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Growing Competition in the Brewery Market


This graph from Chartr lends itself well for a discussion on what this chart does and doesn't tell us about competition in the Brewery industry. The article highlights the intense competition and the evolving tastes of consumers in the American brewing industry. The number of breweries in the U.S. has risen dramatically over the past decade to over 9,700 by 2022, more than three times what it was ten years ago. However, the Brewers Association anticipates that 2023 will see the fewest brewery openings in over a decade, suggesting that the industry may be reaching its saturation point.

The article uses the example of Anchor Brewing Company, the nation's oldest craft brewery, which is currently in financial trouble due to a mix of challenges. These include the lingering impacts of the pandemic, from which the company hasn't fully recovered, increased competition, and inflation. Further complicating the situation is the evolving preferences of consumers, who are increasingly shifting towards non-alcoholic beverages, such as kombucha, and spirits.


The brewery's struggles demonstrate the potential consequences of this over-saturated market, as well as the difficulties of adapting to changing consumer tastes and dealing with post-pandemic economic conditions. The company is currently trying to secure enough funding to continue operations as a cooperative, reflecting the extent of its financial difficulties. Possible Questions:

Comprehension

1. What are the three main challenges Anchor Brewing Company cites for its current financial woes?

2. What trend does the Brewers Association forecast for 2023?

3. Which substitutes for beer have risen in popularity?


Vocabulary

1. How does the word 'impending' differ from 'upcoming'?

2. How is the word 'frenzy' used in the context of the California Gold Rush?

3. What does the term 'catastrophic' refer to in relation to the 1906 earthquake?

4. Can you explain what 'prohibition' means?

5. What does the word 'overstate' mean in the phrase 'hard to overstate'?

6. What does 'ubiquitous' mean as used in this context?

7. What is a 'co-op'?

8. How does the word 'shifting' in 'shifting tastes and preferences' differ from 'fluctuating'?


Quantitative

1. If the number of breweries in 2022 was over three times the number from a decade ago, what was the maximum number of breweries in existence in the U.S. a decade earlier?

2. True or false: From the graph, we can say that the total number of breweries has had both periods of increase and decrease since 1933? Explain your answer

3. From the graph, what was the approximate % change in historical US brewery count from 2000 to 2022


Discussion questions

1. From the graph, what can and can't we conclude about market share?

2. What assumptions would we have to make to conclude that the market structure has changed?

3. How do economies and diseconomies of scale relate to these changes?

4. Would you expect firms in this market to have become more or less profitable? What assumptions have you made in forming this position? 5. Research Prohibition Era. To what extent was prohibition an example of 'government failure'?



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