Friday, September 30, 2016

Member in the News: Michael McCullough

Craft beer brings diversification as mergers gulp down the market

The state of the industry is one of both rapid growth and consolidation
The global beer landscape faced an announcement Wednesday that would forever change the industry: the merger of Anheuser-Busch InBev and SABMiller, the world’s two leading beer producers, received final approval from both companies’ shareholders. With this deal now officially moving forward, the combined company will sell about a third of the beer in the world.

But while consolidation is happening at the top, there is an explosion of small and independent craft breweries, which reached a record number at the end of last year. Major manufacturers may be merging and acquiring high-performing brands, but the U.S. beer industry is more diversified than ever.

Craft beer continues its climb
Craft beer sales and the number of breweries making it have soared over the past decade. In 2015, craft brewers increased volume by 13% and retail dollar value by 16%, according to data from the Brewers Association, a trade association representing craft brewers. Consumers have embraced a more localized and diversified breed of brews that has permanently disrupted the U.S. beer landscape.

At the end of the first half of 2016, the U.S. had 4,656 small and independent breweries in operation, 917 more than at the same time last year, according to Bob Pease, CEO of the Brewers Association. But it’s uncertain whether that high level of growth is sustainable long term.

“Breweries are still opening at a pretty tremendous rate, but it's clearly getting tougher in the marketplace,” Pease told Food Dive. “Shelf space is getting harder to come by, tap handles are getting harder to come by. It's emblematic of the maturation of an industry.”

“There's going be a point where the growth in terms of number of breweries is going to have to slow down,” Michael McCullough, beer economics researcher and associate professor at California Polytechnic State University told Food Dive. “But I don't think that it's going to really drop off or we're going to see a drastic fall in the number of breweries.”

Even if the number of craft breweries slows, craft beer isn’t going anywhere. Craft is now a permanent fixture in global beer production, if only because that’s what consumers demand.

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*McCullough was contacted for this story as a result of a press released distributed by AAEA. If you have research you would like to be considered as part of the AAEA Communicating Out Strategy, please contact Jay Saunders, AAEA Communications Manager, at*

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