Chapter 1

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.

National Brewers

The U.S. brewing industry is dominated by three firms—Anheuser-Busch, SAB-Miller, and Molson Coors Brewing Company—who together account for about 79% of beer shipments in 2007—Anheuser-Busch (49%), South African Breweries’ Miller (SAB-Miller) (18%), and Molson Coors Brewing Company (11%). The large national brewers generally offer a homogeneous selection of beers designed for mass appeal. These beers, principally light-bodied lagers, are brewed using low cost mass-production techniques and low cost adjuncts, such as rice and corn, and relatively fewer hops. National brewers are those with annual shipments more than 15 million barrels (31gal/barrel).

Anheuser-Busch

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.

Regional Brewers

Regional brewers are sometimes distinguished by their geographic scope of operation. Regional brewers are those with annual shipments fewer than 15 million barrels, but greater than 2,000,000 barrels. Most regional brewers are privately held by single plant brewing companies.

Specialty Craft Brewers

Specialty craft brewers consist of brewpubs, microbrewers, and regional craft brewers that are small, independent brewers whose predominant product is brewed with only traditional brewing processes and ingredients. Craft beers are full-flavored beers brewed with quality hops, malted barley, yeast and water without adjuncts such as rice, corn or stabilizers or water dilution used to lighten beer for mass-production and consumption. Among the well-known specialty craft brewers are the Anchor Steam Brewing Company, the Boston Beer Company, the Sierra Nevada Brewing Company, and the New Belgium Brewing Company.

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.

Click on the following topics for more information on U.S. beer industry.