Beer Wholesaling
Business for Sale Industry Economics
$82,940,000,000
Revenue
4.01%
Projected CAGR
2002 - 2021
Historical
2021 - 2027
Projection
1.54%
CAGR
$4,147,000,000
Profit
Quick Scroll
Summary
Revenue growth for the Beer Wholesaling industry has been hindered by shifting alcohol consumption trends among consumers, particularly millennials.
Americans have been consuming less beer and opting for alternative alcoholic beverages.
However, the industry has continued to benefit from laws that prevent the vertical integration of breweries and retailers.
After the Prohibition era, nearly every state enacted a three-tier distribution system, requiring three distinct levels within the alcoholic beverage supply chain, including producer, distributor and retailer.
As a result, beer wholesalers have a protected role, purchasing beer from producers before storing and transporting it to downstream retailers.
Research estimates that industry revenue has grown at an annualized rate of 2.3% to $82.9 billion over the five years to 2021.
Since 2020, the COVID-19 (coronavirus) pandemic has resulted in rising demand for industry operators, with revenue projected to rise 1.0% in 2021 alone.
Performance
The Beer Wholesaling industry comprises operators that purchase, store, sell and distribute beer and other fermented malt beverages made by the Breweries industry to consumer-facing outlets, such as retail businesses and on-premise food service establishments.
This industry does not include businesses engaged in the merchant wholesale distribution of distilled spirits and wine.
Despite having to contend with a long-term decline in the volume of beer consumed, the industry has performed moderately well over most of the five years to 2021 due to increased consumer spending, the sustained popularity of craft beer and a steady decline in the excise tax on beer.
Research estimates that industry revenue has increased an annualized 2.3% to $82.9 billion over the five years to 2021, including an increase of 1.0% in 2021 alone due to the COVID-19 (coronavirus) pandemic.
Outlook
Revenue for the Beer Wholesaling industry is expected to continue to grow over the five years to 2026.
Major brewers are expected to settle into new, streamlined product distribution agreements that will likely supply a greater variety of brands to wider markets.
Beer wholesalers, nevertheless, will likely continue to encounter growing competition, particularly from industries that specialize in wine and other alcoholic beverages geared toward health-conscious consumers.
As the economy recovers and on-site establishments that serve alcohol reopen, consumers are expected to drive growth in demand from this downstream segment, benefiting the industry.
With per capita disposable income expected to rise an annualized 2.1% over the five years to 2026, aided by unprecedented federal government support and a recovering economy, research forecasts revenue to increase.
Revenue will likely grow at an annualized rate of 2.1% to $91.8 billion over the five years to 2026.
Consolidation among the industry’s largest distributors is also projected to continue, as operators vie for economies of scale and new geographic markets.
Industry
This industry comprises operators that primarily purchase, store, sell and distribute beer and other fermented malt beverages made by the Breweries industry.
This industry does not include operators that distribute distilled spirits and wine.
Investment
There’s little capital intensity in the beer wholesaling industry. Operators are expected to spend $0.13 on investing in capital in 2021 for every $1.00 spent on wages.
Capital expenses are mainly spent on buildings, trucking fleets and equipment and are replaced by them.
However, it is a very labor-intensive operation to receive and provide alcoholic drinks from producers and import places to end-users.
Dock employees manually take the merchandise up and transfer at reception stations in the warehouse. Consequently, in comparison to labor expenditure, which is essential to receive, packing and shipping beer products, the sector has small capital expenditure.
Nevertheless, a great deal is needed to ensure that personnel is able to store and track beer shipments for their vehicle and apparatus.
The RFID systems have lately become the industry standard for manual and electrical pallet batches for the transportation of bulk beer between discount centers, and they continue to be a permanent necessity for manual and electrical pallet batches.
Over the five years up to 2021, RFID technology has been the tool of choice for inventory tracking across numerous wholesale sectors.
The operations of the sector cannot be outsourced, therefore firms have to invest in new technology and train their employees to expand their income organically.
Volatility
Typically, the beer wholesale industry shows a low to medium volatility in revenue. Despite small dips, the rate of consumption of beer for adults in America remains high. Beer is becoming less popular with customers looking at alternative alcohol choices, such as wine.
Millenniums are less alcoholic and more inclined than earlier generations to select wine or spirits for beer. Moreover, in 2017, Nielsen stated that thousands of years are less likely than generations X and baby boomers to consume beer.
That is because other beverages like ciders, liquors and premixed beverages are more open. In the mainstream beer sale, the increasing customer interest in crafted beer has usually outweighed reductions. In 2017, there were 6,266 craft brasseries, double that number in 2013 and 23.4 percent of the beer market in craft beer.
However, the saturation of the market will impede the rise of craft brewers. The changes in handmade beer sales are mirrored in increases in the industry’s sales. The unpredictability of revenue in this business influences consumer choices.