The Beer Industry in the United States - Term Paper Example

? The Beer Industry in United s Outline Introduction Review of Related Literatures a) A Brief Historical Account of Beer Industry in United s b) The Beer Industry and the Different Types of Beers c) The Beer Terminology in the United States d) The Structure of the American Beer Industry e) An Overview of Top 3 Brewing Companies in the United States f) A Look at the Microbreweries g) Understanding Home Brewing Conclusion References Introduction Beer has been part of various cultures across the world over a thousand of years. According to Nelson (2005), the world’s mostly consumed alcoholic drink happens to be likewise the world’s third most popular beverage of today. In addition to that, it was believed that the oldest fermented drink is beer (Arnold, 2005). There are many different beer products all over the world for the reason that the local ingredients available in every part of the world as well as the different activities of people have contributed to its manufacture and production. Throughout the world, brewing or the preparation of beer exists as an activity that even offers financial gains. As a point of fact, the United States of America is the leader in terms of beer production (Kirin Holdings, 2009). Not including the home brewers, United States has an estimate of 1700 breweries having the Anheuser - Busch Inc., the MillerCoors Brewing Corporation and the Pabst Brewing Company consecutively as its top three giant companies in terms of sales (Brewers Association, 2010). Nonetheless, despite the case that America comes to be number one in the production of beer around the world, it lags behind a number of countries, in particular, those in Europe, in terms of consumption making US ranked only second to China in total consumption and only 16th in the world in per capita consumption (Kirin Holdings, 2009). The number one position of United States of America in the production of beer makes it an interesting point to further know its beer industry. In this regard, the focus of this paper delves at grasping an understanding of the beer industry in the United States. Specifically, this paper aims to explore the following points. First, it aims at knowing how the beer industry has begun in America. Second, it targets to describe the types of beers. Third, it endeavors to understand what beer is in the American context. Fourth, it also seeks to define the structure of the American beer industry through looking at the top brewing companies and the craft breweries or microbreweries. Last, it aspires to take a particular look on the brewing at the domestic level. The need to explore the beer industry in American context can backed up by the reason that beer has always been part of the American culture. Beer has held its prominence to almost everyone existing in the world. Likewise, it is of interesting position that the United States is the leader of beer production. However, the beer industry in United States is not known to most of us. That is what this paper wants to shed light on. The significance of this paper is that it contributes to an understanding of what the beer industry looks like in the American context. Review of Related Literatures This part of the paper will first present a general idea of the available literatures about the beer industry in the United States. This review aims to offer a cursory outlook at how the range of presented data is sought to address the problem of this paper. In order to grasp a deeper understanding of the beer industry in the context of United States, this section is categorized into the following segments namely: a) A Brief Historical Account of Beer Industry in United States, b) The Beer Industry and the Different Types of Beers, c) The Beer Terminology in the United States, d) The Structure of the American Beer Industry, e) An Overview of Top 3 Brewing Companies in the United States, f) A Look at the Microbreweries, and g) Understanding Home Brewing. Meanwhile, it is deemed important to note that the reviewed books, articles and other materials presented in this paper is not a complete account of the whole array of the information regarding the topic on beer industry in United States. Nonetheless, these literatures are reviewed, scrutinised and presented in order to help in grasping a stance on what the beer industry looks like in United States. a) A Brief Historical Account of Beer Industry in United States In this day and age, beer has held its prominence making it the third most popular beverage in the world (Nelson, 2005). As a point of fact, for a thousand of years, beer has been part of different cultures across the globe. The local ingredients available in every part of the world as well as the different activities of people have contributed to the manufacture and production of the different beer products. Meanwhile, the earliest record of brewing was noted even before the arrival of the Europeans in the lands of the United States. Back to that era, it was the Native American tribes who had first brewed beer which according to Jackson (1991), this sort of beer was made up of water, birch sap and maize. The non – Natives, on the one hand, first brewing activity in America was recorded on the year 1587 (Jackson, 1991). The first commercial brewery in America, the Dutch West India Company, located in Manhattan, had opened during the