Posts Tagged ‘beer’

Americans now Only Spend $1.98 on Wine For Every Dollar Spent on Beer (vs $3.00 in 2000)

September 21st, 2011 Michael McDonough Comments off

Prior to prohibition there were a large number of craft breweries in the U.S., during prohibition they all of course were forced to close.  In the years following the repeal of prohibition Americans acquired a taste for questionable quality macro-breweries (Bud, Pabst, Coors, etc).

About a decade or two ago the craft beer movement in the U.S. started a resurgence with the likes of Samuel Adams and Anchor Steam.  In fact over the last couple years the number of craft brewers in the U.S. has again reached the levels seen prior to prohibition.  According to the Brewers Association “1,753 breweries operated for some or all of 2010, the highest total since the late-1800s.”

So Americans are re-acquiring a taste for better, more expensive beer, which is why we are most likely seeing the amount of money spent on beer rising relative to wine.  I am in favor of this trend, and really enjoy the growing selection of high quality craft beers.

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Weekend Musings: High Tech Stein Keeps Beer ‘Frosty’ For Days

April 3rd, 2010 Michael McDonough Comments off

Source: Bloomberg

As a fan of beer, technology, and business I may have stumbled upon the perfect article this morning on Bloomberg to write a quick weekend note.  Apparently, a nuclear scientist–who looks like he would feel quite at home in any brewery–crafted a beer mug designed with the same technology used to store liquid nitrogen.  The effect beer, that will stay ‘frosty’ for days once placed inside the mug.  The problem , the stein doesn’t come cheap, currently they are being sold for $375 (the gallon size).  However, considering I recently purchased a $400 vacuum as a gift for someone, the high price point for a magic beer stein doesn’t seem so bad!

Apparently, Phil Broughton–the creator–presently an employee of UC Berkeley, came up with the idea while on forced furlough in September due to California’s state budget problems.  Prior to working at Berkeley, Phil had positions at the Lawerence Livermore Lab and the Amundsen-Scott South Pole Station (suffice to say he is a bright guy).  It was reported that while working at the South Pole station he twilighted as a bartender and would increase the alcohol content of drinks by removing excess water with liquid nitrogen.  I am beginning to think if there was a Nobel Prize for the art of drinking, then this guy would be a serious contender.  The steins can be purchased here, but look to be presently sold out.   I do not receive any commission, or any advertising revenue for the link, but nevertheless if you have the money I think you should buy this.

And in case you missed it you can buy this miracle stein here:

As a side note, to see my most recent column on Bloomberg please click here (I wish the topic was as interesting!)


Tsingtao’s Profit up 68% During 1H09 on Higher Volumes

August 7th, 2009 Michael McDonough Comments off

I thought I would point out, after my Chinese beer market piece, that Tsingtao today announced a 68% rise in 1H09 profits, backed by a 12.9% increase in volumes.  This helps support my argument that Tsingtao is very well positioned to take advantage of significant unrealized potential within the Chinese beer market.  Tsingtao’s leading foreign competition in China is Anheuser-Busch InBev and SABMiller, who are likely to also benefit from China’s growing demand.  During the first  six months of this year Chinese beer production grew 6%, rising to 20.5bn liters.

Tsingtao Equity Performance

TsingtaoSource: Bloomberg


Vast Potential in Chinese Beer Market Barely Tapped

August 3rd, 2009 Michael McDonough Comments off

ChinaBeerI was perusing the internet the other night, as I usually do, and began to notice a trend. It all started with this headline “SABMiller Halts Beer Volume Drop on Chinese Demand”. At first I didn’t think too much of, so I move on. Several minutes later, on a completely unrelated site, I come across this headline “Net profit in China’s major beer producer Yanjing up 25% in first half”. Now I was convinced something was up, and I wanted to know more.

To my surprise. it turns out by volume China is the world’s biggest beer consumer. But, on a per capita basis China’s beer habit appears far less impressive at just 22.1 liters per year, this compares to 81.6 liters per year in the US. However, both frail in comparison to the Czech Republic whose residents imbibe an astounding 156.9 liters per capita–that’s roughly 41 gallons of beer per person per year!

This chart shows 2004’s annual beer consumption by volume for the top 15 countries, along with their per capita beer consumption:

Beer Consumption

Source: Kirin

Once my mind synthesized the headlines I mentioned earlier, and these beer statistics, I realized the global beer industry could be at the dawn of a new age, especially in China. China’s population is currently estimated at around 1.3bn, compared to just 0.3bn in the US. China’s rapid economic expansion has created a burgeoning middle class, whose tastes have shifted as incomes has risen. Not only does this expanding middle class’s palate now crave things like pork over just vegetables, but also beer.

With this in mind lets run a simple exercise, let’s say as China’s economy develops, its per capita beer intake catches up with its nearby neighbor South Korea at 38.5. This means China’s total beer consumption would rise to 50,050 ML–more than 2x the total US consumption… Taking it one step further, if China’s per capita consumption catches up to that of the US, then China’s total beer consumption could equal that of the rest of the world combined. I won’t event get into what happens if they catchup with the Czech’s, but I hope you have a stockpile!

450px-TsingtaobeerbottleMy point is that the Chinese beer industry’s potential is far from being realized. In fact a recent report by Citigroup pointed out that China’s beer sector has bucked the recent economic slowdown with volumes up near 10% y/y in May. Major players in the domestic Chinese beer market include Tsingtao, Zhujiang, and Yanjing. Tsingtao should stand to benefit quite nicely from increased consumption, based on its strong domestic brand name–I’ve thrown back more than my fair share while living there. Numerous local brewers are also spread out across the country mostly catering to smaller geographical regions; consolidation is inevitable as the industry continues to develops. Potential for brand-name foreign brewers is also off the charts, whether through local acquisitions or other types of investments. I can’t imagine anything will slow this trend down, so just in case here’s how to order a beer in Mandarin:

“Wo yao yi bei píjiu”

In case you need two…

“Wo yao liang bei píjiu”