Exploring the US Beer Market and the Challenges The Industry Faces

Globally, the beer industry is similarly consolidated, with the top 15 breweries managing about 76% of the market. But what sets the US beer market apart from others? In this article, we'll explore the characteristics of the US beer industry, from the role of distributors and retailers to the consumption trends and major challenges facing the industry. Let's dive in.

A shift towards draft beer 

Beer has long been the most popular alcoholic beverage in the U.S., with Gallup surveys indicating that 67% of people consume alcohol, and beer is their favorite choice. Even though beer has been losing ground to wine and spirits in recent years, it still has a much higher per capita consumption than wine or spirits in the US, which is probably the result of the rise of craft breweries and the growing interest in different beer flavors among consumers. As consumers become more aware of the flavor and quality of beer, draft beer has also gained in popularity, as it is considered the most delicious form of beer.

Three-tier system in the US beer ecosystem

To understand how beer gets from the brewery to your local beer pub in the neighborhood, we need to take a closer look at the three-tier system consisting of brewers, distributors and the retailers.

Breweries

The US beer industry has undergone significant changes in the past decade, with the market share among brewers shifting considerably. Two major players in the industry, Anheuser-Busch InBev (AB InBev) and Molson Coors, have lost 17% of their market share since 2011, and this is mainly attributed to the rise in popularity of craft beer. 

You may be interested in: Ancient Beer vs Modern Beer

Distributors

The second tier of the three-tier system is made up of distributors, which have exclusive contracts with breweries to distribute the beer brands. The biggest beer brands usually make agreements with just two or three distributors in a given area and sell their brands within the scope of their contract. 

Retailers

The retailers actually sell beer to consumers, ranging from hotel bars to sports bars. They are responsible for stocking and promoting the beers they sell, and thus they play a key role in the quality of the beer, shaping consumer tastes and preferences. 

You may be interested in: Beer Festivals Around The World

Problems in the beer industry

Although the US beer industry has achieved significant success, there are still major issues that require attention, especially due to the three-tier system that makes it difficult to monitor, and track the beer quality. Among these, the most prominent is the poor drinking experience, characterized by a metallic taste or a buttery sensation, and can be perceived by those who are not beer experts or cicerones. Consumers face this due to the lack of standard, and optimized perfect pour. Various factors can impact the perfect beer taste and quality, such as temperature, freshness, maintenance, foam texture, and pressure. 

Another challenge faced by the industry includes the difficulty in tracking business KPIs for. Each player in the value chain struggles to monitor the quality parameters of the beer they serve, efficiency of kegs and the performance of the staff. Without access to data, they are unable to identify trends and run their business more efficiently. 

Another problem of the draft beer industry is the issue of sustainability and profitability. Unfortunately, a lot of beer goes to waste. On average, only 77% of the beer in each keg is actually consumed, and 23% goes down the drain. This waste not only results in excessive use of  resources and carbon emissions that could have been avoided, but also lowers profits for both retailers and breweries.

Is there a solution?

Pubinno offers end-to-end solutions to the problems in the draft beer industry, using patented Artificial Intelligence, Machine Learning and Robotics technologies. Every product equipped with our cutting-edge technology contributes to the perfect pour, efficient processes and enhanced experience. The Smart Taps control the flow rate of beer, and track all the parameters of a draft beer system, and ensure the highest quality, the perfect pour, and the perfect taste, regardless of time and location. The Smart Clean offers 4x times faster line cleaning process with 400% more pressure and 85% less human touch. 

Most importantly, by enhancing keg efficiency up to 20% and ensuring a better drinking experience, Pubinno's solutions not only solve the problems of waste and low profitability, but also increase sales and potential profits by approximately 7% by protecting the beer culture across the world using disruptive technologies that enhance both the processes and the experience.