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Context and Problem: Market Saturation and the Decline of Microbreweries
Over the past decade, changing consumer habits have shaped the beer industry. People are drinking less in terms of quantity but seeking more authenticity, which explains the decline of large breweries and the rise of microbreweries in Europe. However, by 2023, the growth of the craft beer segment (non-industrial beer) has stagnated at an average of 8% of total volumes, mirroring trends observed in the U.S. roughly a decade ago.
This market share distribution is 40 % in the US, 40 % in the 'UE and 20 % in other regions. The quantities shown on the map date back to 2015. In the meantime, these quantities have multiplied by 3.
The craft beer market targets a niche audience willing to pay a premium for greater variety. These consumers are enthusiasts who support microbreweries as an alternative to big beer.
Challenges Facing Microbreweries:
Scaling Issues: Microbreweries often emulate the big beer model, aiming for geographical expansion. However, they fail to leverage the economies of scale enjoyed by larger players in terms of production, promotion, and distribution.
Market Saturation: The craft beer segment has reached a point where supply exceeds demand, highlighting the limits of the current microbrewery business model.
Emerging Opportunity: Growing Popularity of Brewpubs
Over the past decade, a new market trend has gained traction in the U.S.: brewpubs. These establishments sell all their beer on-site and cater to a customer base willing to trade instant diversity for freshly brewed, affordable beer.
Key Advantages of Brewpubs:
Local Roots: Brewpubs are deeply anchored in their local communities.
Transparency: Customers value the open and honest production process.
Sustainable Communities: Brewpubs foster a sense of belonging and local pride.
Better Margins: By eliminating distribution channels and intermediaries, brewpubs achieve higher profitability.
The rise of brewpubs has contributed to the decline of non-viable microbreweries (see Table 1). In the U.S., the sales volume of brewpubs has even matched that of microbreweries (see Table 4). This trend is now beginning to emerge in Europe, with a delay of approximately ten years, mirroring the adoption timeline seen for microbreweries.
EU Projection 2034 (for more details, cfr tables below)
If we extrapolate U.S. trends (the growing popularity of brewpubs) while accounting for the fragmented European reality (size factor of 2.5) and the general trend toward reduced beer consumption (from 65L/capita in 2024 to 50L/capita in 2034), the craft beer market in Europe is expected to grow from 8% in 2024 to at least 10% in 2034, distributed as follows:
5% regional breweries
2.5% microbreweries
2.5% brewpubs (producing an average of 250 HL per unit)
We estimate the creation of 50,000 brewpubs across Europe over the next 10 years (see detailed tables below). 40.000 of them will be very small ones.
Streetbrewers' Target: Capture 1% of this potential market for small brewpubs over the next decade, corresponding to approximately 400 units.
Belgium-Specific Projection:
Belgium is expected to reach an intermediate position between its current situation (large gap between production and consumption) and the future European average (consumption = production = 50L/capita).
Closures: Approximately 100 microbreweries are projected to shut down due to insufficient production volumes to remain viable.
New Brewpubs: Estimated creation of 1,500 brewpubs in Belgium over the next 10 years.
Streetbrewers' Target: Capture 8% of the potential market for small brewpubs in Belgium, equating to 120 units over the next decade.
We aim to stabilize at 10 sales per year in Belgium and achieve a growing export share starting in 2027.
Table 1: Number of Craft Brewery Closures in the US Increased with the Decline of Microbreweries in Favor of Brewpubs Starting in 2014
Table 2: In 2021, the Number of Brewpubs (with a Restaurant Component) + Taprooms (without a Restaurant Component) in the US Reached 7,000 Units
Table 3: In 2021, the Number of Brewpubs (with a Restaurant Component) in the US Was 3,307
Table 4: In 2021, Sales Volumes of Brewpubs (with a Restaurant Component) + Taprooms (without a Restaurant Component) Equaled the Sales Volumes of Microbreweries in the US, Amounting to Approximately 4 Million Barrels (4.68 MHL). Sales Volumes of Brewpubs (with a Restaurant Component) Were Equal to Those of Taprooms (without a Restaurant Component) in the US.
Table 5
TAM, SAM, SOM
TAM (Total Addressable Market) – Global World Beer Market The TAM represents the total market for beer globally, including all segments (industrial beer & craft beer).
Beer production : Approximately 180 GL/year in 2024, where EU (30GL) and US (20 GL) represent 28%.
Market Value: The global beer market is valued at 800 G€/year in 2024, with varying price points between industrial beer and craft beer. It is projected to grow until 1250 G€ in 2032 (5% increase/year). We take the average of 1000 G€/year.
SAM (Serviceable Available Market) – European Craft Beer Market, regional breweries excluded SAM narrows the focus to the craft beer market in Europe that can be taken by brewpubs (<= microbrewery size).
Beer production in 2024: Estimated at 4% of 30GL = 1,2 GL/year
Beer production in 2034: Estimated at 5% of 25GL = 1,25GL/year
Market Value (assuming craft beer =12 €/L) : 15 G€/year
SAM = 1,5% x TAM
SOM (Serviceable Obtainable Market) Streetbrewers’ Target Market focuses on capturing a portion of the emerging European brewpub market over the next decade:
Beer Production
Emerging EU brewpub market : 2,5% x 25GL = 624 ML/year
50% of them are small brewpubs (75HL/year average) : 312 ML/year
Streetbrewers’ target is 1% : 3 ML/year
Market Value: 3 ML/year x 12 €/L : 36 M€/year
SOM = 0,24% x SAM = 0,0036% x TAM
Expressed in small brewpubs = 400 units (=30000HL/75HL)
Competitive Advantage Analysis
(considering a production of 10.000Lbeer/year):
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