U.S. Beer Industry
Classification of Brewers
Although much has changed in recent years brewing companies are still divided it what can be considered national, regional, and specialty craft brewers. The first segment includes national brewers who brew beer on a mass scale and who sell in all (or almost all) states. This group includes Anheuser-Busch, SAB-Miller, and Molson Coors Brewing Company. The next segment is regional brewers who are distinguished by their geographic scope of operation within the United States serving a multi-state area-no more than two or three states. Among the regional brewers still in existence are Pittsburgh Brewing Company, Yuengling, Latrobe Brewing Company, and High Falls Brewing Company. The third segment is specialty craft brewers, which consists of brewpubs and microbreweries that serve a single metropolitan area or perhaps a single state or region.
As far as domestic segments go, the most significant and unstoppable trend in the beer business is the continued momentum of light beer. Since the creation and marketing of the first light brands in the mid-1970s consumers have increasingly been attracted to these beers for their smooth, mild taste and lower calories.
Anheuser-Busch (A-B) is currently the largest brewer in the United States. A-B's growth in production capacity has come from internal expansion rather than from acquisitions.
South African Breweries' Miller (SAB-Miller)
South African Breweries (SAB-Miller), formerly known as Miller Brewing Company, was initially purchased by Philip Morris in the 1970s. Philip Morris in turn expanded production capacity, increased advertising spending, and initiated a brand-proliferation strategy.
Molson Coors Brewing Company
Molson Coors Brewing Company, formerly known as Adolf Coors Company, unlike other brewers emphasized engineering inventiveness and product quality over marketing and brand development up through the late 1970s.
Imports have made significant incursions into the U.S. beer market, mostly at the expense of domestic brands. Indeed, imports made a major impact on the U.S. beer market in 2007 and did so despite uncharacteristically slow volume growth that actually lagged that of the market overall. In 2007, the market share of imports was 14.0% with a volume of 29.9 million barrels.
Specialty Craft Brewers
Although growth in domestic beer segment has been relatively flat except for light beer, the domestic specialty segment has shown strong double-digit growth that should continue in the foreseeable future. This segment includes brewpubs, microbreweries, and regional special breweries.
Factors Contributing to Growth in Craft Breweries
The growth in craft breweries is generally attributed to several factors. First, changes in government policy have benefited the craft brewing industry. In 1977, the government cut excise taxes for smaller brewers. Before the cut, all brewers paid a federal tax of $9 per barrel.
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