Management Summary of Problems/Opportunities.
Overall, the beer industry is an extremely competitive industry operating in a stagnant and declining market. Macrobrewers have dominated the market; however, microbrewers have been able to erode market share by the product distinction of a perception of higher quality beer. Macrobrewers have countered this threat by posing as faux microbrewers often utilizing a repackaging and remarketing of existing product. This measure has been to no avail. Such tactics have merely given macro-micro brewers the image of trying to imitate quality. Contract brewers have also defined a market niche by circumventing capital costs to macrobreweries with excess operational capacity. Lastly, the market has also been substantially eroded by the increasing trend of substitutable alternative beverage consumption. This pattern is well entrenched in the socio-cultural fabric of the baby boom generation that espouses healthy lifestyle behaviors that will likely plague the industry for at least the next 30 years. .
A stagnant and declining market is projected for the beer industry for the near and long term. The potential for new beer markets is low and rather risky. Therefore new market business strategy should be limited toward areas of certainty. Therefore expansion of export opportunity in the U.S. to capitalize on newly opened trade opportunities available as a result of NAFTA and lower tax structures is an opportune strategy. Potential new markets also exist for expansion into the alternative substitutable beverage product lines. This is one of the only likely growing markets in the social beverage industry. Since new market opportunities are low, product differentiation and increased market share are critical business strategies. Pursuit of the development of supply chain management services is a robust strategy to indirectly gain market share. By directing value added product services to distributors and creating distributor dependency, a rather circular effect to increase market share can occur.