Press Release

LONDON–(BUSINESS WIRE)–Technavio’s latest report on the global beer market provides an analysis on the most important trends expected to impact the market outlook from 2016-2020. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.

The top four emerging trends driving the global beer market according to Technavio food and beverage research analysts are:

Increase in prominence of beer in Africa

Market consolidation

New flavors

Demand for low-alcohol beer

Increase in prominence of beer in Africa

Africa’s growing population, increasing urbanization, and economic growth make it a lucrative market for global beer vendors. It is estimated that by 2025, Africa will account for one-fifth of the global population. Also, Africa has the largest working-age population in the world. In Tanzania, nearly 45% of the population is in the age group of 15-45 years, and this figure is expected to increase during the forecast period.

Arushi Thakur, one of Technavio’s lead industry expert for research on alcoholic-beverages, says, “Urbanization in most African countries plays a crucial role in driving the demand for beer in Africa over the next four years. Vendors are also increasing their presence in the market to tap the growing potential of the African market. SABMiller has a presence in 15 African countries, and it also has a presence in another six countries through partnerships with local and international brands such as French drinks company Castel.”

Market consolidation

The consolidation of the global beer market is another prominent trend emerging in the market. Top four vendors in the market, AB InBev, SABMiller, Heineken, and Carlsberg, control about 47% of the global beer market in terms of volume. Also, these four vendors make up about 74% of the total profit pool in the market. The industry’s Herfindahl Hirshman Index (HHI) has risen from 276 in 2003 to 725 in 2013. HHI is a measure of industry concentration. It is estimated that the takeover of SABMiller by AB InBev will push the combined entity’s HHI to above 2,500 in the US market. The takeover is expected to increase the market share of AB InBev to nearly 29% in terms of volume, and the combined entity will brew three in every 10 beers sold worldwide. Another reason for the consolidation of the market is the increasing preference of craft beer by consumers. The majority of craft breweries are independent entities and are not related to any global breweries.

New flavors

One of the key trends emerging in the global beer market is the introduction of new flavors by vendors to cater to the changing taste preferences of consumers. Vendors are coming up with new and innovative flavors for beers such as chocolate, blueberry, Brussel sprout, lemon, and various other flavors. In the US, nearly 27% of the new beer products launched in 2015 were new flavored beer products. Flavored beer is more popular among female consumers in the age group of 22-34 years as nearly 39% of consumers of flavored beer belonged to this category.

Demand for low-alcohol beer

Consumers now opt for a healthier lifestyle, which includes the consumption of healthy alcoholic drinks with low alcohol content. Many consumers are shifting from hard drinks to light drinks, which can be treated as a substitute. A low-alcohol drink typically contains between 0.5% and 1.2% alcohol by volume.

“Non-alcoholic beer is more popular among young consumers in the Americas and Europe and also among consumers in Middle Eastern countries, where the consumption of alcohol is taboo,” says Arushi.

According to Technavio researchers, the most-consumed beers in the US are light beers such as Bud Light, Millers Light, and Coors Light. Heineken launched its first non-alcohol beer in 2013 and has expanded it to 41 markets as of 2014. The revenue from the innovation category of Heineken, which includes low- and non-alcohol content beers, increased by 7.7% in 2014.

About Technavio

Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.

Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.