Lager than life: Product innovation and new markets are anticipated to support growth

Beer producers undertake the end-to-end process of brewing, packaging and distributing lager, ale and stout. Demand for the industry's products is typically driven by per-capita alcohol consumption, income, price and consumer preferences. Over the five years through 2019-20, industry revenue is expected to increase at a compound annual rate of 1.1%. The industry initially struggled due to the rising popularity of alternative beverages, health consciousness and heavy price discounting by supermarkets. However, during the period the industry has benefited from increased alcohol consumption per capita, most likely attributable to the older population of the United Kingdom...read more.

Industry Statistics & Market Size
Revenue
£9.1bn
Annual Growth 15-20
1.1%
Forecast Growth 20-25
Profit
Employment
19,020
Businesses
1,378

Industry Threats & Opportunities

  • Higher alcohol consumption and the growing craft beer market have boosted revenue
  • The volume and value of products sold in off-trade premises now surpasses those in on-trade
  • Alternative drinks and teetotalism among younger people are likely to continue posing a threat
  • Industry Report - Industry Products Chapter

    Beer can be broadly segmented into three major types: ale, lager and stout. Each has its own unique characteristics and can vary between different regions of Britain. Until the 1960s, most beer produced in the United Kingdom was ale or stout. However, the popularity of lager has increased dramatically since the 1970s and it now accounts for a dominant share of all beer produced in the United Kingdom.Product segmentation has become less distinct in the past few years due to the development of beers that mix the characteristics of multiple varieties. This can be achieved, for example, by brewing with a bottom-fermenting yeast at unusually high temperatures. This produces a beer that is dry, which is a characteristic of lager, but has malty flavours characteristic of ale. Ano...purchase to read more.

    Additional Insights for the Beer Production Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Beer Production Industry are

  • Market research and understanding
  • Marketing of differentiated products
  • Economies of scale
  • IBISWorld analysts also discuss how external factors such as Alcohol consumption per capita and trade alcohol prices in the Beer Production industry impact industry performance..

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    What's in this report

    What is the Beer Production Industry?

    Brewers buy barley, malt, sugar, yeast and other ingredients to process into various beer products, including lager, ale and stout. Beer is packaged in bottles, cans or kegs for sale to wholesalers, retailers, pubs and bars. The production of cider is omitted from this industry.

    Industry Products
  • Lager
  • Ale
  • Stout and porter
  • Industry Activities
  • Brewing lager, ale and stout
  • Bottling, capping and labelling beer
  • Distributing beer tors,ers and publicans
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Alcohol consumption per capita
  • trade alcohol prices
  • Real household disposable income
  • Real effective exchange rate
  • Health consciousness

  • Current Performance
  • Craft beer revolution
  • Another round
  • Bottoms up
  • Chart: Revenue Growth

  • Industry Outlook
  • Competition

    and innovation

  • Regulation and rates
  • Reviving brew
  • Table: Beer Production Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Beer Production Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Alcoholic Beverage Wholesaling
  • Supermarkets
  • Off-Licences
  • Pubs & Bars

  • Key Selling Industries
  • Beverage Crop Growing
  • Consumers
  • Hollow Glass Manufacturing
  • Malt Manufacturing

  • Products & Services
  • Lager
  • Ale
  • Stout and porter
  • Chart: Beer Production Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Off-trade
  • On-trade
  • Chart: Major Market Segmentation for the Beer Production Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks

    Profit

    Profit margins marginally expanded in the first half of the five-year period through 2018-19 as several major UK beer producers implemented cost-cutting measures to safeguard bottom lines. For instance, Molson Coors sold its malting facility at Shobnall in Burton to Malteries Soufflet in 2015, while simultaneously establishing a supply chain contract with the maltster. It also closed its Burton South Brewery, transferring and streamlining production to its North Brewery site. Meanwhile, the rising popularity of craft beer, which is typically sold at a higher price to generate above-average yield, facilitated growth in margins. However, aggressive retailer price wars and the off-trade account for a large proportion of industry sales over the past five years, which has limited growth in profitability. Additionally, since the EU referendum, the depreciation of the pound has inflated raw material prices for beer manufacturers, in turn placing pressure on margins. PurchasesWagesMarketingDepreciationUtilities

    Rent

    Other
  • Chart: Cost Structure Benchmarking – Sector vs Beer Production

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Beer Production Industry

  • Industry Globalization
    Molson Coors Brewing Company (UK) Ltd, AB InBev UK Ltd, Heineken UK Ltd, Carlsberg UK Ltd,
  • Table: Molson Coors Brewing Company (UK) Ltd - financial performance
  • Table: AB InBev UK Ltd - financial performance
  • Table: Heineken UK Ltd - financial performance
  • Table: Carlsberg UK Ltd - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Beer Production Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Beer Production Industry
    Includes:
  • Industry Revenue (2011-2025)
  • Industry Gross Product (2011-2025)
  • Establishments (2011-2025)
  • Businesses (2011-2025)
  • Employment (2011-2025)
  • Exports (2011-2025)
  • Imports (2011-2025)
  • Wages (2011-2025)
  • Wages (2011-2025)
  • Purchases (2011-2025)
  • Profit (2011-2025)
  • Depreciation (2011-2025)
  • Marketing (2011-2025)
  • Rent (2011-2025)
  • Utilities (2011-2025)
  • Other (2011-2025)
  • Taxes (2011-2025)
  • Distribution (2011-2025)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Centrifuge
  • Equipment that rotates at high speed and separates substances of different densities by centrifugal force.
  • Hectolitre
  • A unit of measurement in brewing which equates one unit to 100 litres of beer.
  • High-Gravity Brewing
  • A brewing technique that begins with the production of a wort that has a higher sugar concentration, allowing for higher strength beer to be produced.
  • Pilsner
  • A type of pale lager first produced in the Czech Republic.
  • Wet-Led Pub
  • One that derives most of its revenue from beer sales. Wet-led pubs are often tied to pubcos or brewers.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Beer Production market research report provides the latest industry statistics and industry trends, allowing you to identify the products and customers driving revenue growth and profitability. The industry report identifies the leading companies and offers strategic industry analysis of the key factors influencing the market.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Beer Production:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Beer Production market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Beer Production, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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