The Satellite Review Magazine The Satellite Review Magazine Vol 2 | Page 10

Consolidation
In the beer
Industry
Why distributors should automate to do more with less
By Aaron Corcoran

Account Executive, Westfalia Technologies, Inc.

F

ew industries are as heavily dominated by just a
handful of players as the beer industry. A June 2015
report from Bank of America Merrill Lynch revealed
that four companies – Anheuser-Busch InBev, SABMiller,
Heineken, and Carlsberg – control almost three-fourths of
the industry’s $33 billion profits. The primary reason for
this lop-sided percentage is recent upstream consolidation.
Consolidation among the largest beer producers and the
growing popularity of craft breweries have been the two
most significant changes in upstream markets.
Over the last 10 years, brewery mergers and acquisitions
have occurred left and right. The boom of craft beer has
attributed to this trend, as the “Big Four” are hungry to
swallow up smaller, yet popular, breweries. According to
IBISWorld, “The construction of new facilities and increasing acquisition activity are both projected to intensify over
the next five years.” Add in the effects of the economic
recession and the growing competition with the wine and
spirits markets, and it is no surprise that the beer industry
has become even more condensed.
However, brewery mergers and acquisitions are placing a
strain on beer distributors. These organizations now face
the task of managing ever-changing warehouses, along with

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The Satellite Review

handling new SKUs due to growing product lines. On the
surface, it may seem that more real estate and more physical
growth mean greater profit margins. But, that is not always
the case. Instead of focusing on brick-and-mortar growth in
the time of acquisitions, beer distributors should invest in
warehouse automation technology. With warehouse automation technology, beer distributors can support profitable
growth by optimizing their existing space and “doing more”
with less.
In fact, larger distributors even optimize delivery routes
using computerized software and have invested in new, fully
robotic case-picking technology known as automat