Economics

All about the Beer Industry

As the most popular alcoholic beverage in the world, beer is lucrative and significant to the economies of many countries.

Description

The beer industry is an important global business, taking in annual revenues of $294.5 billion. Many countries consume large amounts of alcohol each year, and among these beer is the most widely consumed alcoholic beverage in the world. It is also the third most popular of all beverages, just after water and tea. The global industry includes brewing, transporting, distribution, advertisement, and consumer consumption of beer. Brewing is the most important part of the industry, as this step is when the product is actually produced. The industry of making and creating beer is crucial for many countries' economies around the world. Though the brewing industry has traditionally been fairly fragmented, recent trends have seen it become more consolidated. In fact, one single brewery company, Anheuser-Busch, based in the US state of Missouri, currently claims 20.6% of the market share globally.

Location

The beer industry is still a global industry nonetheless. Breweries can be found all across the world, and beer is a major beverage for consumption in almost all countries in the world. The top beer exporting country in the world is Mexico, which takes up 18% of the market. The Mexican beer export industry is followed by those of the Netherlands, Germany, Belgium, the UK, the US, France, Denmark, Portugal, and Ireland. The top beer importing countries are China, the US, Brazil, Russia, Germany, Mexico, Japan, the UK, Poland, Spain, and India. Germany has the highest per capita consumption rate of beer. In terms of actual production, China produces the most beer worldwide, followed by the US and Germany.

Process

The brewing process typically involves 9 major steps. At first, milled and malted grain and water are mashed and heated, allowing enzymes in the malt to break down the starches in the grains. Then, the extracts achieved through mashing are separated to create "wort", with its impurities being washed away by hot water. Then yeast is added to the wort to allow fermentation to take place, through which fermentable sugars extracted from the malt are metabolized into alcohol and carbon dioxide. After these sugars are digested, the yeast cells begin to die and settle down, and the beer is then cooled. After that, the beer will be filtered so that all the settled solids at the bottom will be removed.The filtered beer is now ready to stored, transported, and distributed to consumers.

History

Although beer consumption can be traced back 5,000 years to Mesopotamian civilizations, the beer industry as we would recognize it today did not come into its own until the Medieval period. At this time, monasteries and Christian institutions started refining the production of beer to use as a medium of exchange. Thereafter, small breweries began to develop slowly across much of Europe. Large mechanical breweries started to develop during the Industrial Revolution. With innovative technological advances, the brewing process became more automated and less time-consuming. Today, beer is brewed within stainless steel vessels, which is an ideal material because it is sturdy, scentless, and transfers few chemicals. With the rise of global capitalism, advertisement has become an crucial part in growing the beer industry to its current size.

Regulations

Because the beer industry is such a massive and highly lucrative sector, it is usually subject to extensive government regulations in each country it is produced and consumed within. Regulations are imposed at almost every stage of the industry, including production, distribution, labeling, advertising, trade and pricing practices, credit, container characteristics, and alcoholic content. Various forms of taxes and licenses fees are also levied by governments, which serve as a profitable form of regulation for the governments imposing them. Specific alcohol taxation is also commonly issued as well. Like most major industries, regulations and rules are often imposed to control the environmental hazards related to brewing beer.

More in Economics