period of early 1630s when New York was still known as the New Amsterdam. Back then, however, beer was not much of an industry. Because of the influence by England and Netherlands’s brewing tradition, the colonial drinking was led by beer instead of wine. During the mid – 19th century, the brewing in America was controlled by the British style ales. Nonetheless, it was only when the lager style was brought by the German immigrants when beer had happened to be an industry due to the more profit it yielded from the large – scale manufacturing and distribution and from its longevity (Jain, no date; Ogle, 2006). True enough, the beer industry had even survived the Dark Ages. Beer continued to remain despite the case that it was prohibited and was considered to be illegal in the 1919 (Jacobson, 2009). Nonetheless, Brewers were allowed to legally resume the beer industry (Jacobson, 2009). It can be said that the United States of America is the leader in terms of beer production. However, it lags behind a number of countries, in particular, those in Europe, in terms of consumption making US ranked only second to China in total consumption and only 16th in the world in per capita consumption (Kirin Holdings, 2009). b) The Beer Industry and the Different Types of Beers There are approximately 20,000 brands of beer or malt beverages being sold around the world. Based on the “Retail Guide to Beer” in 1992, beer has two different types depending on its fermentation in which the ales are the top – fermented ones while the lager are those bottom – fermented ones which have longer longevity than the former. The major styles of ale are of different origins namely altbier, bitter, brown ale, lambic, pale ale, porter, Scotch ale, stout, trappist, and weisse (weissbier) and cream ale, It was the Americans who had invented the cream ale which is usually made of combinations of lager and mild, light – bodied, pale golden ale (Retail Guide to Beer, 1992). On the one hand, the lager has bock, Dortmunder, dry, marzen, munchener (Munich – style), Pilsner (Pils), steam beer and Vienna as its major styles. Meanwhile, the steam beer is the only lager style original to America. It was a California made beer when the early American brewers endeavored create a beer which is fermented at the bottom without much supply of ice. Steam beer is now Anchor Steam Brewing’s trademark since this company is the only one who can produce this different sort of beer with a combined lager and ale as its characteristic (Retail Guide to Beer, 1992). c) The Beer Terminology in the United States It is the case that the bottom – type of beer, the lager, has happened to be the predominantly brewed beer in the United States. As a point of fact, America is the world’s main producer of lager beer. However, it is crucial to note that the style is also used interchangeably with lager (Jain, no date). In the context of America, if the alcoholic content of a malt beverage has exceeded 5 per cent, it can no longer be categorized as “beer”. Instead of labelling such as beer, it can be now called as “ale”, “porter” or “stout”. It is deemed confusing since such are not prepared with top – fermented yeast but instead, brewed with the bottom – fermented yeast (Jain, no date). According to Jain (no date), the United States has used to label the beer with high alcoholic content as “malt liquor”. Nonetheless, it is crucial to notice that in any sense, such malt liquor is not liquor. It is not even malty. True enough, this malt liquor in America is the pale lagers containing more alcoholic content than the ordinary beers. d) The Structure of the American Beer Industry According to Paul Gatza, the Director of the Brewers Association (2010), there are more than 1,700 breweries which make and produce beer in America. This includes the giants in the beer industry, the brew pubs, as well as the microbreweries but excluding the home brewers. In 2010, the top brewer company is the Anheuser - Busch Inc. MillerCoors Brewing Corporation only comes next to Anheuser. Coming third in rank is the Pabst Brewing Company. These are the three giant companies competing in the American beer industry. Other companies making it to the 2010 Top 50 Brewing Companies are the following: D.G. Tuengling and Son Inc., Boston Beer Co., Sierra Nevada Brewing Co., New Belgium Brewing Co., North American Breweries, Craft Brewers Alliance, Inc., Spoetzl Brewery, Deschutes Brewery, Independent Brewers United, Matt Brewing Co., Minhas Craft Brewery, Minhas Craft Brewery, Bell’s Brewery, Inc., Harpoon Brewery, Boulevard Brewing Co., Goose Island Beer Co., Dogfish Head Craft Brewing, Alaskan Brewing and Bottling Co., Long Trail Brewing Co., August Schell Brewing Co., Stone Brewing Co., Abita Brewing Co., Brooklyn Brewery, Lagunitas Brewing Co., Full Sail Brewing Co., Full Sail Brewing Co., Shipyard Brewing Co., Summit Brewing Co., New Glarus Brewing Co., Great Lakes Brewing Co., Anchor Brewing Co., Iron City Brewing Co., Kona Brewery LLC, Rogue Ales, Firestone Walker Brewing Co., Sweetwater Brewing Co., Mendocino Brewing Co., Flying Dog Brewery, Victory Brewing Co., Gordon Biersch Brewing Co., BJ’s Chicago Pizza & Brewery, Inc., Stevens Point Brewery Co., Odell Brewing Co., BridgePort Brewing Co., Cold Spring Brewing Co., Rock Bottom Brewery, Oskar Blues Brewery, and Straub Brewery (Brewers Association, 2010). In order to have an understanding