{"id":10358,"date":"2022-08-04T08:46:27","date_gmt":"2022-08-04T15:46:27","guid":{"rendered":"https:\/\/www.qad.com\/blog\/?p=10358"},"modified":"2022-08-04T08:50:04","modified_gmt":"2022-08-04T15:50:04","slug":"brewer-supplier-relationships-in-a-changing-beer-industry","status":"publish","type":"post","link":"https:\/\/www.qad.com\/blog\/2022\/08\/brewer-supplier-relationships-in-a-changing-beer-industry","title":{"rendered":"Brewer Supplier Relationships in a Changing Beer Industry"},"content":{"rendered":"

[vc_row][vc_column][vc_single_image image=”10359″ img_size=”full”][vc_column_text]One of my favorite movies is Robin Hood: Prince of Thieves. It was a drama that had some very comedic moments. In one segment, Robin Hood had a not too friendly run in with Friar Tuck. After a slight skirmish, he convinced him to join his merry band to impart some spiritual guidance. Now as it turned out, the friar had an even greater love than the divine. In a scene where he is teaching a group of youngsters, Tuck puts his hand in a bag of grain to discuss its many uses and says, \u201cLet us give praise to our maker and glory to his bounty by learning about\u2026.Beer!\u201d<\/span><\/p>\n

I am guessing one of Friar Tuck\u2019s favorite days of the year is August 5, which is <\/span>International Beer Day<\/span><\/a>. And, as I live not too far from the self proclaimed town of \u201cBeer City USA\u201d (Grand Rapids, Michigan), I figured a discussion on the beer industry today and its supply chain might be appropriate.<\/span><\/p>\n

Disruption in the Beer Industry\u00a0<\/span><\/h2>\n

The beer industry has been around for awhile \u2014 somewhere in the neighborhood of 8,000 years, give or take. In doing some vast research about this industry, I am thinking that the reason the wheel was invented was to move barrels of beer around with greater ease. But all kidding aside about that and Friar Tuck, the beer industry today is actually quite interesting and experiencing a wide range of changes and disruption.<\/span><\/p>\n

Over the last five or so years, the consumer packaged goods industry, which includes edible and non-edible products, has undergone a transformation due to rapidly <\/span>changing consumer preferences<\/span><\/a>. You can look at many categories of products, especially those in <\/span>food and beverage<\/span><\/a>, and see a proliferation of product choices like we have never seen before. I remember years ago growing up and drinking cranberry juice. Plain cranberry juice. Today, there is Cran-Grape, Cran-Peach, Cran-Orange, Cran-Apple, and the list goes on (I am waiting for the Cran-Mac-n-Cheese). Many products, including those in the beer industry, are going through the same transformation.\u00a0<\/span><\/p>\n

For years, and this spans the international market as well, several \u201cbig\u201d brewers owned a large share of a national market in many countries and also had international distribution, with only a select group of smaller brewers in the industry. But then, a change occurred that has impacted the entire alcoholic beverage industry. Twists to the traditional wines, spirits and beer products began. It is like the chicken and the egg story. Either makers of these spirits were experimenting or the consumer market drove new takes on alcoholic beverages like flavored vodkas, whiskeys, etc. In fact, the flavor additions happened across all markets.<\/span><\/p>\n

The beer industry saw the explosion of the craft brewer and the loosening of regulations in countries like Canada and others that made it easier for people in other regions, provinces and states of many countries to have the ability to purchase beer they were never able to buy. Then, of course, the hard seltzer category appeared, which directly affected the sales of beer.<\/span><\/p>\n

The Changing Market Landscape for Alcoholic Beverages<\/span><\/h2>\n

So here we are almost 10,000 years into the world of beer with an amazing amount of change and disruption. Many producers of beer do not traditionally think of themselves as true manufacturers. They are artisans, crafters, vintners, distillers, etc. However, to compete today successfully and to sustain as a business, they must act, perform and think as a manufacturer while keeping the traditions and standards of the \u201cBrewer\u201d intact. The issues they face today up and down the supply chain are the same issues most manufacturers are facing today. What used to be a relatively small and consistent source of suppliers now has to grow due to the supply chain disruption and environmental conditions. The \u201cgood ole\u2019 boy\u201d days of handshakes are over and communication with suppliers needs to be more formal as well as tighter due to changing regulations of <\/span>traceability<\/span><\/a>.<\/span><\/p>\n

Supply chain issues are dramatically impacting the brewing industry. Shortages of key materials are everywhere. The key ingredients of beer such as grains, hops and packaging are now more expensive than ever and scarce. Lead times for critical production equipment have increased. Transportation challenges have impacted all industries but especially the brewing industry. Add in the drive for sustainable packaging, traceability and product freshness, you have a nightmare. COVID-19 had a tremendous impact on almost all areas of the brewing industry. Delays in ingredient supply, production, distribution restrictions and retail closures of government-controlled stores that sold alcoholic products changed the industry. COVID-19 is still having lingering effects.\u00a0<\/span><\/p>\n

The environment is also playing a huge role in the industry. Droughts, climate change and fires impacted the ability of the agriculture industry to supply the necessary ingredients to the industry. Many types of beers and ales require ingredients only able to be grown in certain world regions, and this has altered the market due to supply chain disruptions. The industry is experimenting with new technology such as <\/span>vertical farming<\/span><\/a> to offset the problems.<\/span><\/p>\n

A Crossroads for Brewers<\/span><\/h2>\n

The brewing industry is facing a crossroads in a way that will shape the next thousand years of history. As consumers continue to look for new and innovative products and an expanding value chain to get those products, manufacturers of beer can sustain and expand at the same time. Adapting to change and implementing the processes, philosophies and systems to help manage the entire supply chain from farm to bottle will be critical.\u00a0<\/span><\/p>\n

Optimizing <\/span>brewer supplier relationships<\/span><\/a> through automated processes is a good start to managing all that goes into growing and maintaining a brewer supply network. Managing production facilities with all the new proliferation of products to maintain production efficiencies and minimize costs is another area that needs to be optimized. And finally, as the value chain increases and the supply chains of all industries expand, brewers need to continually manage their entire <\/span>supply chain network design<\/span> and all the disciplines of <\/span>supply chain management<\/span><\/a>.\u00a0<\/span><\/p>\n

It is a daunting challenge but a few thousand years of success should keep Friar Tuck and other connoisseurs of the brewed drink in high spirits on International Beer Day and beyond.<\/span>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":"

[vc_row][vc_column][vc_single_image image=”10359″ img_size=”full”][vc_column_text]One of my favorite movies is Robin Hood: Prince of Thieves. It was a drama that had some very comedic moments. In one segment, Robin Hood had a not too friendly run in with Friar Tuck. After a slight skirmish, he convinced him to join his merry band to impart some spiritual guidance. […]<\/p>\n","protected":false},"author":35,"featured_media":10359,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[182,2045],"tags":[2282,2280,2281,2286,2285,2284,697,142,2283,1696,1598],"class_list":["post-10358","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-supply-chain-trends","tag-alcoholic-beverages","tag-beer","tag-beer-industry","tag-brewer-supplier-relationships","tag-brewing-industry","tag-craft-brewer","tag-disruption","tag-food-and-beverage","tag-international-beer-day","tag-supplier-relationship-management","tag-supply-chain-disruption"],"yoast_head":"\nBrewer Supplier Relationships in a Changing Beer Industry | QAD Blog<\/title>\n<meta name=\"description\" content=\"Supply chain issues are dramatically impacting the beer industry. 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