Wednesday, November 10, 2010

Global beer growth NOT in US, Europe

When asked what he made of the 'craft' beer resurgence in America, Graham Mackay, CEO of SAB/Miller, responded that its demise was inevitable. That was 2007. 'Craft' beer's growth that year was 11%.

During the first six months of this year, volume growth for 'craft' beer was 9% (as reported by the Brewers Association). What of SAB/Miller and its big-brewery-corporate brethren? Through the first six months, overall U.S. beer sales by volume had decreased 2.7%.

A global snapshot shows similar trends in other traditional beer markets. According to the beverage research company Canadean, the compound annual volume growth rate (CAGR) of

the East European market is only expected to grow by 1.5%, whilst beer consumption in North America is forecast to deliver a CAGR of just 0.5% [which implies a turnaround from the losses of the first half of the year] and Western Europe is expected to register a marginal decline.

8 November 2010

Beer sales are up 3% in South America; in Africa, up 5%. But then, there's Asia.
The Asian beer market <...> is forecast to account for 38% of total beer consumption by 2015. <...> In 2015 China alone will account for over a quarter of all beer consumption worldwide. The Chinese beer market is forecast to reach 573 mhls [488.29 million US barrels] by the end of the forecast period, over twice the size of the USA, the second largest beer market in the world.

To rephrase, as does the headline from the MarketWire report: By 2015, 1 in every 4 beers will be consumed in China.

In an interesting Tweet,'s Julia Herz posted this observation from the annual Beer Marketer Insights seminar:
Craft Beer is further advanced now on conscience [minds in the marketplace, i.e., consumers] than large suppliers recognize.

Combining the large brewing corporations' continued ignorance of taste trends and their refocused attention eastward: will the so-called 'craft' brewing industry have a less fettered opportunity to grow here? And, if so, how will that industry behave as it becomes larger?

  • The Brewers Association defines a 'craft' brewery as using 'traditional ingredients', being at least 75% 'independently' owned, and as producing fewer than 2 million barrels of beer per year. A US barrel is the equivalent of 13.7 cases (24 12-ounce bottles) of beer.
  • I was tipped to this story by the Twitter feed of Brunehaut Beer.
  • World beer production and consumption data for 2009: here.


  1. Another interesting question, Tom: How will craft beer fare in the "rest of the world," where the big companies are obviously setting their sights?

  2. Tough question, Joe, and, as such, no easy answer. For small, 'craft' breweries in Asia and other underserved markets, MAYBE the American model (and the UK and elsewhere) could prove to be viable. Small, flavor-forward, and locally-supported breweries could appear and thrive despite (and because of) the big boys' consolidation of production and diminution of flavor. Unlike 30 years ago, however, the conglomerates are aware of the potential threat from the upstarts.


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