of the how various brands of beer are positioned in the market, it is important to note that there are seven categories namely the super – premium, premium, malt, popular, imports and low alcohol. The super – premium beers are the expensive types of beers which are considered to have some specialty and seasonal brews. The premium beers, on the one hand, are manufactured by majority of the brewers. In terms of pricing, it is much expensive than popular types of beer yet it targets the mainstream consumers. Meanwhile, the light beers have lower calorie content. Malts do contain much higher alcohol level content as compared to the average and has likewise unique flavor. The popular beers are the cheapest sort of beer available in the market. Those imported beers are the most expensive beer existing in the market. Lastly, the low alcohol, by the name itself, has low alcoholic content of about half of the average, and there also exists non – alcohol belonging in the same category (Jain, no date). e) An Overview of Top 3 Brewing Companies in the United States The leading brewing company in United States is the Anheuser - Busch Inc. The company mainly aims to be the market leader among its competitors through continuously updating its brand portfolio and innovating through its new product lines. To ensure its leadership, Anheuser – Busch Inc. has a strong brand targeting different type of consumers in each beer segment. Its beer products are categorized into seven segments such as super premium, premium, popular, light, malt, non – alcoholic and imported. Michelob brand as well as its classic dark and dry variants makes up its super premium segment. The Michelob Golden Draft, on the one hand, together with Budweiser and Budweiser Ice Draft is its premium brands. The popular ones are Busch and Natural Pilsner. In the light category, it has Michelob Light, Michelob Golden Draft Light, Natural Light, Bud Light and the Busch Light Draft. Its malt segment has King Cobra. Non – alcoholic variety has the O’Doul’s at its brand. Last but not the least, the brands Elephant Malt, Carlsberg and Carlsberg Light are its imported line of products. These are only some of its brands. Its recent innovations consist of Bud Light Lime Lima-A-Rita, ULTRA 19th ULTRA Light Cider, Shock Top Lemon Shandy, Shock Top Wheat IPA and Hole Light Tea & Lemonade. In addition to that, it is important to note that Budweiser and Bud Light are its two best – selling beers not only in United of States but in the whole world (Anheuser – Busch InBev in the U.S. Key Facts & Figures, 2012). In terms of distribution, the Anheuser - Busch has a huge network. It has an estimate of 900 independent wholesalers and 32 distributorships wherein the 22 are only partially owned while the other 10 are owned by companies. Such network is spread out all over America. Likewise, since the early 1980s, Anheuser – Busch is present even in the international markets (Jain, no date). On the one hand, the MillerCoors Brewing Corporation, second to Anheuser – Busch Inc., has been very determined to be the own the position which Anheuser – Busch currently holds. It introduces new products targeting all beer segments. Its super – premium category has Miller Reserve and Lowenbrau. For its premium segment, Miller High Life, Miller Clear, Miller Genuine Draft and Miller “Icehouse” make up this category. The light segment has Meiser Brau Light, Leinenkugel Light, Lowenbrau Light, Genuine Draft Light, Miller Reserve Light, Miller Light and Milwaukee’ Best Light. Its Magnum brand makes up its malt category while Sharp’s for its non – alcohol segment. It has the brands of Leinenkugel, Leinenkugel Limited and Chippewa Pride for its specialty category. Lastly, Molson and Foster’s make up the imported brands. In terms of distribution, MillerCoors tried and worked to close the trust gap among its distributors. In this way, the success of the company can be ensured (Jain, no date). Last but not the least, according to Jain (no date), the Pabst Brewing Company, has made it to the top 3 brewing company in US when some of its brands have exposed such favorable trends in the market. Its brand portfolio includes Pabst Blue Ribbon, Colt 45, National Bohemian, Jacob Best, Old Milwaukee, Schlitz, Stroh’s, St. Ides, Rainier Beer, Olympia, Old Style and Lone Star (Pabst Brewing Co., 2012). f) A Look at the Microbreweries The kind of brewery which produces a limited extent of beer is called microbrewery (Boteler, 2009). In the context of United States, microbrewery is synonymous to the small, independent and traditional type or what is known also as “craft brewery” (Brewers Association, 2010). The microbrewery yields not more than six million beer barrels annually. To be considered as a craft brewery, it should be not owned by more than 24 per cent share by another company whose nature of business is also alcoholic beverage (Brewers Association, 2010). On the one hand, a brewpub can also be identified as microbrewery if its distribution is governed by premises. In America, the 75 per cent of production is used to distinguish if a company can be classified as a microbrewery. Among the 1700 breweries in the United States, the 43 breweries are not classified as craft brewers, the other 100 are also not regarded as micro and brewpub. In this case, the greatest majority can be considered as craft brewers. Similar to the top 50 brewing