Essay about A Global Alcohol Industry

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Pages: 21
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doi:10.1111/j.1360-0443.2008.02430.x

The global alcohol industry: an overview
David H. Jernigan
Department of Health, Behavior and Society, Johns Hopkins Bloomberg School of Public Health, Baltimore, MD, USA

ABSTRACT Aims To describe the globalized sector of the alcoholic beverage industry, including its size, principal actors and activities. Methods Market research firms and business journalism are the primary sources for information about the global alcohol industry, and are used to profile the size and membership of the three main industry sectors of beer, distilled spirits and wine. Findings Branded alcoholic beverages are approximately 38% of recorded alcohol consumption world-wide. Producers of these beverages tend to …show more content…
However, national markets for alcohol are generally led by these globalized alcoholic beverages, brands that have regional or global marketing campaigns and attendant identities [5]. Within this globalized sector, a few large companies dominate. The 26 largest alcoholic beverage companies had a total net revenue/turnover of $155 billion in 2005, and a total operating profit of $26 billion [6]. The 10 largest alcoholic beverage marketers accounted for 48% of sales (by volume) of globalized brands in 2005. All 10 of these are beer companies. Together, they also accounted for 66% of production of globalized beer. Ranking the global alcohol companies by net revenue/ turnover rather than by volume shows the value of distilled spirits relative to beer on the global market. The

leading company in terms of net revenue/turnover in 2005 was Diageo plc, followed by Heineken NV, InBev, SABMiller and Anheuser-Busch, Inc. [6]. Globalization in the alcoholic beverage industry tends to lead to greater concentration of ownership and greater dependence on marketing. As a recent study of multinational survival in the global alcohol industry concluded, ‘. . . in non-science-based industries such as alcoholic beverages, . . . brands and marketing knowledge rather than technological innovation are central in explaining the growth and survival of multinational firms’ [7]. Over the past 30 years the global beer industry has become much more concentrated, as
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