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The process of beer production is normally known as brewing and the building that is used for it with the company that makes beer or produces alcoholic drinks are called a brewery. The beer might also be made by the small producers at home.
Brewing of beer has experienced fast change bringing in good returns to the producers/brewers as a step forward in the economic society. The beer production has emerged predominantly due to the rapid changes in the brands and improved qualities. This improvement has come in order to highlight the ability of the customer needs’ satisfaction. The production’s improvement was ignited by the drop down in the consumption of beer. Beer is mostly flavored with the hops, which integrate bitterness and act as a natural preservative. The beer producing firms have been able to use the scarce economic resources to properly sell this drink. Over 70% of the beer industry profits are generated by the four biggest productions, namely, Anheuser-Busch InBev, SABMiller, Heineken and Carlsberg.
The beer industry is termed to be the global one, as it focuses on the employment of the large amount of people in the world. Moreover, the beer industry brings the broad changes in the society, primarily, because it promotes the social interactions and maximum comfort to the people of different races. The employment’s level has grown drastically as the most industries’ target is to offer the very different flavors in order to raise the high income rates. Of course, it can take the industries into the higher heights. Profit is the major dream and hence the better production.
To boost the beer market, the U.S. government has passed an act in 1978 according to which the home brewers became exempted from the taxation. The growth was recorded in U.S because many industries have joined in the beer production by making it a popular America’s culture drink. Equilibrium Price is the point at which the demand and supply intersect. The set price which allows the consumers to purchase beer and the producer’s willingness to make the product and services available to the people are the most significant aspects of this business. The increase in the number of the beer consumers was also a result of the many advertisements done through the magazines and internet websites. As a way of marketing and promoting of their products the most brewers have invested much on advertisements.
It is reported that there is an increase in beer consumption as the number of the under-age consumers have joined in the product’s demand. The global beer consumption rates are expected to rise up by 2.5%. Every year the increase in the consumption continues to shoot up. Many consumers are using beer as an alcohol of their choice when they see the introduction of beer with the bubbling flavors and many other brands that are appealing to the target markets.
China is one of the countries that have recorded a higher growth in premium in 2010 while undergoing the inflationary pressure in its economy. The other countries in Africa like Angola, Nigeria, Tanzania, Ghana, Uganda and the Democratic Republic of Congo made a growth of 8% jointly in both: cheap beers and the premium ones. Peru rose up in the consumption leading to growth of the same in Latin America. The focus globally is forecast to be around 2.5% increase, both China and Africa recording a 5% increase while 3% increase is expected from Latin America.
The drop down in the employment has really affected the rate of the beer consumption in the developed countries that occurred between the year 2010 and 2011, some of the consumers were unable to afford a bottle of beer. The recovery of the economy at a slower pace and the high prices has charged for fuel. Western, U.S and Eastern Europe have experienced a decline in the beer consumption. It must be emphasized that the slow resumption in the economic recovery has also played a vital role.
Analysts have predicted a continuation to the growth of consumption by the year 2015 at an annual 5% rate within the new markets. China is predicted to record a rate of up to 40% while more growth of the consumption is expected to be recorded in Brazil, Ukraine, Peru, India, Nigeria and Vietnam.
The U.S Beer Industry
Beer consumption is like good news in America as it is the country’s most popular alcohol. Pabst, Millercoors and Anheuser-Busch are the well known beer brewing companies. In 2010 the number of the beer brewers in the U.S. was around 1,759, including the small and giant brewers.
The macro brewers have decided to invest in the smaller brewers known as the microbrewers because of the success they have gained in the beers produced by them. Mostly consumed in the U.S beer, is still produced and sold by the larger international and national brewers. Among the top of the 50 brewing companies in U.S., there are a total of 36 microbrewers among them. The success of the smaller brewers has been brought by the traditions, ingredients and local sources of hops. The oligopoly’s market is the one which is common in the U.S.
China is ranked to be the highest beer consumption nation. The U.S is second to China and is ranked 16th in the world per capita consumption. A total of 196 million beer barrels were reported in U.S in 2009 and the consumption rate was at 20 gallons yearly. There is more mature beer’s market in the U.S hence the high competition rate.
The beer different brands’ production with the new tastes and flavors has lifted the U.S consumption trend leading it to increase in the product’s demand. The emerging of the many brewing industries has also led to the decline of the monopoly by the bigger firms.
The beer consumption is one of the America’s large sectors of a daily income. Many beer producing firms have merged together in order to survive the stiff competition they are facing from the smaller groups. The companies are also merging hoping to benefit and share the profit gained. The mergers can give the acquiring company a privilege and good opportunity to expand in the market share. Furthermore, they enable industries to setup a strong foundation in the market by strengthening their positions. Many consumers opt for the beer consumption as they believe it is safer as compared to the other drinks which are not packaged as safely as beer.
The merger between SABMiller and Molson Coors resulted to the birth of Miller Coors that was done in 2008. MillerCoors is touted as a big company with its brands Coors and Coors light and Keystone light have been in the market for over 10 years now. By combining the operation of the two companies, the venture has raised the profit margin and motivation.
Whereas China is known to be ahead of all the nations in the beer consumption we can not also rule out America as it is known as one of the traditional beer consuming countries.
Big companies end up buying smaller competing companies in order to dominate the market thereby creating monopoly in the market. It leads to elimination of the competition in the market. When the trends of the consumption are flat, the burdens in a regulation and the high levels of taxation, the beer industry records a decline in sales.
The demand of beer in the American market is determined by the supply and request law where the higher the price is, the lower the quantity; and where the lower the price is, the higher the quantity. The competition emanating from beers with the new flavors raises the supply and demand of beer. As the analysts report a growth rise in a few years time, the many industries are also joining the beer brewing market with the new brands that are recognized by the young adults who are the main beet consumers.
Finally, we can say that beer is giving the other industries which produce the non-alcoholic drinks a competition and a run for their money. In African countries such as Nigeria, Democratic Republic of Congo and Uganda beer is also reporting the big sales that are contributing to the economy of the nations. It ensures predominantly that the industries employ manpower for production. Beer is the highest selling alcoholic beverage in the market today.