The Craft Beer Craze

KAPITALL presents CRAFTBEER CRAZE THE Americans drank some 6.3 billion gallons of beer last year. That's just over 28 gallons per year for every American of legal age." 383 And while that may seem like a lot... ...beer consumption in the U.S. fell for four years during the recession. Millions of barrels consumed per year: 220 210 08 09 200 10 190 214 Million 210 Million 209 Million 205 Million But things are turning around... +19% Beer shipments in the U.S. rose 1.9% in the first eight months of 2012, [3] ..and tastes are changing. Much of the rebound is being driven by small-batch craft brewers. [3] During the same period, craft brewers did much better despite their relatively higher price: 7.8% 14.8% 18% Magic Hat Brewing Co. New Belgium Brewing Co. Sierra Nevada Brewing Co. Momentum in the industry isn't slowing... Lagunitas Brewing Co. more than doubled its brewery's capacity this spring to 600,000 barrels and its sales were up 40% in 2012. 31 +40% 2011 2012 .it's exploding! 98% Craft breweries account for 98% of all breweries in the United States I5] of all breweries Come in We're OPEN The beer business added more than one brewery per day last year. [6] The number of brewers in the U.S. topped 2,000 in 2012 for the first time since the late 19th century. Number of Breweries in the U.S.: 2,011 1,179 703 89 2,216 1887 1920 1921-1933 (Prohibition) 1934 1978 2012 Consumer interest in craft beer is at its peak... ..and there is unlimited potential for growth as more craft brewers enter the marketplace.") An additional 1,300 craft breweries are in planning stages in the United States. [3] So where does big beer, an American mainstay for years, fit in all of this? While craft beer saw a 13% increase in volume in 2011, overall U.S. beer sales were down 1.3% during that same period. B1 "It's simple: people are drinking less and drinking better. There's not much more to it than that." -- Jim Koch, CEO Sam Adams [9] So what has Big Beer done to keep up? In addition to acquiring small breweries and storied traditional brands, big brewers are increasingly working the craft beer craze with faux "crafty" beers 19] Anheuser-Busch's Shock Top and MillerCoors' Blue Moon appear to be created by smalltime operations, despite being produced by the world's largest brewers. [9] Blue Moon expanded barrel production by 12% in 2012 while Shock Top grew by an amazing 99%. +12% +99% 2011 2012 2011 2012 In fact, these "crafty" beers are all made by Big Beer: CB CRAFT BREW MOLSONCOors ALLIANCE CRAFT BEER ANHEUSER BUSCH MOLSON COORS ALLIANCE, INC. INBEV SA BREWING CO BREW: BUD: TAP: Widmer Brothers Stella Artois Killian's Irish Red Redhook Beck's Blue Moon Leinenkugel's Pilsner Urquell Kona Leffe Hoegaarden Shock Top Grolsch So now that the lines have been drawn, who will win? Graham Mackay, CEO SAB Miller says: "Let the consumer decide." Do you think Big Beer can cash in on the craft brewing craze? Here some other big players in the beer industry: ADAMS SAMV AmBev DIAGEO COMPANHIA DE BEBIDAS DAS AMÉRICAS THE BOSTON BEER DIAGEO PLC COMPANY, INc. (1) http://www.whec.com/news/stories/S2798650.shtml?cat=566 (2) http://www.beerinstitute.org/br/beer -statistics/latest-statistics (3) http://online.wsj.com/article/SB1000087239639044408330457801619348114 5184.html (4) http://wallstcheatsheet.com/breaking-news/recession-proof-why-the-alcohol-industry-is-thri ving.html/ (5) http://www.brewersassociation.org/pages/business-tools/craft-brewing-statistics/number-of- breweries (6) http://www.beerinsights.com/index.php?option=com_php<emid=17&aid=18195 (7) http:// m.csnews.com/mtop-story-beer_category_up_against_declining_consumption-61947.html (8) http://mana gement.fortune.cnn.com/2012/12/12/sabmiller-big-beer-craft-brewers/ (9) http://business.time.com/2012/ 12/27/trouble-brewing-the-craft-beer-vs-crafty-beer-cat-fight/ (10) http://www.beerinsights.com/index.php ?option=com_php<emid=17&aid=17926&pagesize=20&recordstart=0&search=shock%20top DISCLOSURE: ©2013 Kapitall, Inc. Kapitall Wire is a division of Kapitall Inc. Content is intended for educational information purposes only and should not be construed as an offer to buy or sell securities or any other product or servi ce provided by Kapitall Inc., and its affiliates companies. Brought to you by KAPITALL