companies in United States, the American Brewers Association has also listed the top 50 ranking craft brewers in America. In 2010, the top rank is owned by the Boston Beer Co. This is followed secondly by Sierra Nevada Brewing Co. The third position is owned by New Belgium Brewing Co. The fourth to fiftieth ranks are consecutively as follows: Spoetzl Brewery, Deschutes Brewery, Independent Brewers United (IBU), Matt Brewing Co., Bell's Brewery, Inc., Harpoon Brewery, Boulevard Brewing Co., Dogfish Head Craft Brewery, Alaskan Brewing and Bottling Co., Long Trail Brewing Co., Stone Brewing Co., Abita Brewing Co., Brooklyn Brewery, Lagunitas Brewing Co., Full Sail Brewing Co., Shipyard Brewing Co., Summit Brewing Co., New Glarus Brewing Co., Great Lakes Brewing Co., Anchor Brewing Co., Kona Brewery LLC, Rogue Ales Firestone Walker Brewing Co., Sweetwater Brewing Co., Flying Dog Brewery, Victory Brewing Co., Gordon Biersch Brewing Co., BJ's Chicago Pizza & Brewery, Inc., Stevens Point Brewery Co., Odell Brewing Co., BridgePort Brewing Co., Rock Bottom Brewery Restaurants, Oskar Blues Brewery, Blue Point Brewing Co., Lost Coast Brewery and Cafe, Big Sky Brewing Co., North Coast Brewing Co. Inc., Mac and Jack's Brewery, The Saint Louis Brewery, Inc., Bear Republic Brewing Co., Karl Strauss Brewing Co., Breckenridge Brewery, Utah Brewers Cooperative, Gordon Biersch Brewery Restaurants, Saint Arnold Brewing Co., Real Ale Brewing Co. and Ninkasi Brewing Co (Brewers Association, 2010). g) Understanding Home Brewing Brewing of beer and other alcoholic beverage can also be done at the domestic level through small scale fermentation. Homebrewing is usually done as a hobby, for personal consumption and other reasons. The concept of homebrewing has even existed and begun thousands years ago. However, it was banned before in the history of United States but was legalized in 1978 when President Jimmy Carter had signed the bill. Nonetheless, the bill has allowed the different states of America to implement their specific laws that control the production of alcoholic beverage at home (Mittleman, 2007). It is the case that America has established itself as having a home winemaking culture and homebrewing of beer. There are various reasons accounting to why people brew domestically. According to Parker (2006), first and foremost, the reason is because of its cheap cost than the cost of purchasing the commercial alcoholic drinks. True enough, home brewing provides the freedom to adjust recipes of beer based on their own preferences (Papazian, 1991). Conclusion In the review of the beer industry in United States, it has been established that America holds the number one position in terms of production of beer. With its 1700 breweries in estimation which excludes the home brewers, the beer industry in United States is indeed an interesting case to look at. The beer industry in America has such wide - ranging aspects for the reason that it is not only composed of giant brewing companies, but there are also the craft breweries or the microbreweries as well as home brewers. As influenced by Germany, America happens to be the number one producer of lager type of beer today. Nonetheless, the context of beer in United States is a special case for the reason that it has beer terminologies as compared to the other parts of the world. Similarly, some of its beer terminologies contradict what it really means like if the alcoholic content of beer has happened to be greater than 5 per cent, it is now called ale despite the fact that it is a lager. The presented literatures state that the beer industry of America is influenced by many countries like England, Netherland, Germany and others. It can be said that the confusing terminology in U.S. is due to its different influencers, however, this lacks evidences. References: Anheuser – Busch InBev (2012). Anheuser – Busch InBev in the U.S. Key Facts & Figures. Retrieved from: Arnold, John P (2005). Origin and history of beer and brewing: from prehistoric times to the beginning of brewing science and technology. Cleveland, Ohio: BeerBooks. Boteler, Alison (2009). The gourmet's guide to cooking with beer. Quarry Books. Brewers Association (2010). Brewers Association releases 2010 top 50 breweries list. Retrieved from: Jacobson, Lisa (2009). “Beer goes to war: The politics of beer promotion and production in the Second World War.” Food, Culture & Society 12 (3): 275-312. Jackson, Michael (1997). The world guide to beer. New York: Ballantine Jain, Subhash (no date). “Global competitiveness in the beer industry: A case study.” Food Marketing Policy Center Research Report No. 28. Kirin Holdings (2009). Kirin Institute of food and lifestyle report Vol. 22 2008 beer consumption in major countries. Retrieved from: Mittleman, Amy (2007). Brewing battles: A history of American beer. Algora Publishing Nelson, Max (2005). The Barbarian's beverage: A history of beer in ancient Europe. Abingdon, Oxon: Routledge. Ogle, Maureen (2006). Ambitious Brew: the story of American beer. Orlando: Harcourt Pabst Brewing Co. (2012). Beer portfolio. Retrieved from: Papazian, Charlie (1991). The new complete joy of home brewing. Avon Books. Parker, Jim (2006).Basic homebrewing: all the skills and tools you need to get started (1st ed.). Mechanicsburg, PA: Stackpole Books. _______. (1992). “Retail guide to beer.” Beverage Dynamics July – August: 40-51. Read More