First Research US Industry Profile

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Breweries
SIC Codes: 2082
NAICS Codes: 312120
Last Quarterly Update: 7/8/2019
Companies in this industry produce beer, ale, malt liquor, and nonalcoholic beer. Major companies include Anheuser-Busch InBev (Belgium), Asahi Breweries (Japan), Carlsberg (Denmark), China Resources (China), Heineken (the Netherlands), Molson Coors (US), and Tsingtao (China). DG Yuengling and Son is the leading US craft brewer by sales volume, according to the Brewers Association.
Worldwide, breweries produce about 2 billion hectoliters of beer annually, according to Kirin Beer University. The largest beer-producing nations include China, the US, Brazil, Germany, and Russia. Developing markets in Asia, Latin America, and Africa are being targeted for industry growth.
The US brewery industry includes about 2,800 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $32 billion. Counting brewpubs and microbreweries, the US industry includes about 6,500 establishments.
Competitive Landscape
Large breweries dominate the global beer market, but smaller craft breweries have gained market share in recent years by introducing a variety of new products that sell at higher price points. Some major beer makers have acquired popular craft brands to limit competition from the fast-growing sector. Small producers in some markets have also benefited from regulatory changes that have made it easier to self-distribute directly to retailers without having to sell through wholesalers. Breweries compete with distilleries, wineries, and other manufacturers of alcoholic and nonalcoholic beverages.
Imports, which account for 15% of the US market, are becoming increasingly competitive with domestic beers. The top five countries from which the US imports beer are Mexico, the Netherlands, Belgium, Ireland, and Germany. Exports represent about 8% of US brewery production. Mexico, Canada, Turkey, South Korea, and Thailand are the top five countries buying US beer.
The profitability of individual companies depends on marketing, distribution, and operational efficiency. Large companies have advantages in marketing and sales, economies of scale in production, and influence with distributors. Small companies can compete effectively by developing specialty products. The US industry is highly concentrated: the four largest breweries account for about 90% of industry revenue.
Competitive Advantages:
Premiumization – As overall beer sales have leveled off in the US, breweries are competing for customers who are willing to pay more for premium and craft products. Younger drinkers are a valuable demographic because they are less price-sensitive than average consumers; however, they also have less brand loyalty.
Product Innovation – Many breweries have developed new product lines in recent years to capitalize on consumers’ eagerness to try new beers. Marketing a variety of styles and unique flavors can be an effective way to keep customers interested and nimbly adapt to changing trends.
Distributor Relationships – Establishing productive relationships with local and regional beverage distributors is a necessity for breweries, and competition for their business can be intense. While the largest beer makers have significant leverage in negotiating favorable distribution contracts, many wholesalers have been diversifying their product selections as sales of major brands have slowed. Some distributors offer specialized services and promotional support for new craft brands entering the market.
Companies to Watch:
Anheuser-Busch InBev is the world’s largest brewing company, producing about 25% of all beer worldwide. The Belgian company, which owns more than 500 brands (including Budweiser, Corona, Stella Artois, and Modelo), acquired top rival SABMiller for $108 billion in 2016.
Heineken, the second-largest global beer maker by volume, operates more than 160 breweries in 70-plus countries. In addition to its namesake beer, the Dutch company’s other brands include Amstel, Strongbow Ciders, Sol, and Desperados, as well as about 250 international, regional, and specialty beers.
Molson Coors, the parent company of MillerCoors, has a portfolio of brands led by Miller Lite, Coors Light, and Molson Canadian. The company has a significant international presence. In Canada, it accounts for more than a quarter of beer sales nationwide.
China Resources manufactures Snow, the world’s top-selling beer brand by volume. The government-controlled company purchased SABMiller’s interest in Snow from AB InBev following the companies’ 2016 merger.
Products, Operations & Technology
The two primary categories of beer, ales and lagers, are distinguished by yeast types and brewing temperatures. Popular types of ale include pale and dark ... plus:
Sales & Marketing
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Finance & Regulation
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Regional & International Issues
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Human Resources
Also includes the following chapters:
Quarterly Industry Update
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Industry Indicators
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Business Challenges
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Trends and Opportunities
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Call Preparation Questions
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Financial Information
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Industry Forecast
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Industry Websites
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Glossary of Acronyms

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