{"id":20667,"date":"2012-06-22T00:00:00","date_gmt":"2012-06-22T00:00:00","guid":{"rendered":"http:\/\/global2020prd.wpengine.com\/insights\/brewing-up-a-storm\/"},"modified":"2020-03-21T08:24:46","modified_gmt":"2020-03-21T08:24:46","slug":"brewing-up-a-storm","status":"publish","type":"post","link":"https:\/\/www.global-integration.com\/insights\/brewing-up-a-storm\/","title":{"rendered":"Brewing up a Storm"},"content":{"rendered":"<figure id=\"attachment_5516\" aria-describedby=\"caption-attachment-5516\" style=\"width: 305px\" class=\"wp-caption alignleft\"><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-5516   \" title=\"beer silos\" src=\"https:\/\/www.global-integration.com\/wp-content\/uploads\/2012\/06\/beer-silos.jpg\" alt=\"\" width=\"305\" height=\"203\" \/><figcaption id=\"caption-attachment-5516\" class=\"wp-caption-text\">Beer silos<\/figcaption><\/figure>\n<p>&nbsp;<\/p>\n<p>The brewing industry faces similar challenges to many international manufacturers around the World.<\/p>\n<p>Heineken Americas\u2019 reported that its operating profit margin is being squeezed. Carlsberg\u2019s European beer market is declining in most of its twelve key regions, with only Switzerland remaining even. Markets in the USA, UK and Canada have matured and are flat.<\/p>\n<p>With profitability declining due to lower volumes and higher costs for raw materials and transportation, local markets changing with tastes and fashion, and increasing pressure to expand into new territories, the brewing industry is undergoing continuous change.<\/p>\n<p>The big brewers are now competing with each other for both brand awareness and channels to market (bars, restaurants and supermarkets), as well as with big local brewers (like Greene King in the UK), whilst both competing and co-operating for distribution channels to market.<\/p>\n<p><!--more-->The industry has responded in several key ways:\u00a0 increased marketing activity, improving working capital, managing redundant assets \u2013 and is looking to mergers and acquisitions, and to new territory markets despite exchange rate uncertainties. (In several key growth markets, the Polish zloty devalued by 3% last year, the Russian rouble devalued by 2%, and the Nigerian naira devalued by 8% last year. )<\/p>\n<p>Most are diversifying, either by owning more of the supply chain, or driving into new product areas. AB InBev is just one of those responding by diversifying into the \u2018craft beers\u2019 market, a small, but growth, proportion of the beer market, acquiring the Goose Island brewery in Chicago. Coors had already introduced Blue Moon. The diversification is also reaching outside of beers and into new drinks categories including blends, spirits and soft drinks.<\/p>\n<p>Japan\u2019s Kirin, meanwhile, is eyeing the pharmaceutical market, for example, whilst India\u2019s largest brewery, the United Breweries (UB) Group, which markets beer under the Kingfisher Brand, has even created an airline.<\/p>\n<p>Most of the challenges faced by the brewers aren\u2019t, however, new. Many of the big brewers were around in some form or another during times of US prohibition, most have been through economic slumps, regulatory change and changing tastes. What marks the current era is speed of change, globalized competition and shareholder pressure against a backdrop of market uncertainty and a fickle customer base which, increasingly, demands more than just a drink in a glass.<\/p>\n<p>Whether they call it a matrix or not, it\u2019s pretty clear that the big brewers have highly matrixed organizations. Each approach taken by the brewers (and most of them are adopting multiple tactics) presents not just financial challenges but some key personnel and management challenges, which require very different management skills to traditional \u2018command and control\u2019 hierarchies.<\/p>\n<p>Over the next week, we take a whistle stop tour through some of the challenges the industry faces, and the impact this creates\u2013 not so much from a production perspective: mostly the \u2018factory\u2019 type environment is a simple, hierarchical management exercise &#8211; but from the perspective of the lifeblood of the industry: its people.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>&nbsp; The brewing industry faces similar challenges to many international manufacturers around the World. Heineken Americas\u2019 reported that its operating [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"class_list":["post-20667","post","type-post","status-publish","format-standard","hentry","type-blog"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.6 (Yoast SEO v27.6) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Brewing up a Storm - Global Integration<\/title>\n<meta name=\"description\" content=\"&nbsp; The brewing industry faces similar challenges to many international manufacturers around the World. Heineken Americas\u2019 reported that its operating\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.global-integration.com\/insights\/brewing-up-a-storm\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Brewing up a Storm\" \/>\n<meta property=\"og:description\" content=\"&nbsp; The brewing industry faces similar challenges to many international manufacturers around the World. Heineken Americas\u2019 reported that its operating\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.global-integration.com\/insights\/brewing-up-a-storm\/\" \/>\n<meta property=\"og:site_name\" content=\"Global Integration\" \/>\n<meta property=\"article:published_time\" content=\"2012-06-22T00:00:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-03-21T08:24:46+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.global-integration.com\/wp-content\/uploads\/2012\/06\/beer-silos.jpg\" \/>\n<meta name=\"author\" content=\"Claire\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Claire\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.global-integration.com\\\/insights\\\/brewing-up-a-storm\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.global-integration.com\\\/insights\\\/brewing-up-a-storm\\\/\"},\"author\":{\"name\":\"Claire\",\"@id\":\"https:\\\/\\\/www.global-integration.com\\\/#\\\/schema\\\/person\\\/5949a056696166ef0cd8522506b63261\"},\"headline\":\"Brewing up a Storm\",\"datePublished\":\"2012-06-22T00:00:00+00:00\",\"dateModified\":\"2020-03-21T08:24:46+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.global-integration.com\\\/insights\\\/brewing-up-a-storm\\\/\"},\"wordCount\":502,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.global-integration.com\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/www.global-integration.com\\\/insights\\\/brewing-up-a-storm\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.global-integration.com\\\/wp-content\\\/uploads\\\/2012\\\/06\\\/beer-silos.jpg\",\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.global-integration.com\\\/insights\\\/brewing-up-a-storm\\\/\",\"url\":\"https:\\\/\\\/www.global-integration.com\\\/insights\\\/brewing-up-a-storm\\\/\",\"name\":\"Brewing up a Storm - Global Integration\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.global-integration.com\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/www.global-integration.com\\\/insights\\\/brewing-up-a-storm\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/www.global-integration.com\\\/insights\\\/brewing-up-a-storm\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.global-integration.com\\\/wp-content\\\/uploads\\\/2012\\\/06\\\/beer-silos.jpg\",\"datePublished\":\"2012-06-22T00:00:00+00:00\",\"dateModified\":\"2020-03-21T08:24:46+00:00\",\"description\":\"&nbsp; The brewing industry faces similar challenges to many international manufacturers around the World. 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