Economic Activity, Distribution, and Competition - Beer in France - Essay Example

College Beer in France Economic activity Despite numerous reports suggesting high levels of alcohol consumption in Europe, research has shown that Europeans are, after all, moderate drinkers compared to other regions. Consequently, beer marketers across Europe have to undertake serious and detailed studies to understand the real factors driving beer drinking trends across Europe before formulating effective marketing strategies to penetrate the European market. For instance, contrary to sensational reports that portray the continent as leading in beer intake, a 2010 Eurobarometer report indicated that 69% of alcohol drinkers consume an average of two or less drinks per day (Conibear, 32). Denmark leads the continent with the highest number of alcohol users at 93% followed by Sweden and Netherlands at 90 and 88% respectively. On the other hand, the alcohol consumers were in Portugal at 58% with Italy and Hungary at 60% and 64% respectively, a trend that has remained intact since 2006 (Conibear, 32). Therefore, as the statistics above indicate, France is a moderate alcohol consumer, making it necessary for any marketers to understand beer or alcohol consumption trends in the country before implementing any marketing strategy. France portrays interesting dynamics with regard to beer and alcohol consumption at large. According to Conibear (34), there has been a drastic culture change in France, Italy and Spain about beer and alcohol consumption since the 1980s. Reports on beer consumption in France indicate an interesting trend with the average number of beer consumers decreasing significantly since the 1990s. For instance, Conibear (35) reports of a decline in the number of alcohol consumers above 15 years since the 1980s. The French beer consumption per capita in 1980 was 20, declining to 15.4 in 1990 and 14 by the year 2000 (Conibear 34). Age too is an influential factor with regard to beer intake across France. While 68% of persons above 50 years preferred wine, 29% of consumers between 14 and 29 years preferred beer, while port had more preference among women consumers (Conibear, 35). Distribution France is an average beer producer in Europe compared to other European countries. According to a beer statistics report, France produced 14,731,000 hectoliters of beer in 2009, 16,290,000 hectoliters and 15,910,000 hectoliters of beer in 2010 and 2011 respectively (Brewers of Europe, 4). The above figures indicate an average level production compared to Germany, which had over 95,000,000 hectoliters of beer in the three consecutive years. These data affirm that consumption of beer in France is relatively lower compared to other European countries, though countries such as Slovakia have relatively lower production levels. Furthermore, consumption of beer in France is relatively lower than its production. In the period enumerated above, beer consumption in France was 20014, 19730 and 20000 thousand hectoliters in 2009, 2010 and 2011 respectively (Brewers of Europe, 4). The difference between production and consumption indicates that most of the beer produced is exported to other countries as it was not consumed locally. The export market offers a wider market across neighboring countries, an advantage to any company setting up a beer production unit in France. Several factors might explain the variation between production and consumption of beer in France. The major factor behind the variation could be related to the alcohol policies, which directly affect the beer market in the country. The Loi Evin or the alcohol policy in France has substantially limited any promotion or advertising of alcohol in the last 20 years (Conibear, 36). Moreover, increasing recessionary forces in the country could have curtailed many people from spending too much on alcohol, choosing to spend on alternative products. France has on the past increased beer taxation, a move that has threatened many beer drinking pubs. Another challenge that faces the beer market is the growing culture of the French preferring drinking at home than at pubs, a culture that has affected bars and other establishments that serve beer (Savage, 2012). In most cases, home drinkers tend to prefer wine and other types of cuisines to beer brands. However, according to the report, there has been a sharp increase in binge drinking especially among the youth in France, which may be blamed on poor policies and regulations on alcohol use (Connibear, 37). Competition Although France is famous for its world-class cuisines and wine brands, the country boasts of a wide range of indigenous beer cultures especially bordering with Germany and Belgium. These are the two neighboring countries with the largest percentage of beer consumers across the continent. Some of the famous brands in France include the Fischer, Kronenbourg, Meteor and Aldeshoffen company brands, which are all located in the Alsace-Lorraine region (Oliver and Colicchio, 375). Interestingly, most of the beer produced and consumed in the Northern parts of France are derivatives of the Munich lager and Germany pilsner, which command a sizeable market segment in the country. Moreover, other original French brands such as the spring beer (biere de printemps) and the biere de noel (Christmas beer) are also common across the country (Oliver and Colicchio, 376). According to Brooks, the French have historically portrayed preference to low alcohol beer brands blended with malty accents, a norm that developed as people could not trust the municipal water supplies in the past. A major characteristic of beer production in France is that most small-scale beer manufacturers across the country deal in the specialty beer segment, in a market dominated by mainstream global brands (Oliver and Colicchio, 275). Similar to the rest of Europe, Heineken, Stella Artois and Discher-Adelshoffen brands dominate the French beer market, making it hard for new entrants in the market. Other renowned brands from Germany and Belgium have also dominated the French, market making the market one of the richest in terms of beer brands, wines and cuisines. Despite the concentration of beer brands in the country and the fact that the French are the second lowest beer consumers after Italy with only about 16% of the French preferring beer, some American beer brands have also ventured in the market and are making impressive progress. Some of the American brands available in France include the Bud. The Brooklyn Brewery is the latest entrant in a market described as a hard nut to crack, particularly due to the large numbers of beer brands in the country the low beer consumption among the French (Hervieux, 2013). The secret behind the Brooklyn larger entry is targeting the specialized market by matching the beer to specific needs and tastes of consumers. As such, these brands are only available in selected restaurants and hospitality establishments. In summing up, though France is a low beer consuming country, there still exists opportunities for specialized beers in the country. Despite the country being dominated by major European brands such as the Heineken brands, targeting the specialty market may be the only breakthrough for new beer brands in a highly competitive and low consumption market. The required strategy has to involve targeting specific renowned restaurants and other amenities where such beers may be served depending on customer needs. Therefore, despite the significant challenges in the French market, there is still a window for new entrants to venture in the market. Work Cited Economic activity Conibear, Helena. European Drinking Trends: The Way We Drink Now. 2012 http://www.aim-digest.com/digest/members%20over%20yr/thewaywedrink.pdf 7th Oct. 2014. Competition Hervieux, Linda. Brooklynite Hits France, With Plans to Seduce. New York Times, 13 Feb. 2013. http://www.nytimes.com/2013/02/14/business/global/a-brooklyn-specialty-brewer-dares-the-french-market.html?_r=3&. 7th Oct. 2014. Savage, Maddy. Frances Beer Tax Rise: Fears in Industry. BBC News, 2nd Nov. 2012. http://www.bbc.com/news/world-europe-2017083 17th Oct. 2014. Oliver Garret and Colicchio Tom, The Oxford Companion to Beer. Oxford: OUP, 2012 Distribution The Brewers of Europe, Beer Statistics 2012 Edition. Oct. 2012. http://www.brewersofeurope.org/docs/publications/2012/stats_2012_web.pdf 17th Oct. 2014. Read More