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Beer_Win_and Spirits

Beer_Win_and Spirits - INDUSTRY PROFILE Beer Wine and...

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INDUSTRY PROFILE Beer, Wine, and Spirits Distributorships QUARTERLY UPDATE 7/6/2009 SIC CODES: 5181, 5182 NAICS CODES: 4248 Industry Overview The US beer, wine, and spirits distribution industry includes about 5,000 companies with combined annual revenue of about $100 billion. Major companies include The Charmer Sunbelt Group, Glazer's Wholesale Drug, National Wine & Spirits, and Southern Wine & Spirits of America. The beer wholesale industry is fragmented : the top 50 companies account for about a third of industry revenue. The wine and spirits wholesale industry is concentrated : the top 50 companies account for more than 70 percent of industry revenue. Suppliers and customers of beer, wine, and spirits distributors are covered in separate profiles for Breweries, Distillers, Wineries, and Beer, Wine, and Liquor Stores. COMPETITIVE LANDSCAPE Demand is driven by consumer preferences in alcohol consumption and demographic trends . The profitability of individual companies depends on effective sales operations and maintaining low operating costs. Large companies have advantages in exclusive distribution rights in large markets. Small operations can compete effectively by distributing rare and expensive products. The industry is capital-intensive: average annual revenue per employee is about $450,000 for beer wholesalers and $700,000 for wine and distilled spirits wholesalers. PRODUCTS, OPERATIONS & TECHNOLOGY Major products are beer , wine , and distilled spirits (hard liquor). Distributors tend to specialize in either beer or wine and spirits. About half of overall industry revenue comes from the sale of beer, 30 percent from liquor, and 20 percent from wine. Most alcoholic beverages sold in the US move through a federally mandated three-tier distribution system. Producers or importers must sell to distributors , who then sell the product to retailers . There are a few notable exceptions: some states allow small brewpubs to distribute their own beer, and many states allow wineries to ship directly to consumers. Thirty-two states are license states that allow private industry to manage the distribution and sale of distilled spirits. The remaining 18 are control states that solely manage the wholesaling of liquor as a state-run enterprise. Many of these control states also regulate the retail side of the spirits business, only selling alcohol in state-run stores. The distributor industry buys from a variety of domestic suppliers : about 5,000 commercial wineries; 400 breweries; 1,400 microbreweries; and 80 liquor distillers. A few large producers dominate, such as Anheuser-Busch, Miller Brewing, Molson Coors, E&J Gallo, Constellation Brands, and The Wine Group. Many large producers have acquired or allied with international suppliers. Major importers include Heineken USA, Anheuser-Busch, Miller Brewing, Molson Coors, and Diageo.
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