Beer: Consolidation breeds consolidation
The globalization and oligopolization of beer keeps ramping up. A recent article in BeverageWorld ("Global Beer", 2/15/2004) lays out the overview. As the author puts it,
Facing low prospects for volume growth in mature, developed markets and increased competition, brewers continue to seek growth through acquisitions of other brewers or by aggressive participation in developing markets.
Among the 2003 developments noted in the article are:
The result, according to the article is that the "top 10 brewers worldwide now account for more than half of the entire world's beer, which is an industry first."
The fastest growth in the beer market is in China, Russia, Thailand, and Vietnam. Consumption in North America and Western Europe has leveled off. Activity in China has been particularly big, with Anheuser-Busch, SABMiller, Interbrew, and Heineken all making major investments and joint ventures. On the US front, the article points out, the biggest new area of growth is in low-carb beers.
The article foresees more consolidation, and we agree. Mergers and acquisitions create panic in the industry; will your company miss out on the dance by sitting on the sidelines. The rush to acquire snowballs. In this way, consolidation breeds consolidation.
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