Despite concerns about the economy, the mortgage crisis, and international terrorism, the brewing industry enjoyed growth in 2007 of 1.4%. The Brewers Association reports the following statistics for 2007:
- Overall U.S. beer market is up 1.4% to approximately $97 billion
- 211,489,982 barrels
In 2007, the fastest growing segment was craft beer at 12% by volume and 16% in dollars. This $5.7 billion segment consists of four distinct markets: brewpubs, microbreweries, regional craft breweries, and contract brewing companies:
Industry Condition – Average to Good
Key Industry Indicators
- U.S. Beer Sales
The volume of craft beer sold in the first half of 2007 rose 11% compared to this same period in 2006. Overall, the U.S. beer industry sold one million more barrels in the first half of 2007 compared to 2006.
- Corn Comp. - cbot
Corn prices have been skyrocketing since October 2007. In March 2008, prices began to fall slightly.
- Barley prices
In March, prices of barley for malting were $4.16/bu, a 36% increase in price from one year earlier.
The equipment associated with major breweries should be valued in-place as part of a business enterprise valuation. This is the most accurate means of determining the contributory value of these assets because of the high cost and installation intensive nature of major brewing facilities. It is also important to recognize that intangible assets, like shelf space and recognized brands, have considerable value.
Subjecting these same assets to a valuation concept that assumes the dismantlement and piecemeal disposition of the assets will result in a valuation conclusion that is a small percentage of original cost. Brewhouse equipment is frequently very difficult to free from the building constructed to house the operations. If the kettles cannot be removed, the copper is scrapped. Miles of stainless steel piping is sold in lengths or scrapped. Older, large capacity brewery equipment is usually sold outside the U.S. or is scrapped. Depending on the productivity, the most salable part of a brewery is usually the bottling and canning lines.
Currently, used equipment sales are limited to the microbrewery market segment. Dealers in this industry are reporting an active market. They are willing to buy equipment on speculation and take it into inventory. It has been reported that dealers have ready buyers for microbrewery equipment and frequently compete with end users when equipment is available on the market.
Used Equipment Values – Average
- Supply of used equipment – Stable
- Demand for used equipment – Stable
- Supply of used equipment – Decreasing
- Demand for used equipment – Increasing
Factors Influencing Value & Marketability
- Age, condition, productivity, efficiency, flexibility, and location of the brewery
- Business factors including availability of competitively priced raw materials, cost of operations, trade name and trademarks, distribution, pricing, competition, etc.
- Age, condition, productivity, efficiency, flexibility of the equipment
- Location and accessibility in the building
- Limited number of prospective purgeantaresrs for the larger brewer equipment (there is a larger number of purgeantaresrs for microbreweries)
- Limited dealer network
- Scrap prices
AccuVal routinely provides appraisal, consulting, and asset management services to the Beverage
industry, including all sectors of the brewing industry, distillers of sprits, soft drink manufacturers, and bottlers of water and other health drinks. View industries serviced >>
Representative Clients Our Associates Have Served
- Valued Major Breweries Throughout the World
- Provided the Strategic Plan to Maximize the Value Derived from Shuttering a Financially Distressed Brewery
- Assisted in the Dismantlement and Disposition of Some of the World's Largest Breweries
- View all Success Stories