The Business of Beer: How And Why You Should Invest In It

By  //  July 5, 2021

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The world’s most famous beverage undoubtedly has to be beer. Served nice and cold, it is a definite party starter for many. But, it is also perfect when you just want to take it easy, relax and refresh.

We reckon the reason why beer is a favorite is that it is so accommodating. Some people only know it to be bitter, but you will be shocked to find out the vast range of flavors it now has. Beer has evolved tremendously over the last few years, and the number of breweries popping up keeps increasing as people master the art of making their own concoctions with a twist. 

Companies that manufacture a different range of flavors have managed to draw the attention of beer lovers, male, female, young and old. Every palate seems catered for; you only need to look at the Wegmans flyers, where the range of beer on sale just tells you how broad and diverse the market is. 

With so many people enjoying this drink, as a businessman or an investor, you may just wonder if it’s an opportunity you may not have considered and should look into.  Let us look at how and why you should invest in the beer business. It might be the perfect kick at the can for you.   

How to invest in beer 

Traditional brewing methods are seen to be purer and palate friendly compared to modern and faster ways of brewing.  Let your primary focus be on craft brewing. Craft brew is practised through traditional-non-mechanized methods of brewing and is mostly independently owned.

The small scale brewers are best known for their enthusiasm and their ability to give beer different flavors. This skill separates them from macro brewers as macros put most of their investment into bitter tasting beer. Craft brewers tend to draw more customers as they are more flexible with flavors, thus catering for a larger audience.  

Due to its popularity, crafting has mainstreamed and has caused small but popular brewers to be bought out by larger brewers. This simply means that larger companies have either bought the craft brewers so that all profits go to macro companies or the crafters have been paid to close down their business.

This clearly shows there is money to be made in this space, and it is a promising investment avenue.  Because demand for craft-brewed beer is already vast, one can either choose to be a brewer or buy themselves in as an investor. It’s not rocket science at all. 

Let’s look at the types of craft brewing companies available.

Craft brewers are classified into four different categories:

■ Regional brewers.  Regional brewers are the largest category.  They make the most use of the traditional brewing methods and have an annual production of about six million barrels.  

■ We also have the Microbreweries, who are the second largest. They have an annual production of less than fifteen thousand barrels and seek their beer offsite. 

■ Thirdly we have the brewpubs.  These have been growing with a steady upward trajectory. They brew the beer and sell it to customers on-site. 

■ Lastly, we have the contract brewery.  As mentioned before, these are bought by larger producers to cut off competition. Other businesses can also hire them on a contract basis. They handle their sales and get assistance on marketing and distribution from the contractor. 

Depending on how deep your pocket or your passion is, you can choose from the options above and make your investment. 

Why invest in beer

Before making any investment, it is imperative for you to know the downside and upside of the business you are investing in. Consider why you’re investing in a brewery. Is there something different you can bring to the table besides capital because there are high chances that someone else is fully engaged capital-wise? 

One of the most significant reasons you should invest in a beer brewery is that the business can tap into something you love doing or something you are good at.

The investment allows you to be hands-on. For example, as an investor, you can help build financial accounting and banking relations or get engaged with the engineering process.

You may also be well suited if you have reliable connections consulting on navigating government approvals and permissions. Through this exercise, you probably will get a deep link with the business and, in turn, a feeling of fulfilment as you are doing something that is personal to you and something that you love. 

As you may know, an investment can be taken as a loan. When you invest, you expect to be paid back with interest in due time. Well, that’s the sweet part of investing in a brewery. 

Brewing a beer happens in a short space of time. This means as soon as beer production starts, it’s as soon as the business begins to cash in.  Thus, it will only take you approximately two to three years to start getting paid for your investment.  Call it quick money if you may, but I say it’s a brilliant investment plan. Quick, steady return in a stable investment portfolio. 

There you have it, how and why to invest in beer.  Don’t let the opportunity pass you by. Bottoms up!