Jeff Horwich: In the world of beer, big breweries keep getting bigger — just look at last week’s buyout of Mexico’s Grupo Modelo by Anheuser-Busch InBev. But, just in time for your Independence Day barbecue, many smaller breweries see an opportunity in the rapid consolidation of their industry.
Here’s Marketplace’s John Dimsdale.
John Dimsdale: Almost 90 percent of all beer sold in the U.S. comes from two brewing conglomerates: Anheuser Busch InBev and SAB MillerCoors.
Industry analyst Bump Williams says that concentration has led to higher prices and a dropoff in overall beer drinking in the last few years.
Bump Williams: I think the elimination of competition is bad. It leads to complacency and mediocrity and then there’s no innovation at all.
But one segment of the industry is innovating. Some craft brewers like Sierra Nevada, Lagunitas and New Belgium are doubling their capacity. Freelance beer writer John Holl says more consumers are willing to pay a premium for flavorful ales and lagers.
John Holl: It’s a more educated beer public these days. So people know styles they like and they seek them out. And with more choice out there, the craft breweries have benefited greatly.
Craft brewers make up less than 8 percent of the beer market now. But analyst Bump Williams figures their growth is sustainable, evidenced by the number of home brewers, like me, fermenting hops and grains in garages and basements all over the country.
Bump Williams: There’s more and more homebrewing supplies being sold in the United States now than I think has ever been sold in the past. That’s a real tribute to consumers wanting to experiment and try and make their own home beers.
After all, one of the country’s first homebrewers was George Washington.
In Washington, I’m John Dimsdale for Marketplace.
As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.
Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.
Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.