New Opportunities Brewing for Ingredient Suppliers

We look at consolidations and the ramifications mergers have on the supply chain. These, in particular, in the beer industry namely the Molson and MillerCoors LLC, and the Anheuser-Busch InBev NV and SABMiller PLC mergers. Large consolidations such as these will strategically tie up ingredient suppliers such as hops and malts making it increasingly more difficult for craft brewers.

Take a look at some details here.

The craft beer industry has been putting considerable pressure on the big brewers. Big brewers have experienced flat to negative growth as a result of the disruptive influence of craft brewers. This has caught our attention.

In particular, there is projected to be a 200 million pound shortage of hops. The big brewers will pay more and obtain longer contracts to secure these supplies. Couple this with more growth from the craft brewing side, the demand and price of hops are destined to go north.