Emerging Trends for the Beer Industry in 2011

Its funny how the New Year can creep up on you – it seems like you no sooner start the year, then it is time to ring it to a close.  For consumers, the New Year is a time for change.  That's also true for the beer industry.  2010 saw some interesting changes and trends emerge in the industry.  What's in store for 2011?  While we can't predict the future, we can certainly make informed guesses based on the way things have been going.

So, what can we expect from 2011 in the world of beer and brewing?  All signs point to more of the same:

Consolidation

If there has been one overwhelming trend in the world of beer (both on the national and international scale), it has been one of consolidation.  Of course, this is really not anything new – the trend has been ongoing since the hostile takeover of Anheuser-Busch by InBev.  However, there have been many other notable acquisitions (both friendly and decidedly unfriendly). 

If you are looking at the potential scene for global beer brewers and distributors, the key phrase you should remember is "more of the same."  One of the more recent mergers in 2010 that might set the stage for things to come in 2011 was the merger between Rock Bottom and Gordon Biersch, two powerful brewing companies with significant presence all across the US.  Once hailed as a promising move, it now looks like things might head south, particularly for Rock Bottom.

Loss of Revenue for National and International Brands

Another significant trend during 2010 was the loss of revenue and market share for larger breweries (national and international).  This trend continued despite major breweries trying to find a good entry point into the booming craft beer market. Industry experts expect this trend to continue, at least during the first half of 2010. 

Factors influencing the trend might certainly include the lingering economic malaise, though this hasn't really affected the success of craft beers and microbreweries.  A more significant factor seems to be the changing allegiances of consumers – more people bought craft beers during 2010 than in previous years, by a considerable amount.

Growth and Stability for Established Small Breweries

With the loss of revenue for larger breweries, you might logically think the same trend would apply to small breweries (and you'd be forgiven for thinking so).  However, the reverse is actually true.  Interestingly, microbreweries and established small brewing companies all over the US actually experienced significant growth during 2010.  The significant success of Sam Adams on Wall Street is just one of the signs that microbrews have what it takes to grow in the New Year.

Other signs that the market for small beer companies is going to be good include the growth of microbreweries – there are now more than 450 microbreweries operating in the US alone.  A significant number of microbreweries actually grew to regional breweries recently, while very few microbreweries were forced to close their doors during 2010.

Diversity and Change for Beer Entrepreneurs

More than a few home brewers long to take their hobby to the next level.  A surprising number of them actually go for broke and establish their own brewing companies.  The number of entrepreneurs doing this per year has grown consistently, and 2011 is likely to be no different.  However, one difference might be the way that they choose to establish their companies.

Usually, translating a home brewing hobby into financial success means opening a brewing company and supplying bottled beers to stores, as well as kegs to restaurants.  However, more and more people are opening up their own brewpubs, where they sell the beer they produce in glasses, not bottles.

Other brewers are taking another tack entirely.  Rather than opening up a brewpub, they prefer to sell directly to restaurants and bars, leaving out the bottling process entirely.  While this might not be the traditional way of doing business, it seems to work quite well.  One reason is the reawakening desire of consumers to enjoy a "local watering hole" – a bar or pub that they can call their own. In these locations, regular people are far more likely to try a locally brewed beer, rather than drinking national brands.

More Options for You and Me

So, where do these trends leave regular folk like you and me?  What might we expect from 2011?  Well, one thing that you'll enjoy is access to a considerably larger selection of craft beers, particularly if you live in suburbia, where brewpubs seem to proliferate.  If you're in an outlying area, your best bet might just be to attend a few of the annual beer festivals held in your area (almost everyone has at least one festival they can attend). 

These are great places to locate new breweries, try your hand at local craft beers and make some new connections.  You never know, you might just find a new preference with a locally brewed craft beer.

Posted on January 1, 2011 and filed under The Business of Beer.