Brewing Industry Beer Term Paper

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Brewing Industry

The beer brewing industry is an important contributor to many economies of the world including that of the U.S.A. In this paper we shall give an overview of U.S. beer industry. It will contain a brief summary of the current trends in the industry and major players, the effect of the brewing industry on the U.S. economy, external environment facing the beer industry, and the opportunities and the challenges facing the industry.

Current Trends & Major Players

beer industry is characterized by flat consumption trends and dominance by three brewers, namely Anheuser-Busch (the makers of Budweiser), Miller Brewing, and Adolph Coors.

percent of the U.S. market share is held by Anheuser-Busch (45%), Miller Brewing (23%), and Adolph Coors (10%).

The above named companies are also the top three brewing companies in the world having overtaken German companies since long.

Some major brewing companies that have been closed down or been absorbed by others since 1980, include Jos Schlitz Brewing Co, G. Heileman Brewing Co, Olympia Brewing Co., Falstaff Brewing Co and C. Schmidt & Sons.

As a mature product category, beer is not subject to sharp and rapid sales fluctuations that occur in newer sectors of the national economy.

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Individual beer consumption trends have shown a decline since the early 1980's, a result of public policies and private sector initiatives encouraging moderation and personal responsibility.

Beer sales declined in the first half of the 1990's, primarily due to the 100% increase in the federal excise tax for beer in 1991.

The industry saw a spurt in growth during the last 5 years mainly due to an increase in the population of adults over the age of 21 in the U.S.

Shipments from brewers and importers to their beer wholesalers reaches record levels of 197.6 million barrels in 2000

These levels are likely to hold during the next few years due to economic slowdown and after effects of 9/11

Effect on Economy

According to one estimate the total economic impact of the beer industry on the U.S. economy is of the order of $187 billion dollars.

Beer represents 88% of volume of all licensed beverages sold in the United States.

A summary of the impact on the U.S. economy is depicted in the table that follows:

Direct Impact

Full Impact

Jobs

Wages

Taxes (State, Federal & Local)

Value Added

Source: The Beer Institute Research

Opportunities….....

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