Alcoholic Beverages
SIC 2082, 2084, 2085
NAICS 312120, 312130, 312140
Three major segments constitute the global alcoholic beverage trade: breweries, which manufacture beers and ales; wineries, which produce wines and brandies; and distilleries, which produce various liquors and blended alcoholic drinks. For discussion of nonalcoholic beverages, see Soft Drinks and Bottled Water.
Alcoholic beverages have long been a part of cultures throughout the world. They are important consumer products and are heavily advertised and marketed. There are literally tens of thousands of brands of alcoholic beverages. Global consumption of alcoholic beverages increased steadily through the late 1990s and early 2000s, reaching about 195 billion liters by 2003. Average per capita consumption was about 31 liters per year. By 2004, China had overtaken traditional leader the United States in terms of market volume. After China and the United States, the largest markets for alcoholic beverages were Germany, Russia, and Brazil. According to Zenith International, global consumption of alcoholic drinks was expected to reach about 210 billion liters in 2007.
Beer dominates the alcoholic beverage industry, with about 74 percent of volume in 2002. Production of beer throughout the world increased from 1.395 billion hectoliters (36.85 billion gallons) in 2000 to some 1.468 billion hectoliters (38.78 billion gallons) in 2003. In the early 2000s, there were 56 major beer markets in the world, and the average global per capita consumption of beer was 5.6 gallons. The country with the highest per capita consumption was the Czech Republic with 45.3 gallons. Next were Ireland, Germany, Slovenia, and Austria. Though the United States had traditionally been the largest beer market by volume, vigorous growth in China spurred both production and sales in that country, which became the world's top producer in 2002 and was the largest and most rapidly expanding market as of 2004.
Although Asia suffered economic downturns, beer consumption, in general, remained stable through the 1990s. The demand in Asia accelerated in the early 2000s, especially in China. The outlook in the early 2000s was positive as well for Latin America's beer market due to factors including fast population growth; increase in the beer-drinking age group; and weather conditions in the region conducive to drinking beer. Consumption in Eastern European countries, particularly Russia, also rose in the early 2000s, prompting major brewing companies to step up investment in those regions.
In 2002, wine comprised 13 percent by volume of the global alcoholic beverage market. Even though exports were the mainstays of wine markets in most countries, there was a growing trend in the international wine industry toward a more global, market-oriented strategy. Countries were recognizing the need to work with each other in solving problems in regard to the reduction of trade barriers in the wine market. Western Europe, with its long history of old-world wines, was no longer setting the standard in the wine trade. Branded varietals (grape types) from other parts of the world, including Australia and California, played a bigger role in the international wine market, even though they accounted for only 5 to 7 percent of global exports and were responsible for just one-seventh of the world's wine production.
In 2004, according to the U.S. Department of Agriculture (USDA), the countries with the largest vineyard acreage and highest levels of wine production in the world were Spain, France, and Italy. Europe accounted for more than 50 percent of global consumption. The top five countries in the world ranked by wine consumption were France, Italy, the United States, Germany, and Spain. Per capita wine consumption showed Luxembourg in first place, followed by France, Italy, Portugal, and Croatia; the United States ranked thirty-fourth. In 2000, wine sales in the United States totaled US$19 billion, compared to US$6.2 billion in 1980. In 2004, U.S. wine sales reached a record volume of 278 million cases; imports grew by 4.4 percent, totaling 72 million cases.
Economic downturns in high-growth markets caused the global distilled spirits industry difficulty. To remedy this problem, large multinational organizations established premium brand groups that accounted for increased growth in international markets. They targeted other brands more narrowly, using a local or regional slant. In the early 2000s, white spirits made up approximately 42 percent of the market for branded distilled spirits. Local spirits accounted for 28 percent, and whiskey came in at 18 percent. Together, spirits made up 10 percent of the alcoholic beverages industry. China, Russia, and India were the largest spirits markets in 2002.
Branded beverages made up approximately 71 percent of U.S. distilled spirits exports in the early 2000s. Whiskey made up 59 percent; rum, 7 percent; and liquors and cordials, 3 percent. Vodka and gin were at the low end with 1.3 percent and 0.4 percent, respectively. The largest U.S. export market for whiskey was Japan. The biggest U.S. export markets for distilled spirits overall were Japan, Germany, and Australia.
Beer is made from a "mash" of fermented barley, malt, and rice or corn. It is naturally cloudy from sediment in the brews, but most commercial beers are clarified through filtration systems. U.S. brewers frequently use additives to stabilize foam and to maintain freshness, while European brewers use these additives less often. Almost all bottled and canned beer is pasteurized in the container to make sure that any remaining yeast does not continue to ferment. Draft beer, served from large kegs in taverns, bars, and other outlets, is not pasteurized and must be refrigerated to prevent spoilage.
In the early 2000s, lager, a pale, medium-hop-flavored beer, was the highest produced beer in the United States. It averaged 3.3 to 3.4 percent alcohol by weight and was highly carbonated. While Europe also produced many lagers, a higher percentage of European production was in heavier, dark beers. Stout, a very dark, almost syrup-like beer, was also popular in Europe, particularly in the United Kingdom and Ireland. Porter is a sweet malt brew with a high alcohol content of 6 to 7 percent. Malt liquor is beer made mostly from malt with a high level of fermentable sugars. Light beers have reduced calories and are made either by reducing the amount of grain or by adding an enzyme to reduce the starch content of the beer.
There are many different types of commercial beer, including pilsner, lager, ale, stout, light, malt liquor, dry, ice-brewed, bottled draft, and nonalcoholic. In the United States, the market was further segmented by price and quality, with beers being categorized as super premium, premium, and popular-priced. In the United States in 1999, light beer held a 40.1 percent share of the beer market, with premium accounting for a 25.9 share, and popular-priced accounting for the remainder, according to the 2002 Market Share Reporter.
Microbreweries and brewpubs in the United States had annual double-digit increases throughout most of the 1990s. By the early 2000s, craft beer was the country's fastest growing segment of the alcoholic beverage industry. According to a study by the American Journal of Sociology, the surging popularity of "craft brewing" was in part due to consumer reaction against established industrial brewers' lack of attention to new consumer preferences for more variety of flavor characteristics, color, freshness, foam, and other qualities of beer. In particular, 1997 was a banner year for the U.S. microbrewery industry. That year the number of American breweries surpassed those in Germany for the first time in at least two hundred years. Germany operated 1,234 breweries in 1997 compared to 1,273 in the United States, and by the middle of 1999 there were 1,414 American breweries, compared to just 43 in 1983. In 2004, the craft beer segment posted its second consecutive year of higher growth than imports.
However, at the end of the 1990s, a number of microbreweries experienced declines due to rapid over-expansion, although firms that tended to focus on regional sales saw better results. Acquisitions, mergers, and shutdowns were more common, but new microbrewery firms kept opening throughout the United States and continued to show significant growth. In 2002, the Association of Brewers reported 396 microbreweries, 46 regional specialty breweries, and 994 brewpubs in the United States.
Usually made from fermented grape juice, most wines are classified as red, white, or rose and also as dry, medium, or sweet. Wine categories include vintage wines, table wines, sparkling wines, and fortified wines.
Europe traditionally dominated the international wine business, though increasing competition from quality vineyards in Australia, California, and Chile altered this market. French wines are still considered world leaders in quality. Important French wine-growing regions include Bordeaux, Burgundy, Champagne, the Rhône valley, Alsace, the Midi, and Provence. German wine producers are known mainly for producing light, fruity white wines. The best German wines are said to be made from the...
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