The $590 Billion Beer Market and Its Five Biggest Competitors

Manufacturing

“While the beer industry is insisting that the growing popularity of marijuana is not affecting sales, beer makers are not taking any chances. They are investing big time in creating liquid marijuana brands.”

 

People all over the world every year consume beer worth a total of $590 billion (2018 figure). China, the United States, Brazil, Mexico, and Germany are the top 5 producers of beer across the globe while the 5 top beer-drinking nations per capita are Czech Republic (142.4 litres), Seychelles (114.6), Austria (104.7), Germany (104.7), and Namibia (102.7). Nigerians drink 12.28 litres per year.

This is a poor indication of Nigerians’ love for alcohol as 84% of the alcohol consumed in Nigeria consists of locally brewed beverages (aka Burukutu).

Nigerian drinkers also think that they consume more alcohol as our beer is “stronger” – the American rapper, Cardi B, was widely reported to have recently gotten drunk on just half a glass.
Arbitez.com reported that there is a decline in beer drinking in many parts of the world. In the USA, for instance, the sale of beer has dropped by 2.4% in the last 5 years, according to IWSR Drinks Market Analysis. The biggest competition to beer in the USA are:

WEED

The cannabis market in the USA is worth about $50 billion per annum. The establishment of legalized systems to sell and tax cannabis in ten US states is contributing to the expansion of the industry. It is due to grow as more states legalize marijuana.

A key attraction of marijuana is that it is cheap and it doesn’t cause hangovers and vomiting. According to a 27-year-old business analyst, “I definitely enjoy weed better. It’s more relaxing, don’t have to worry about how I acted the night before, and don’t have to deal with hangovers or throwing up the morning after.”

Marijuana costs her less than $30 a month as opposed to $30 to $50 on alcohol in a night. See Market Watch.

In Canada, there is clear evidence that the legalisation of marijuana has negatively impacted beer sales. The evidence is not yet so clear in the USA where beer industry analysts still argue that people don’t drink beer or smoke weed but enjoy their beer while smoking weed. So, the two are complementary.

LIQUID WEED

This is a non-alcoholic drink infused with marijuana. One of its promoters is Keith Villa, who has a Ph.D. in brewing from the University of Brussels and is the cofounder of Ceria Brewing Co., makers of Grainwave Belgian-Style White Ale. Villa sees a future in marijuana-infused beverages because “Alcohol is being consumed less and less by young people, and they’re looking for an alternative that tastes great, has fewer calories, and doesn’t give you a hangover…with this generation of young adults, no one wants to lose control and end up seeing their image on Facebook or Instagram.” While the beer industry is insisting that the growing popularity of marijuana is not affecting sales, beer makers are not taking any chances. They are investing big time in creating liquid marijuana brands.

Anheuser-Busch InBev has invested $50 million in a joint venture with the British Columbia-based Tilray to make marijuana-based beverages.

Similarly, Heineken-owned Lagunitas has brought a hop-flavored, pot-infused sparkling water to the market in partnership with Sonoma’s CannaCraft. Constellation Brands, makers of the iconic Corona beer invested almost $4 billion — the largest investment ever in marijuana — to buy a 38 percent stake in the biggest Canadian marijuana producer, Canopy Growth.

CANNED WINE

Selling and drinking wines in cans has suddenly become popular, jumping 73% in sales between 2018 and 2019. Canned wines are very portable and very attractive – these factors have boosted sales. Andrew Browne of Precept Wine has been a major populariser of the canned wines trend. He got inspiration for starting his company when he noticed that people desired easily portable wines for social events, like boating and tailgating.

PREMIUM LIQUOR

Spirits are in. Distilled spirits such as whiskey and tequila have seen strongly growing sales for the past nine years. The category is now a $15 billion sub-industry.

The makers of Jack Daniels, Brown-Forman (BFA), leads the industry with a portfolio of super-premium whiskeys, including Woodford Reserve, Jack Daniel’s Single Barrel and Gentleman Jack and its tequila brands, led by Herradura.

KOMBUCHA

The $1billion Kombucha industry has grown from the craze for homebrewing tea, sugar, bacteria, and yeast. The fermented drink is popular amongst people who follow a “health and wellness” lifestyle. Kombucha is reputed to help prevent and manage every ailment from cancer to high blood pressure.

Dr. Brent A. Bauer of the Mayo Clinic, said that there is no scientific basis for these claims, but there is some evidence that the Kombucha improves the immune system and helps prevent constipation.

The Kombucha market is set to grow to $3.81 billion in 2023, driven by increasing health consciousness.  Andrew Clark, co-founder of Boochcraft, one of the segment’s most innovative brands, says “We want to use this product as a platform to talk about this being the healthiest version of drinking you can do”. The Kombucha segment is as varied as it is experimental.

Flavours include turmeric, lime, berries, hibiscus, apple, lemongrass and tangerine juices, plus herbs like rosehips and anise. There are brands with no alcohol while brewers like Boochcraft have invented highly complicated secret processes to raise the alcohol content to as high as 7% abv (alcohol by volume).

Kombucha is going mainstream even in late adopter countries like Britain. Real Kombucha, a local brand has been rolled out to 320 Fuller pubs, top 300 hotels, and 50 Michelin-starred restaurants. The driver in Britain as elsewhere is health consciousness. According to the CEO of Comstock, a brewer, Kombucha has “…a reasonable level of alcohol, 100 calories, and less than two carbs and two grams of sugar. That is something consumers can feel good about drinking. They’re not afraid to have more than one.”

THE NIGERIAN MARKET

We have never seen a bottle of Kombucha in Nigeria. But here are the alternatives to beer in the country with some numbers we have been able to lay our hands-on.

A 2016 United States Department of Agriculture (USDA) reported that spirits constitute about 30% of Nigeria’s $6.5billion market for alcoholic beverages, with beer leading with 55% of the market, and with wine accounting for the remaining 15%. Here are the challenges to beer in Nigeria; more analysis and harder numbers are required on consumption patterns relative to beer i.e. the extent to which these “alternatives” are complementary or competitive.

 

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