Beer is an alcoholic beverage obtained by fermentation. It is made from water, malt (sprouted grain, usually barley, sometimes wheat or rye) and hops. Beer may either be produced industrially or manually in a brewery, but can be manufactured by an individual. It can be grouped by the structure or the taste, which may be sweet, bitter acid, or "absurd".
However, the beer market consists of sweet and bitter beer (ales, stouts & bitters), beer with little or no alcohol, "premium lager, specialty beers (beers produced for special occasions such as Christmas beer, Mars beer and others) and finally, standard beers.
The stakeholder analysis allows us to distinguish the actors who play a role in the area of study. Thus, we can highlight those who benefit from it, those who play a decisive role, and those who are marginally involved in its development.
Internal stakeholders are those involved directly in influencing the European beer industry. This is the core component sector. The stakeholders are the intermediaries involved, and the means used for marketing the product. Finally, external stakeholders are the actors to be considered as they may be binding (e.g. government legislation, consumer expectations etc.)
The beer market is currently in the third phase of development: The phase of maturity.
Indeed, the market for the beer industry is almost in a phase of decline, because of different points:
The Growth rates are near zero
The Growth potential is low
Multiple product lines (lager, dark, alcohol-free)
Distribution of Market Shares: concentrated in 3 main groups
The Abell scheme describes the beer market under different parameters: These include the parameter function beer, technological, and customer group among others.
This allows companies to target different types of consumer and consumption, and to offer products which are in line with their expectations. For example, a single consumer whose "function" is to discover other flavors through a traditional technology will be more tempted by a beer such as the Trappist Chimay beer.
We can identify four groups in the market for the beer industry. Each of them follows a different strategy. The leader of the group has the opportunity to market on the strength of the popularity and the massive sale of their products, using the strategy of being the leader in cost, which means that they affect the market price. The businesses of this group represent more than half the market share and, practice a price within the market average.
Craft businesses have a niche strategy. Of small sizes, they produce unique beers which allow them to claim a high price that will not disturb the consumer.
It is interesting to notice that undertakings selling "cheap beer and specialized companies' are medium-sized companies in the beer market but adopt two different strategies. Both are in competition with the leading groups, "cheap beers" are competing for a very low price, while the specialized companies' play on the diversity and originality of their products and therefore adopt a higher price than the market average, which also competes with the small craft enterprises.
[...] Heineken The Heineken Company was founded in 1864, and is now the third largest brewer in the world with over 200 proposals of beers under its belt. The most popular ones are Heineken, Desperados and Pelforth. Its director, JF Von Boxmeer, displayed a net increase of thus reaching 1.05 billion Euros in 2009, which shows the continuity of the company at this time of crisis. Moreover, Europe is the region that is the most attractive for this company where it makes 70% of its profits. [...]
[...] Its flagship product is the beer of the same name Carlsberg, and its brand portfolio consists of different beers. The volume of beer sales in this geographic area was 46.8 hectoliters in 2008, thus generating a net profit of around 483 million Euros, confirming its position as a challenger in this market. Its activities are as follows: 1. Beers 2. Soft drinks 3. Energy drinks 4. Bottled water The strength of this company is its strong financial system that is flourishing, and the company does not achieve economies of scale and is very small when compared to major competitors. [...]
[...] Interpretation of the five forces of Porter It appears clearly that the barriers to entry in the beer market are rather high, especially in the case of a brewing industry. To begin with, this market requires a strong need for capital and purchase of industrial equipment and many specific types of equipment. In addition, a key to success in this industry is to achieve economies of scale which seems to be difficult to achieve, given the quantities to be provided. [...]
[...] Strategic groups of the beer industry: We can identify four groups in the market for the beer industry. Each of them follows a different strategy. The leader of the group has the opportunity to market on the strength of the popularity and the massive sale of their products, using the strategy of being the leader in cost, which means that they affect the market price. The businesses of this group represent more than half the market share and, practice a price within the market average. [...]
[...] Economic Economic crisis of 2008: Lower economies of scale Declining purchasing power Layoffs and rising unemployment The continued rise in the cost of raw materials (such as that of barley prices since 2006 due to inclement weather). The contracts are subject to seasonality (higher consumption in summer than in winter The 3 main European players in the order of leadership, Heineken, Carlsberg, and AB InBev, hold 52% of the market shares. Global Leadership has been retained by AB InBev Factory relocation Socio-cultural Awareness of the risks related to excessive consumption of alcohol (via TV spots, road safety . [...]
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