An Analysis Of The Brewpub Industry

3695 words - 15 pages

The Brewpub: An IntroductionThe brewpub is considered a segment of the craft-brewing industry. It is an industry in which many entrepreneurial opportunities exist. A brewpub is a restaurant-brewery that sells the majority of its beer on site. The beer is brewed primarily for sale in the restaurant and bar (Association of Brewers.) Most brewpubs are independently owned and are classified as small businesses. (This section will need more once unit2 work is done.)An Overview of the IndustryThe continued growth trend really speaks to the stability of craft beer in a variety of economic environments it has experienced. The quality and diversity of American beer has never been better. It's exciting to think about what tomorrow will bring.--Paul Gatza, director of the Institute for Brewing StudiesIndustry ProfileFour distinct markets--brewpubs, microbreweries, regional specialty breweries and contract brewing companies, define the craft beer industry.2002*2001*Vol. Change% ChangeContract1,148,3741,016,478131,896+ 13.0%Regional Specialty3,767,4213,666,525100,896+ 2.8%Microbrewery748,560759,654-11,094- 1.5%Brewpub656,373669,853-13,480- 2.0%Overall6,320,7286,112,510208,218+ 3.4%*# of barrels of beer produced*Association of Brewers 2002 Craft Beer industry StatisitcsBeer SalesThe Association of Brewers reports that the total growth of the craft beer industry was 3.4%. (Growth is measured by numbers of barrels of beer U.S. breweries produced in 2002.) This growth is up from 1.2% in 2001. This is the craft beer industry's 33 consecutive year of growth. Total U.S. craft beer industry annual dollar volume was $3.4 billion up from $3.3 billion in 2001.Beer DistributionThe brewing industry is organized into a so-called "three-tier" distribution system: 1) brewers and importers, 2) wholesalers, and 3) retailers. Under this system, brewers and importers generally transport their products to distribution warehouses, where they are temporarily stored and then reloaded onto distribution trucks and delivered via a routing system to individual retailers (Katz).Government Beer RegulationsThe brewing industries distribution, labeling, advertising, credit, container characteristics, alcoholic content, tax rates, and litter assessment is subject to extensive government regulations at both the federal, state and sometimes the local levels. The Bureau of Alcohol, Tobacco, and Firearms (BATF), established by the FAA Act, controls all the federal regulations involving brewing. Each state has its own set of complex laws and regulations that deals with the governing of the industry. State control agencies normally issue state beer regulations (Katz).Beer DemographicsMales dominate beer consumption, with men accounting for more than 80%. A large portion of these beer consumers are white and favor domestic light and draft beer. Only 10 percent of beer drinkers are African American. They are the biggest consumers of malt liquors, followed by ice beer. Women prefer light beer and...

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