Beer Distributors

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 1,350 beer distributors in the US are the middlemen between the suppliers (breweries and importers) and the retailers (grocery stores, convenience stores, bars, restaurants, sporting venues etc.). Distributors must provide climate-controlled storage, transportation, and maintenance for perishable malt beverages from the time they leave the brewery until they arrive at the retailer.

Competition from Larger Distributors

Beer distributors are typically small, local operations, but the industry has been consolidating as larger distributors expand through acquisitions.

Shifts in Beer Consumption

Beer’s market share of alcohol consumption is slowly declining due to competition from wine and liquor, as well as health consciousness.

Industry size & Structure

The average beer distributor operates 1-2 warehouses, employs 86 workers and generates about $50 million in annual revenue.

    • The US has about 1,350 beer distributors with annual sales of about $68 billion and about 113,000 employees.
    • The largest populations of beer distributors include California (209), New York (173), Texas (169), Florida (141) and Pennsylvania (117).
    • Average inventory is about $5 million.
    • 77% of distributors employ less than 100 employees.
    • Top distributors in the US include Reyes Holdings, Goldring Gulf Distributing, Ben E. Keith Beverages, Silver Eagle Distributors LP, and Manhattan Beer Distributors LLC.
    • The number of breweries that supply the distribution industry is rapidly increasing. Currently, there are about 9,700 breweries in the US, up from 250 in 1990 and 2,300 in 2010.
                                      Industry Forecast
                                      Beer Distributors Industry Growth
                                      Source: Vertical IQ and Inforum

                                      Recent Developments

                                      Feb 20, 2024 - Labor Costs in Check in 2023
                                      • Employment by beer distributors was relatively unchanged (up less than 1%) in 2023 while average wages at alcohol distributors slipped 1.1% in December -- to $25.91 per hour -- compared to a year ago, according to BLS data. Following mid-to-high-single-digit sales growth in 2021 and 2022, sales growth is returning to more moderate levels, with sales for the US beer distributors industry forecast to grow at a 4.48% compounded annual rate from 2023 to 2027, comparable to the growth of the overall economy, according to the Interindustry Economic Research Fund.
                                      • Workers at the nation’s largest brewery, Anheuser-Busch, are threatening to strike if a deal isn’t reached by the February 29 deadline, halting the production of brands like Budweiser and Bud Light, Spectrum News reports. In December, thousands of the company’s workers represented by the International Brotherhood of Teamsters authorized a strike by a 99% vote. Five thousand Teamsters – about a quarter of Anheuser-Busch’s US workforce – are threatening to strike if a new contract isn’t reached. Union demands include wage increases, improved job security, and enhanced benefits. The Teamsters General President Sean O’Brien was quoted in The Wall Street in early February as saying “The halting of beer production at Anheuser-Busch’s US breweries appears imminent and unavoidable.” Anheuser-Busch, which claims to provide “the best jobs in the beer industry," has said its brands will continue to be available in the event of a strike.
                                      • 2023 was a rough year for beer with US shipments expected to reach their lowest level in 25 years, The Wall Street Journal reports. In the first nine months of 2023 beer shipments fell 5.3% and by year’s end were expected to hit their lowest level in a quarter-century, according to industry tracker Beer Marketer’s Insights cited by WSJ. A cocktail of factors, including changing consumer tastes and the Bud-Light boycott, conspired to depress beer consumption. Younger adults are consuming less alcohol than older consumers and when they drink prefer spirits to beer. Generation Z (born between 1997 and 2012) had the lowest alcohol consumption of any adult age group in the nation, with 58% of legal drinking-age respondents saying they had drunk alcohol in the past six months, a recent survey by MRI-Simmons found. Among those, 87% had consumed spirits while 56% had consumed beer.
                                      • Sales of non-alcoholic beer are soaring, The Wall Street Journal reports. While overall sales of beer, hard seltzer, and alcoholic cider spiked during the first year of the pandemic, sales have since lost their fizz. By contrast, sales of non-alcoholic beer were up 32% compared to a year ago in the 52 weeks through Sept. 9, and have averaged 31% growth over four years, according to data from NielsenIQ cited by WSJ. Beverage analysts attribute the rising sales of non-alcoholic beer to better quality and taste and a generational shift in drinking culture, with younger consumers in particular drinking less. The growth of the non-alcoholic beer category may also reflect savvy marketing and positioning by beer makers. Moreover, non-alcoholic options open up beer-drinking times and occasions, NielsenIQ data finds. Beer distributors may want to stock more non-alcoholic brews to compensate for falling sales of their alcoholic counterparts.
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