The global top four brewers are leading the consolidation in the beer sector, according to a new report from international financial services provider, Rabobank.
The current top-four brewers, AB InBev, SAB Miller, Heineken and Carlsberg, have tripled their combined market share and quadrupled their volume between 2000 and 2009, it says. This has resulted in economies of scale and increased profitability.
According to the study, the global beer market has changed considerably over the past 10 years.
Global beer consumption has risen 3.3% annually, driven by a rapid rise in consumption in Asia, eastern Europe, South America and Africa on the back of increased disposable incomes.
In mature markets volume growth has been negligible. Rabobank says the major international brewers have reacted to these changes by entering emerging markets and consolidating in developed markets.
As a result, the competitive landscape has changed. In 2000, the top 10 brewers accounted for 38% of the global beer volume. By 2009, this had increased to 61%.
However, more striking is the emergence of a clear top four, say researchers. In 2000, the difference in volume between the number four, SAB, and number five, Interbrew, was under 1%. In 2009, the volume of the number four, Carlsberg, was almost twice that of number five, Tsingtao.
The strategies of the top four brewers have similarities, says Rabobank. By making acquisitions, they are all growing their volumes to benefit from economies of scale and from a global distribution platform that enables a portfolio approach. The growth of the top four is unlikely to come to an end in the near future, it says.
As the CEO of one of the market leaders points out: “You’re either at the table or on the menu.”
Brewers outside the top four will find it increasingly difficult to decide which course is best for them, says the report.