Europe is a major player in the beer market. It includes large beer producing countries like the Netherlands, France, and Germany, which are the source of well-known beers such as Heineken, for example. It is also one of the places where it is most consumed. However, in recent years, many factors have contributed to a decline in consumption in Europe. This sector now finds itself in difficulty.
The giant Carlsberg plans to close 29 European breweries within the next ten years. The brewers are being forced to adapt, and restructure. Besides the political decisions, and economic recession, there is an extension of the image of beer, which requires constant innovation. We notice an attraction for "special" beer that is flavored, and is meant to attract a different audience, including the youth and women.
In this context of crisis, we will try to understand what is the best way to stand out in this market and by what means it is possible to circumvent it? To do this, we will conduct an external analysis of the market, and then we will consider the strategic choices of groups. The European beer market is facing two major challenges in 2013. Companies will be faced with a rather low European market, and customers will be increasingly less impressed by the beer.
Consumption has been declining in Europe since 2008, and this trend should be confirmed by 2013, both in volume (-2.3%) in liters (-5%). Indeed, there was a slow growth of the European beer market in 2008 (+0.4%), unlike the global market, which is in better shape. The countries considered best customers for Heineken are expected to reduce their consumption of beer in the coming years, by 0.6% and 3.9% respectively between 2008 and 2013, which threatens the evolution of the turnover of the Dutch company, as well as of brewers in general.
The beer market is also prone suffering from the changing tastes of consumers with respect to alcohol consumption. Beer can be substituted for wine and spirits or other spirits, sweetened with mixtures, which appeal strongly to young people. It is found that the image of beer is becoming popular. This variable is taken into account in the communication and the development of products that are marketed by brewers to retain or attract customers.
Tags: European beer market, Netherlands, France, and Germany, Carlsberg, economic recession, strategic choices, Dutch company,
[...] The group intends to stand out in this field by selling increasingly sophisticated machines and selling them to households, as the consumption of beer at home accounts for 70% of the market. Conclusion It is clear that the beer market has been experiencing a difficult period in recent years. In the face of the impressive selection of alcoholic beverages which are become increasingly attractive due to their design and advertising, beer tends to reflect an outdated image. In addition, the regulatory environment causing people to drink less, will not work in its favor. [...]
[...] The beer market is also prone suffering from the changing tastes of consumers with respect to alcohol consumption. Beer can be substituted for wine and spirits or other spirits, sweetened with mixtures, which appeal strongly to young people. It is found that the image of beer is becoming popular. This variable is taken into account in the communication and the development of products that are marketed by brewers to retain or attract customers. Similarly, consumers are not interested in beer because of its reputation as a drink that makes you fat, while wine has a more positive image for health. [...]
[...] Solutions proposed by Brewers As the sale of spirits increase, changing trends and the decline of the image of beer in some societies have brought about the need for an unprecedented restructuring, which is taking place. The beer market which was hitherto fragmented is seeing the emergence of a minority of very influential brewers. The giant SAB Miller highlighted the need to regroup and take action. Since 2008, mergers have proliferated. The brewers are forced to rethink their strategies and face a more selective application by the consumer. [...]
[...] But the market leaders have opted for vertical integration, which significantly reduces the power of suppliers Threat of potential entrants: Entry into the European beer market is dependent on forecasts of market growth, as well as on the size of existing businesses. Yet, currently, half the market share is held by the three leaders and the forecasts of market indicate very low growth for years to come, suggesting that the threat of new entrants is minimal Threat of substitutes: The beer market is quite diverse. [...]
[...] This may also depend on traditions across geographic regions Degree of competition: the three leaders (Heineken, Carlsberg and InBev) share half of the European market and achieve economies of scale, but they offer many brands and are placed on different segments. Thus the competition is pretty strong, but it is possible for a company to differentiate itself, as there are many types of beer (with or without alcohol, blonde, brown, amber, etc.). Competitive Analysis Today there are fewer brewers than there were a few years ago, but those surviving in this market appear to be very influential. [...]
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