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Craft Brewers

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Industry Analysis
Description of the Industry
Since 2010 United States Craft Brewers have been on a steady market share growth. The past five years have transformed the Craft Beer Production industry into one of the fastest growing and most popular alcoholic beverage segments in the United States. Craft brewers have gained over 11% volume shares of the $78 billion beer industry in 2014, producing over 22.2 million barrels valued at $19.6 billion. The last year has seen an increase in breweries with 615 new breweries, while 46 breweries closed, bring the total of craft breweries to 3,464.
While most states have seen a steady increase in the number of breweries two states saw declines, North Dakota and Vermont. Vermont saw declines because …show more content…
The reason craft brewers have been able to grow steadily over the past 5 years, is greatly attributed to the wholesalers/distributors due to the regulations prohibiting the sale of beer directly to retailers and consumers. This has allowed the wholesalers/distributors to gain quite a bit of bargaining power and always them to sway the market shares through their marketing, support and promotions.
The next largest “buyer” of craft beer are the retailers and restaurants. The main driver for retailers is to carry products that increase customers while balancing profit margins. As a result, retailers are looking to stock their shelves or bars with the beer products that are selling with a recent focus on more sub-premium brands due to the recent economic situation, as well as supporting their growth of craft beers which have been outgrowing the industry and offer higher average selling prices as well as higher …show more content…
However, with craft brewing comes a demand for a consentient taste which requires a consentient raw material. With the ever increasing demand for a flavorful beverage comes in increase in the supplier’s bargaining power.
Rivalry amongst Sellers—Medium/Increasing
Since 2010 U.S. beer revenue has plateaued suggesting that the industry has reached maturity. Product life cycle defined by high price competition and low profits due to strong competition is believed to be the leading cause of the plateau. This plateau along with the competition between sellers on quality, brand, and packaging has led to the industry consolidating to four main brewers: AB Inbev, Carlsberg, Heineken, and MillerCoors. With this consolidation and the resulting stronghold over the market, competition is increasing within the Beer Industry for distribution, raw material access, and customer loyalty.
However, the craft brewing sector continues to grow and gain shares from the bigger brewers largely contributed to the strong support retailers have provided relatively higher margins as well as double digit growth into

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