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Beer has been made, dating back to 10, 000 B.C., monks of the middle ages were thought to be the keepers of the
Bible and a basic form of beer. Before Louis Pasteur, only wild air born yeast was used. But Americans needed
more. Thomas Jefferson, a revolutionary thinker of America'spast thought a Beer Industry would be very influential
on our economy and its growth. New Amsterdam (New York City) is where the original public brewery was
located. During the Prohibition Era (1920) there were places to get beer but it was usually very week. Franklin D.
Roosevelt was the man who eventually sought to get this law appealed. (www.beerinsitute.com;
www.beerindustry.com; www.beerinfo.com)
Here is where today's leaders were born (Anheuser-Busch, Miller, Adolph Coors). Companies came fast, 756
companies were recorded only 2 years after this law was appealed. The beer industry went through a series of
changes up until Jimmy Carter legalized Home Brewing. (www.beerinfo.com) Microbreweries (less than 15,000
barrels) became very prosperous and positive for our economy. The market size of the beer industry is incredible.
(The wholesale volume in the beer industry is approximately $13.7 billion. The industry employs almost 40,000
people. In 1998 there were 1,698 businesses which were comprised of 39,500 employees. The average worker is
paid about $18.27 an hour. As you can see, this is a very large industry which provides many jobs to the American
workforce. National market consists of ten major competitors. The Competitors in this market are Anheuser-Busch,
Miller, Stroh, G. Heileman, Adolph Coors, Pabst, Genesee, C. Schmidt, Falstaff, and Pittsburgh.
(www.dted.state.mn.us/PDFs/beer.pdf)
A company has many issues to look at; marketing the beer, giving back to the community, and waste researches are a
few examples. Marketing is extremely costly in this industry and takes an enormous amount of investment since
many different marketing strategies are utilized today. Although many companies have come and gone over the
years, beer sales doubled. The customers for the beer industry are highly diverse. They range from being highly
educated to non-educated, and male to female. Income ranges for those who drink beer are also very diverse. The
age group of 21-24 year old people is only accountable for 8% of our population but consumes 14% of the beer
industry. Anheuser-Busch has stated "Beer Drinkers Tend to Be Young, Ethnically Diverse, and Blue Collar".
(Anheuser-Busch; Beer Industry Overview; 2001) As far as trying to expand sales of beer goes, both craft brewers
and major brewers are going against trends of moderation; consumers are drinking less in the belief that this is part
of healthy lifestyle. There's work to be done getting out information on recent studies that show moderate drinking
of beer is good for you. Despite the gradual shrinking of the population of 21 to 35-year-olds this group will expand
again beginning in the next decade. To some extent, in terms of on-premise business, independent craft brewers as
well as large brewers are competing against TV and internet activities, but not much in magazine ads. You actually
don't see too many print ads for beer within a magazine but on billboards and rotating digital advertisements.
The part of the beer industry that seems to be in its 10th year rising profits, is imported beers. Imports have used
multi million dollar slogans in the United States on TV commercials and ads. The editorial in the April 22, 2002
Wall StreetJournal points up a huge issue and that's that now that the government is involved in the tobacco
business, how long is it going to be before the government gets more involved in the alcohol business.
(www.beveragebusiness.com/art-arch/) These things allcontribute to how particular companies should set up their
marketing strategies. The 15 major beer importers include Becks, Heineken USA, Guinness, Barton, Labatt and
Gambrinus. They have formed an ad hoc importers group specifically to address the issues regarding restricting the
advertising of their beers. This would be costly to their campaign.
Another key issue facing the industry is the macro-sociological point: how will alcohol be regarded in the US in the
years to come? Will it go the way of tobacco? I hope not, and don't see that path in the beer industries future. But
this is another issue the companies must keep in mind while figuring out what marketing strategies will be in each
company's best interest. The big brewing industry has invested for volume, but there are no longer armies of coal-
miners or steel-workers coming off shift in Pittsburgh ready to drink 20 beers. People sitting at computers all day
still want a beer, but they want less volume and more 'reward'. They may also be concerned about driving and about
health. The 'moral' anti-drink lobby is also a factor in the US, but far less obvious anywhere else. The questions of
driving and health also threaten more controls on advertising, which would hit the big guys.
Anheuser-Busch has found another marketing strategy that has given them the appearance of being environmentally
