Cheers - "They who drink beer will think beer" - Washington Irving

Just a month ago I was in a sports bar watching this high profile match between Atletico Madrid and Barcelona in Madrid, Spain. The bar tender was very friendly and he opened up the tap, couple of hours even before the match could start. You see, soccer and beer are two things that go hand in hand. Then, be it a Champions League night or a La Liga or a Serie A – bars are always full and the kegs keep getting empty. I was with random people chanting and trying to match them with Spanish songs. I couldn’t stop noticing how fast the bar tenders were re-fuelling the kegs. So I went upto the bar tender looking for Tapas and asking him about his beer business in general. While I started with his beer business in general, during the conversation, I was made aware about the value of beer industry in Europe, and as I held my pint, I realized that it had tremendous potential post 2010 particularly in the emerging market, as companies look to divest to re-capture their debts while acquiring and partnering with firms.

Everywhere in Europe I couldn’t fail noticing the top brands like Ab-Inbev, Heineken, SAB Miller, Carlsberg, Asahi, Molson Coors, Diageo, and couple of Indian brands. I just was curious to understand the market, and was quiet astonished that the global beer market was valued approximately at around USD 510 Billion in 2008-2009. Europe accounted for 49.1% of the global beer market, followed by APAC – 22.9%, South and Central America – 8.6%, and MEA – 1.8%. Consolidation in the beer industry has changed the leading company, with AB-InBev becoming the market leader based on sales in 2008, followed by Heineken, pushing SAB Miller down to the third rank. A recent report by market business insights, show that the largest alcohol category will continue to be beer, cider and flavoured alcoholic beverages category, which is projected to reach USD 393 Billion in Europe & US by end of 2010 resulting in an increase of 5% from 2006 to 2010.

Image Source: Stealingshare.com

However, like any industry, the beer industry has its own concerns and issues. Beer is losing market share to wine and spirits, in part due to perceived health benefits from wine and high levels of innovation and premiumization in the spirits market. Growth in beer consumption volumes will be driven primarily by the increase in rising disposable income and beer-consuming population in emerging markets. The alcoholic drinks industry is being increasingly scrutinized by governments who are demanding stricter controls on advertising, and there are also concerns regarding the rising level of obesity in Europe and US. Also rising raw material prices have led global beer companies to increase the price of beer, especially in Europe. The beer brewing process is a very precise and therefore heavily controlled process where the exact amount of ingredients and heat as well as the right timing are crucial to its success. As enormous amounts of waste water and vast energy consumption are main concerns for a brewery, the following seven focus areas provide excellent examples of sustainable process implementation – energy usage, water conservation, recycling, heat recovery, CO2 recovery, transportation, and emissions reduction. A differentiated value proposition and meeting the triple bottom line  is something the industry players must look to build on to. Today, there is a greater demand towards ethical products – go green and recyclable are the mantra’s that these companies need to use in their supply chain.

And while I was thinking green, and I was awakened by the roaring Atletico fans as the ball saw the back of the net. Some of the regulars there got free beers, as their bar tender friend was a die-hard Atletico fan. Now I know why this industry is still booming…and as the old saying goes..."Beer needs Soccer and Soccer needs Beer...that's how life goes...". Cheers to that!

Image Source: images.allposters.com