Beer Quarterly Q4 2021: Last Orders for 2021

After a strong Q2 2021, the second half of 2021 saw a more challenging context for global brewers. Like all food & beverage companies, brewers’ sustainability credentials were put under scrutiny as extreme weather conditions revealed the risks of climate change and the latest IPCC report and UN Climate Change Conference of the Parties (COP26) highlight the growing urgency for meaningful action.

Report summary

Inflation also became a rising concern as logistics costs – which were already higher than the prior year – saw a further increase in Q3. In addition, the cost of malt started to increase and hedges ran out.
 
Finally, hard seltzers, which had been the one bright spot for US brewers in the first half of the year, failed to maintain a high growth rate.
 
As we explore in this report, none of these challenges has a simplistic, ‘silver bullet’ solution, but there does seem to be some clear guidance on the path forward in a general sense. Sustainability is a growing concern for all key stakeholders, and brewers must begin to take more assertive actions, and begin to think more creatively about using scope 3 reduction initiatives (curtailing value chain emissions) to build a competitive moat. Moving production closer to the end user, as ABI has done with Stella Artois production in the US, can play a role in reducing emissions, and can also help manage some of the cost inflation pressure that brewers are feeling (giving them a meaningful competitive edge). Finally, while the seltzer slowdown has created concern about top line growth prospects for many brewers, we believe there is still runway for the category to expand.
  • Sudip Sinha

    Senior Analyst - Beverages
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  • Francois Sonneville

    Senior Analyst - Beverages
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  • Jim Watson

    Senior Analyst - Beverages
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