Brewery Industry Challenges Today
If you rewind back to March of 2020, the sky was falling on the brewing industry. Since then, breweries have come a long way. Unfortunately, there are still some challenges the industry faces today.
The Brewery Supply Chain
Supply chain challenges are top of mind for everyone. The beer supply chain is a system of crucial steps taken from recipe to conception through production, brewing, bottling, and delivery to consumers. This includes sourcing raw materials such as malt, hops, and yeast.
For busy breweries with high demand and a long list of orders, production staff need to work as efficiently as possible. Every time you finish a batch, you should be prepared to start the next one. But what happens when you don’t have the right ingredients or packing materials? Production is delayed, revenue is lost, you have unhappy customers, and have to pay extra to get the materials you need. Unfortunately, when the cost of ingredients and packaging are already rising, the extra cost can have a big impact on the bottom line.
The beer industry is experiencing a scarcity of hops due to adverse weather, brush fires, and other environmental events. With rising temperature reducing soil moisture and droughts exacerbating water shortages, climate change poses a real threat to the availability of raw materials of the beer supply chain.
In terms of packaging, the increase in demand for craft beers has led to corresponding growth in the beer packaging market. Beer packaging involves the bottling and labeling of bottles, cases, and kegs. Suppliers are competing on price, capacity, volume, and quantity that is likely to impact the market considerably.
Shortages are everywhere. From aluminum cans, to gran prices rising, to equipment lead times ballooning, the supply chain is hitting breweries from all angles. Most can be overcome with proper lead times or partnering with a neighboring brewery or co-op or a slight and mostly temporary price increase . While dealing with ingredient shortages, skyrocketing prices, and ongoing supplier issues, breweries have one goal in mind- keep production on track without impacting margins.
Brewery Real Estate Challenges
If you are looking for a location right now, this might be news for you- finding a space is hard. This has led to lots of decisions about leasing, buying, size of the brewery, and a number of other factors influencing location. The age of brewery and location affects one of the biggest trends: COVID restrictions. In different states of the country, people are able to do different things with their breweries. Places like Florida are wide open, where other places in the country have you jumping through hoops to sell your beer in the taproom. Though these issues are expected to be temporary, a few steps can help you achieve your greatest success this year: first, you need to know your numbers, track your data, and be able to make decisions with solid information influencing each step.
Environmental Impacts For Breweries
An issue of concern to many breweries relates to the importance of maintaining clean water supplies. Many craft beers require the use of water containing specific mineral combinations. Every gallon of craft beer results in up to seven gallons of water during the production process. Environmental disasters that threaten the purity of drinking water in a particular location can potentially heavily impact nearby brewing businesses.
Brewery Brand Loyalty
Consumers in today’s market enjoy casually sampling different beers. A certain percentage of customers do not have long-term loyalty towards specific products. While customers may express a strong preference for Budweiser, Miller, or Coors brands, most craft brewery customers prefer to sample products from a cross-section of breweries. This tendency places a need upon small breweries to introduce trendy new products to local markets.
Even with all of these challenges, there is a light at the end of the tunnel for breweries. Due to technological advances, there are tools and systems that can and should be utilized to help your brewery run efficiently. Some of the biggest advancements are hardware related and give you the ability to track inventory as well as access valuable information that can help you save time and money. To learn how GoTab’s technology can help your brewery, visit https://gotab.io/en/best-brewery-pos-system/
Sources
Tap Room Playbook Episode 2:
When you really think about it, with everything managers need to do in a tap room, the hospitality aspect is often overlooked.
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Tap Room Playbook Episode 3:
The best breweries pay attention to what their brand stands for. How do the best brewers bring their brand to life?
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