2024-09-20 21:26:40
As Oktoberfest, the beer festival, begins in Munich, we look back at the structuring of the beer market. After a craft phase, the sector experienced a movement of concentration at the turn of the twentieth century… until the return of craft beers in recent decades. If the movement seems to be running out of steam, microbreweries still have assets to play.
Beer has known, since the 18th centurye century, a progressive industrialization, leading to an increased concentration of the sector to the detriment of small local breweries. From the 1970s, microbreweries (production of a few hundred hectoliters) and craft breweries (a few thousand hectoliters) experienced a strong comeback, allowing the consumer to have access to a more varied range of products than ever. How did the beer industry move from local and artisanal production to domination by a few global players ? And why have we been witnessing a revival of artisanal production in recent decades? Is this sustainable?
Let us recall that, for most of its millennia-old history, beer remained an agricultural product, sought after as a source of nutrients – a “liquid bread” – and an alternative to water, often impure. Heavy and perishable, it was mainly consumed locally, including in the Middle Ages, when monks made it an essential drink in Europe. The situation changed at the turn of the first millennium, with the gradual introduction of hops, a “revolution” described by Johan Swinnen and Devin Briski in their work Beeronomicswhich allows beer to be better preserved and therefore extends its marketing well beyond its place of production.
8 people drowned in beer
The turning point in mass production was taken in England in the 18th century.e century when “common brewers” began to produce a brown beer called “Porter”, which they sold to bars, competing with the traditional “publican brewers”, who produced and sold their own “pale ale”, which was better but more expensive. At the beginning of the 19th centurye century, a cartel of a dozen families shared the English beer market. The episode of the “London Beer Flood” gives an idea of the quantities produced by these large breweries: on October 17, 1814 in London, the rupture of three mega vats of the Meux and Co’s Horse Shoe Brewery, flooded the St Giles district under 1.5 million liters of beer, killing eight people and causing the collapse of several buildings!
Industrialization and concentration of production accelerated from the second industrial revolution, with technological advances such as railways, refrigeration, or pasteurization. A new type of beer was born, the “lager”, a so-called “bottom-fermented” beer, clearer and lighter than the “ales” (top-fermented beers) produced until then. Pilsner, a lager of Czech origin, quickly became very popular worldwide and particularly in the United States, where it was introduced by the German immigrants. However, its production requires significant investments that can only be made profitable through large-scale production, favoring the largest players and therefore increasing concentration in the sector.
Concentration of companies and homogenization of taste
The XXe century saw a new acceleration in the consolidation of the brewing industry, first at the national level, worldwide thereafter. The two world wars in Europe and prohibition in the United States led to the bankruptcy, takeover, or merger of many small breweries, with only the largest players able to bear increasing production and distribution costs. In Belgium, the Artois (Stella) and Piedbœuf (Jupiler) breweries merged in 1971 to form Interbrew, which merged in the early 2000s with the Brazilian Ambev and renamed itself Inbev. In 2008, Inbev bought the American Anheuser-Busch to become AB-Inbev, now world number 1 in the sectorahead of the Dutch Heineken, the Chinese China Resources and the Danish Carlsberg]. These four players alone represent more than 50% of a global production estimated at 1,8 million d’hectolitres.
By the 1970s, there were only half a dozen independent breweries left in the United States, and about sixty in France, compared to more than 3,000 at the beginning of the century, when Mucha painted the famous advertising poster for “Meuse beers.”
This concentration led to a homogenization of available products, with large breweries focusing on beers with a mild taste that would appeal to the greatest number of people and be inexpensive to produce. In turn, this provoked reactions from the end of the 1960s: in the United States, Fritz Maytag bought the Anchor Brewing brewery in San Francisco in 1965 and relaunched artisanal production, marking the beginning of the “craft beer” movement. In Great Britain in 1971, CAMRA – initially the “Campaign for the Revitalization of Ale”, which later became the “Campaign for Real Ale” – took over from the “Flat Beer Society” to defend and promote the “authentic” local beersunfiltered and unpasteurized.
The return of microbreweries
The phenomenon exploded in the 1980s, particularly in the United States after the legalization of home brewing in 1978. Hundreds of microbreweries then emerged all over the world: in France, the movement was launched by the Brasserie des Deux Rivières created in 1985 in Morlaix, which became Coreff and is now based in Carhaix. It was followed by many others, for example the Basserie Pietra in Corsica in 1996, to reach a total of 2,500 breweries in operation in the country in 2021 for just under 10% of the shares of a market estimated at 24 million hectolitersFrance is then one of the countries in Europe where the number of breweries per inhabitant is the highest.
Forgotten styles – “India Pale Ale” (IPA), “Barleywine”, or “saison” – are being rediscovered and refined, original recipes are being created, giving new importance to the diversity of tastes and brewing techniques. Craft breweries are managing to capture a new demand from informed and curious consumers, looking for authentic, original and local products. We can then speak of a “golden age” of beer in the world.
This renaissance of craft breweries and microbreweries does not, however, mark the end of the story because the big brewers will seek to capture this new demand. They are expanding their brand portfolios – AB-Inbev has more than 500 – and are promoting “specialty” and “abbey” beers, positioned in segments close to those produced by microbreweries.
A blurred landscape
They create their own “craft” breweries, or acquire them: after having “swallowed” the SABMiller world number 2 in 2016AB-Inbev, thus embarked on a series of smaller acquisitions, including the craft breweries Camden Town Brewery (UK) and Four Peaks Brewing Co (EU). In France, the Parisian brewery Gallia, relaunched in 2009 from a former house closed in 1968, was discreetly bought by Heineken in 2021, after Lagunitas in 2015 and Mort subite in 2008.
Craft breweries are organizing to resist “Big Beer” by collaborating with each other, asserting their local roots, or creating labels such as “Independent Craft Brewer” certifying their independence. However, the very evolution of these craft breweries contributes to blurring the landscape because some of them have since become leading companies, even multinationals. For example, the Scottish microbrewery Brewdog, founded in 2007 by two people, will employ 2,600 in 2023 in 65 countries, including India. On a smaller scale, Ninkasi and the Brasserie du Mont-Blanc are very present on French shelves.
The end of a dream?
Furthermore, the outlook for craft breweries is darkening after the euphoria of the early 2000s: they are suffering first of all from the Covid-19 pandemic and lockdowns, which are depriving them of some of their outlets, disrupting their supply chains and increasing their production costs. The war in Ukraine and the ensuing inflationary shock are making the situation worse, with an increase in energy, transport, packaging (glass and cardboard) and raw material (cereal) costs. The pace of creation is slowing down, while some are filing for bankruptcy, such as the Burgundy breweries The Roteuse and Beers of the Dungeon. More than 110 collective procedures are thus launched in 2023, compared to a fifty per year in previous years. This is certainly not the end of microbreweries, but undoubtedly a rebalancing of their position in the industry.
In fact, while the rise of microbreweries and craft breweries has brought diversity and innovation back to the beer industry, the brewing landscape remains marked by the domination of large groups, whose acquisitions blur the boundaries between industry and crafts. It shows, despite everything, that the demand for diversified, authentic and quality products is not weakening and that microbreweries that will be able to take advantage of it have a bright future ahead of them!
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