friendly. Anheuser-Busch invested a good portion of money to researching waste recycling. They won the NRAP
award in California for their L.A. brewery because they recycled 98% of their waste. Anheuser-Busch has won 150
plus awards due to their extensive research in recycling. They have even won the U.S. Environmental Protection
Agencies 2002 "Waste wise large partner of the year" award.
Anheuser-Busch is dominating the beer industry because of their diversity in trying to reach to other companies in
other countries. Anheuser-Busch, the world's largest brewer, and Tsingtao Brewery Co., the largest brewer in China,
signed an agreement that will increase Anheuser-Busch's ownership in the company to 27 percent and provide
Tsingtao with financial and technical resources to help it lead change and growth in the China beer industry.
Attending the signing in New York were China State Development and Planning Commission Chairman Zeng
Peiyan and U.S. Secretary of Commerce Donald Evans. Under the agreement, Tsingtao will issue convertible bonds
to Anheuser-Busch in three installments valued at approximately US$ 182 million. As this debt converts to equity
over seven years, Anheuser-Busch's economic interest in Tsingtao will increase from its existing 4.5 percent to 9.9
percent initially, then to 20 percent and ultimately to 27 percent, all held in the form of "H" common shares listed on
the Hong Kong Stock Exchange. The Chinese government will remain the largest shareholder in Tsingtao, holding a
30.56 percent share after all bonds are converted. Anheuser-Busch will be the largest non-government shareholder.
Anheuser-Busch will receive proportional representation on Tsingtao's board of directors, board committees and
supervisory board. Anheuser-Busch will pay US$ 116.4 million at closing and an additional US$ 65.2 million within
12 months. The capital contributed by Anheuser-Busch will be used to improve Tsingtao's brewing assets, construct
new brewing facilities and make future acquisitions. (NEW YORK (October 21, 2002))
Local or microbrewers have the fewest barriers to entry. Capital requirements are small compared to that of a
national or regional brewer. Microbrewers generally operate in a small geographic area thus reducing many of the
regulations faced by national and regional brewers. Product characteristics vary among the markets. In the national
market the beer is highly standardized and heavily advertised. Prattico New England-area Vice President, Coors
Brewing Co. says "Controlling the inflation of pricing that's raising costs and lowering margins for retailers and
brewers is the top issue" Frank Anzalotti Executive Director, Massachusetts Package Store Association said "I
speak from a retailer perspective, since beer is such a major part of our gross sales," says Frank Anzalotti. "Stores
have to be able to sell beer at a profit. Right now they're killing each other with 30-packs and cubes, and those kinds
of packages that do not generate profit. We need to be able to sell more microbrews or six-packs, or smaller
packages that will generate profit, not just gross. To help with that, MassPack puts out bulletins on how to better set
up your store up to sell products ata profit." This goes to show how in recent years the base strategy is quantity and
it is not working in giving each company the numbers it wants. This is a major reason why in advertisements you
very rarely hear of them speaking of their "deals" or discounts rather then the type of beer and its benefits.
Sometimes the ad will have nothing to do with the beer itself and just try to get the consumers attention.
Usually trends you learn from the past help companies gain profit, but in the beer industry certain historical
occurancesare making the companies earn less per year. Bulk is not what the companies need to offer the consumer
because of number drops. Craft beers are there prime sellers, so they focus on publisizingthose. Advertising isn't
the only way these companies market their product which makes it more enjoyable for the 21-35 age group. Beer
companies may find the need for a strategicalchange in case of regulations. Its highly unlikely in my opinion, a
reputable source (20 year old collegestudent). An advantage of pursuing this industry is that small time businesses
are known to stand a chance against the major companies for a decent percentage of the profit. Giving back to the
community gives you better business opertunity in the near future because of positive contributions through the
companys researching, donations, advertisements with celebrities.
Works Cited

Adams Walter, James W. Brock; The Structure of American Industry; editors 10th ed; Prentice Hall 2001 Upper
Saddle River; New Jersey

Anheuser-Busch; 2001 Beer Industry Overview Report; 2001

Minnesota; Trade and Economic Development - Overview of The U.S. Beer

Editorial; New York Times; 22 April 2002

Frank Anzalotti Executive Director, Massachusetts Package Store Association

Peter Terhune; Massachusetts Beverage Business; Boston , MA

www.dted.state.mn.us/PDFs/beer.pdf (*state site)