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Blog - Competition

A new plateau in the Craft Beer Industry – what it potentially means

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According the Brewers Association there are now 3,040 craft brewers in the United States and growing. The Brewers Association also has approximately over 2,000 additional breweries in the planning stages within their database. What stood out most in the announcement from BA was the comment from Bart Watson the chief economics officer regarding the current milestone: “it means that competition continues to increase, and that brewers will need to further differentiate and focus on quality if they are going to succeed in a crowded marketplace.”    Craft Brewing Business

Competition, a good thing?

The benefit of competition is that it forces companies as well as individuals to work harder to achieve better results than their competitors. Competitive advantage is also achieved with cost cutting to make your products more affordable. Consumers win in both of these scenarios, having better beer to drink and possibly paying lower prices. As Michael Porters’ competitive advantage theory suggests, companies can be competitive either by price or offering features that competitors cannot replicate thereby differentiating themselves. In the case of beer this means better tasting beer.

Competition maybe not so good…..for some.

One negative aspect of competition is that it will force some to go out of business. While this invokes Darwin’s theory of, survival of the fittest, it also suggests the growing need for proper financial resources in order for new entrants to survive.

Outlook

Well no one can really see into the future, but one thing is certain and that is change. For good or bad, the only thing that will happen for certain in this industry is change. Hopefully, the goodwill amongst brewers will not turn into an overly aggressive competition for survival, or worst yet, the real possibility of the large brewers acquiring the small local craft brewers, for pennies on the dollar turning good craft beer into “crafty beer” as an attempt to thwart the growing popularity of locally made and enjoyed craft beer.

What do you think!

Cheers,

PubGearUSA



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