The global beer market1
At the turn of the century, the top 10 brewers accounted for just over one-third of global beer sales volumes. The past decade has seen a rapid consolidation, resulting in the top four brewers – Anheuser-Busch InBev, SABMiller, Heineken and Carlsberg – accounting for almost 50% of beer sales volumes and up to 75% of the global profit pool2. Consolidation has continued in the past 12 months with further transactions in Mexico and China. As the pace of consolidation slows in the future, organic volume growth is expected to come from developing markets along with value creation opportunities in developed markets. Alcohol trends
Category trends show a dichotomy between developing and developed beer markets. With incomes rising in emerging markets, consumers have shifted from informal, often commoditised, unregulated forms of alcohol to aspirational, attractively branded and safer beer products. The period from 1999 to 2008 saw commercially produced beer increasing its share of total alcohol consumption in emerging markets by over 800 bps from 32.8% in 1999 to 41.2% in 2008 on a pure alcohol basis. The same period saw a moderate decline in developed markets to 35.2% in 2008. The economic crisis caused an overall downturn in 2009 – one that was further exacerbated by government fiscal pressures leading to increases in beer excise and other taxation in order to raise funds. The consequent consumer price increases have constrained beer volume growth while favouring unregulated forms of alcohol. As the global economy improves, rising incomes continue to be a significant factor in developing beer markets as the category grows at the expense of illicit, high-alcohol spirits. In Africa, Latin America and Asia in particular, the rise in consumption is closely correlated to population and income growth3. Beer growth trends
Over the past five years the beer category has maintained a compound average growth rate (CAGR) of 3.5% globally. However, this reflects two very different pictures in emerging and developed markets with emerging markets growing at an average rate of 6.8% while developed markets declined by 3.4%. The largest contributors to this growth have been China (now the world's largest beer market), Africa and Eastern Europe. Given the economic pressures, total global beer consumption grew by less than 1% in 2009. That said, strong growth trends continued in some key emerging markets. China recorded an increase of over 7%, despite being hampered by heavy snow and wet weather that affected consumer demand. Africa experienced robust growth of 4%, driven by Angola, DR Congo, Mozambique and Nigeria. In Eastern Europe, certain beer markets contracted in 2009 as rising unemployment and declining on-premise consumption halted growth. Regulatory challenges created further headwinds in markets such as Russia and the beer market there declined 6% as a result. Macroeconomic indicators improved in some markets in the last three months of 2009. However, the drivers of beer consumption such as falling unemployment and rising consumption expenditure are expected to lag behind the recoveries in GDP. North America, hit hard in 2009 by high unemployment, particularly among men of beer-drinking age, is expected to see only slight growth. Globally, the beer market is expected to grow by 1.5% in 2010, led by a continuing strong performance in Asia, Africa and Latin America. China is expected to grow by 6.5%, Africa by 3.1% and Latin America by almost 3%. Western Europe is expected to continue the trend of declining beer volumes, driven by a shift in consumption to other beverages and the decline of on-premise consumption. Looking further ahead to 2014, the top 15 growth markets are forecast to deliver compounded annual growth of 3%. China is expected to account for more than 45% of this growth with the USA, Vietnam, Brazil, Ukraine, Russia, Mexico and Peru making up most of the balance. Beer...