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Big brewers like Anheuser-Busch continue to dominate beer sales. Weve that, “Words to Drink By” and why UK pubs are in trouble.
Brits Spending Less Time And Money In Pubs
Responding to the cost of living crisis, the British public is cutting down on its spending in pubs, according to a recent survey from Deloitte. The survey which was shared in the Financial Times, asked 3,200 UK consumers about their leisure spending and found that between Q4 2023 and Q1 2024, the desire for “eating out” and “drinking in pubs and bars” had declined by about 6% among Brits.
“The cost of living crisis and the fact that things remain more expensive than they were a year or two years ago are impacting consumer behaviors].” Deloitte Consumer Insight manager Céline Fenech said…
“We are seeing signs of consumers easing their discretionary spending restrictions, but we are not seeing a splurge yet in leisure spending,” Fenech suggested. “There is no doubt that people are still trading off between spending on food at home and on going out.”
Words to Drink By
“”Being an entrepreneur is like eating glass and staring into the abyss of death.”– Elon Musk, South African businessman and Tesla investor
(Photo by James Kern / Unsplash)
More Reasons Why Big Brewers Dominate US Beer Sales
Even at its peak in 2019, craft brewers produced less than 20% of the beer is the US. Over 80% of US beer sales remain the domain of big brewers like Anheuser-Busch, Constellation Brands (who own the Mexican import market) and Molson Coors.
And there are several reasons why big brewers continue to dominate the beer biz…
Economies of Scale
Big brewers benefit from economies of scale, they can produce beer at a lower cost per unit due to large-scale production. This allows them to price their products competitively and maintain higher profit margins. Anheuser-Busch even controls its own hop production at vast farms in the Pacific Northwest. Craft brewers will never be able to compete with this kind of scale.
Extensive Distribution Networks
Large beer companies have well-established distribution networks that allow them to reach a wide audience efficiently. They have strong relationships with distributors and retailers, ensuring their products are available in numerous locations, from supermarkets to bars and restaurants. Over the years, craft brewers have attempted to build their own distribution collectives, but with craft beer sales slowing, many of those operations have folded.
Marketing Power
Big brewers have substantial budgets for marketing and advertising, allowing them to create widespread brand recognition. They invest in high-profile advertising campaigns with big-name celebrities , sports sponsorships of major events, product placement and other promotions that keep their brands top of mind for consumers.
Brand Loyalty
Long before the emergence of craft beer, big brewers owned US sales. And over the years, they have maintained strong brand identities and relatively loyal customer bases. There is the “first mover effect,” consumers often stick with familiar brands they trust, which benefits these established brewers.
Regulatory and Market Barriers
The regulatory environment and market structure in the US can create barriers to entry for smaller brewers. Large companies can navigate these barriers more easily due to their resources, experience and the lobbyists they can afford to employ. Additionally, big brewers sometimes engage in practices like exclusive agreements with distributors or retailers, which can limit shelf space and market opportunities for smaller craft brewers.
Consistency and Quality Control
Large brewers have the capability to ensure consistent quality across vast quantities of beer. Big brewers like Anheuser-Busch or Molson Coors excel when it comes to reliable brewing. They’re on automatic and that kind of efficiency on such a large scale is hard to beat.
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