branding appeal to beer-savvy and higher-income consumers. Craft breweries have developed local and regional followings, and some, like the Samuel Adams brand, have reached national distribution. Larger brewers have launched their own craft-like brands and some firms are unpublicized backers of new craft breweries.

Seasonal, Holiday Brews

Popularity is growing for seasonal and holiday brews. Seasonal products include summer ales and winter lagers; holiday products include special Oktoberfest and Christmastime brews. Some breweries create special brands for seasonal and holiday products and introduce variations yearly.