Can non-BMC breweries continue to take market share above 10%?

Discussion in 'Beer Talk' started by sandiego67, Feb 11, 2013.

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  1. sandiego67

    sandiego67 Initiate (0) Feb 25, 2008 California

    Based on demographic projections of a huge rise in the Asian, Hispanic and elderly populations over the next 40 years, can non-BMC breweries continue to take market share?

    I am asking because these groups don't currently consume a lot of non-BMC beer. Will non-BMC brewers attempt to attract these growing populations?

    Will the buying power of the big brewers corner the market for the materials needed to supply a population that is expected to grow by more than 82%?

    I don't use the term "Craft" because any brewer making thousands of barrels of beer per year is using a factory.
  2. Azzy

    Azzy Initiate (0) Jul 16, 2012 Texas
    Beer Trader

    I think that the large part of the craft beer market now is between 30-45
  3. draheim

    draheim Poo-Bah (2,439) Sep 18, 2010 Washington
    Beer Trader

    What's the basis for your assertion that Asian, Hispanic and elderly people don't consume a lot of non-BMC beer?
  4. sandiego67

    sandiego67 Initiate (0) Feb 25, 2008 California

    ^ There don't seem to be any real studies but I am using my own observations from the hundreds of brewery visits and festivals attended in California which has a sizable population of both groups.

    This recent paper seems to support my assertion.

    "In other ways, though, the stereotypical craft beer drinker hasn’t changed much. By volume, 80% of craft beer was enjoyed by white (non-Hispanic) consumers, over half of them in the 21-44 year age bracket. More than 75% earned at least $50,000/year, and 43% were college-educated. Despite its continued growth, the craft beer industry faces a mounting awareness that reaching lower-income and multicultural beer drinkers may represent a challenge for further growth."

    Regarding beer drinkers over 45, I will guarantee that their populations will dwindle quickly if they continue to drink like 25 year-olds. You naturally drink less as you get older or you don't get older.
  5. yemenmocha

    yemenmocha Poo-Bah (2,482) Jun 18, 2002 Arizona

    Well, Millennials drink a lot of craft beer and they're still not in their peak earning years yet. So I think the growth will continue.
    jtdolla911 likes this.
  6. herrburgess

    herrburgess Meyvn (1,044) Nov 4, 2009 South Carolina
    Industry Beer Trader

    True. On the other hand, Millennials brew a lot of craft beer, and they have yet to start families and buy homes, etc., so maybe this will contribute to a shake-out and a leveling-off -- or even a decrease -- in market share. At least one professional craft brewer I am friends with abandoned his brewing career for these reasons....
  7. FosterJM

    FosterJM Poo-Bah (2,719) Nov 16, 2009 California
    Beer Trader

    This reminds me of my senior project for my MBA where another team dropped the bomb of Most black people dont eat Fro-Yo because they are lactose intolerant. I think that BMC would find a way to purchase a part of Corona and Asahi brands to keep the % they need.

  8. sandiego67

    sandiego67 Initiate (0) Feb 25, 2008 California

    BMC will also continue to buy up small brewers. Not all breweries being formed right now are so altruistic to the beer movement that they won't sell out.
    SammyJaxxxx likes this.
  9. OneBeertoRTA

    OneBeertoRTA Devotee (497) Jan 2, 2010 California
    Beer Trader

    5 years ago I would have agreed, but it seems the new crop is getting younger.
    ESeab likes this.
  10. OneBeertoRTA

    OneBeertoRTA Devotee (497) Jan 2, 2010 California
    Beer Trader

    In dollar volume it's very possible. A bomber can be as much as a BMC 12/18 pack on scan.

    The fragmented craft brewers simply don't have the muscle to secure shelf space in the biggest channels: grocery, Drug and National Account On premise to jump the share hurdle.
  11. fritts211

    fritts211 Aspirant (210) Feb 19, 2011 Tennessee
    Beer Trader

    I don't know for sure, but you may want to consider that a larger portion of Americans that are currently minorities are going to college now than ever before, and as such the expected income bracket is expected to rise for those that complete college. I think it is very possible that entering into social positions that have craft beer drinkers (white, black, or other) could have craft rub off on them. I have no idea how they would target a lower income group if they wanted to, though I guess it is possible.

    I lean more towards craft awareness being more closely related to income means than I do race/culture, though both certainly seem play a part.
  12. kelvarnsen

    kelvarnsen Devotee (402) Nov 30, 2011 Ontario (Canada)

    They might get 10 percent but aren't beer sales as a whole shrinking? So yes the big guys are losing market share to smaller companies but they are loosing market share to people who start drinking wine more, or hard liquor or to people cutting back on buying beer as well (either for financial or health reasons). So sure they might get to 10% of the beer market at some point, but when they do the 10% they get probably won't be as big as 10% of the market is today.
  13. SammyJaxxxx

    SammyJaxxxx Poo-Bah (2,211) Feb 23, 2012 New Jersey
    Premium Member Beer Trader

    Just basic racism
    draheim likes this.
  14. jtdolla911

    jtdolla911 Initiate (0) Nov 18, 2011 Massachusetts
    Beer Trader

    I think non-bmc consumption will continue to grow over the coming years. It seems as though (at least from my sample size in new england) the culture and community involving beer is evolving into an all encompassing environment. In so much as beer is acceptable at brunch, lunch, and dinner, with more and more restaurants, at all price points, incorporating non-bmc beer to pair with their food. More and more breweries, brewpubs, and non-bmc bars are opening and sustaining profit levels. attitudes seem to be evolving to a point of accepting and expecting non-bmc offerings. All of this is happening slowly, but surely. I think, optimistically, that the market share for all non-bmc beers to at least double within 10 years. As someone said above, millennial's are just beginning to approach full earning capacity, meaning expendable income will continue to rise and I expect these industry growth trends to increase. I think BMC will need to buy up non-bmc brewers at a faster and wider rate in order to buck this growth trend. Fringe markets like mead and cider are growing as well and I think that bodes well for the entire non-bmc sector as there are more offerings for more people, and they are beginning to see how well certain styles go with certain seasons/foods/etc. I am optimistic for the future of the non-bmc market and don't think a doubling of market share in 10 yrs is out of question. Difficult, but not impossible
  15. OneBeertoRTA

    OneBeertoRTA Devotee (497) Jan 2, 2010 California
    Beer Trader

    While you are correct in the assertion the category is declining; much like spirits and wine, the biggest growth opportunity for the large players will be abroad (think Asia-Pac). Just take a look at the forecasted 5 year CAGR, Asia and Africa is where the bigs like AB and Diageo are placing their bets.


    At the end of the day, the 10% would be significant as the beer category is suggested to remain relatively flat. However, that 10% will face more challenges with an uneducated consumer and ever-increasing supply of start up craft breweries and few front runners.
  16. draheim

    draheim Poo-Bah (2,439) Sep 18, 2010 Washington
    Beer Trader

    Don't forget ageism.
    SammyJaxxxx likes this.
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