Brewers, Large and Small, are Heavy into Metal

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Many brewers are also into heavy metal but that’s a different story altogether. Metal plays into the beer-making process in another, more essential way than just the music genre. (Although the music surely makes the labor of love a little easier.)

We recently came across a story in Crain’s Chicago Business about how the Chicago beer market is apparently so cutthroat that big breweries’ distributors (think the SABMillers and Anheuser-InBevs of the world) are resorting to dirty tricks to keep their brands on local taps. Allegations of “pay-to-play paying off bar owners in cash or free beer to carry their products have been made by members of the craft brewing industry, who are having a tough time as it is competing with the traditional beer behemoths. “Graft beer, indeed.

But the story that makes this a story in the first place, as it were, is that the beer business especially in the American market is quite widespread (regardless of whether Chicago’s beer environment is a crooked one, which it most likely is). The following chart shows US breweries in operation from 1940 through 2008.

Source: The Beer Institute – Brewer’s Almanac

Estimated domestic brewer production for 2010, according to the Beer Institute, is 153 million barrels. (31 gallons comprise a barrel.) The beer industry employs about 1.9 million Americas, paying out $62 billion in wages and benefits, and contributing more than $41 billion in taxes, according to Beer Serves America. Beer is the third-most popular beverage in the world, after water and tea.

And beyond water, malt, hops and yeast, the industry relies heavily on metals. Stainless steel and aluminum factor heavily into beer production and distribution. Mash tuns and brewing kettles, used as the boiling vessels for the malted barley and water, are often made of copper, and fermentation and storage tanks are primarily made of stainless steel. From a supply chain point of view, this equipment is sourced from US companies such as A & B Process Systems Corp., based in the heart of Wisconsin. (Recent supplier searches online point to an increasing number of these stainless tanks being sourced from China.) As far as aluminum goes, shipments of cans used for alcoholic beverages topped a decade-high 33.4 billion in 2009, according to the Beer Institute’s Brewers Almanac.

Sources: capital-brewery.com; asia.ru

The good news for suppliers is that craft brewers’ business is growing. The industry grew 9 percent by volume and 12 percent by retail dollars in the first half of 2010, compared to 7.2 percent by volume and 10.3 percent by dollars in 2009. As of July 31, 2010, US craft breweries numbered 1,599, representing 97.5 percent of the total number of breweries in the United States.

Source: Brewers Association

Although many microbreweries and brewpubs are only able to afford refurbished equipment, if we keep seeing sustained growth in craft breweries, then demand for new products will surely follow. And that’s good news for metal product suppliers and beer drinkers alike.

–Taras Berezowsky

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