Factors affecting Industry Growth Trends
In attempting to determine future growth for sales, profit etc., there are many factors one could examine. However as brevity is of importance we have decided to use the following;
1.) Social Attitudes
2.) Legislation
3.) Distribution
4.) Competition:
1) Social Attitudes
Currently the business environment for distillers and vintners is strongly influenced by societal attitudes towards drinking and government policies reflect those attitudes. Government Policy objectives are aimed at reducing alcoholism and curbing the amount of under age alcohol consumption. A company such as Brown-Forman seeks to compete strongly in the marketplace and to protect the right of adult consumers to purchase these products.
Within the U.S. and other international markets Brown-Forman works with other distillers and vintners to gain a more favourable political and social environment for the sale of its products. Brown-Forman is a member of the Distilled Vintner's Council and the Wine Institute. Both of these organisations attempt to obtain fair treatment for the company and its consumers. Moreover Brown-Forman seeks to secure beneficial regulatory treatment in foreign markets, including open access to foreign markets for U.S. made spirits and wines.
2.) Legislation
The alcoholic beverage industry is highly sensitive to increases in tax rates. In the U.S., Brown-Forman's largest market, there is no imminent legislation to increase excise taxes, although a future increase cannot be ruled out!
Similarly, while there has been discussion (and legislation introduced) to ban advertising of spirits in the U.S. nothing has come of it. However, most TV networks currently decline to accept advertisements for spirits. Outside the U.S., the alcoholic beverage market is also affected by tax rates and advertising restrictions, but the impact of those policies in any one market is not significant to the company's overall business and advertising.
3).Distribution
At present Brown-Forman do not own any major distribution companies. Therefore it relies on its competitors to distribute its products in different markets. For instance, United Distillers and Vintners distribute Jack Daniel's' and Southern Comfort' in the U.K., while Bacardb Wedistributes Brown-Forman's spirits products in most of continental Europe. However, the current European economy is in a state of flux, with the recent creation of the European Union and the consequent elimination of trading barriers along with the adoption of the Single European Currency, which will be put in motion in the near future. These changes will greatly affect Brown-Forman's business in Europe and will revolutionise distribution of spirits and wine in Europe, which is presently constructed on a country by country basis, by encouraging cross-border sales.
The United States of America has a population of 260 million people. This is a big market with substantial purchasing power. As of 1997, Breckenridge Brewery has only expanded eastwards and the west side of the country is relatively untouched. According to Exhibit 2 in the case study, there were only distributors in 32 states and that leaves a potential to sell to the other 19 states as w...
Businesses wanted to move forward within their industry, so by taking away alcohol they thought it would become more productive.
Economic returns in the global market place have been influenced by trends in wine consumption. Figure 2 shows a trend of decreasing wine consumption from 2007 - 2011 in most old world countries while new world countries were increasing their consumption. This is due to the diversification of alcoholic beverages in the old world countries and the growing wine popularity in the new world
In recent years Anheuser-Busch has faced increased competition in the U.S. market. As a result of this increased competition the company has been looking overseas for growth and increased profits. The American market is a relatively stagnant market for Anheuser-Busch. There is very little growth in America and 94% of Anheuser-Busch’s sales occur inside America (Anheuser-Busch, 1999). Anheuser-Busch also has the resources to compete with any European brew in the European market. In many countries in Europe, Anheuser-Busch has begun to gain some market share and turn some profits. The Amer...
Once people wanted a drink, nothing stopped them. Subsequently, prohibition sparked American ingenuity to step to the forefront. A black market emerged, as brewing beer making wine, and distilling whiskey, became a national past time. Enterprising home brewers could make enough Home brew, Dago Red, Bathtub Gin or Moonshine to quench their thirst and to sell as well. Therefore, stills begin popping up in basements, barns, backrooms, and the deep woods. Both Canada and Mexico were wet, and their border towns offered many opportunities for thirsty Americans to quench their thirst. Ships anchored outside the three-mile limit on both the Atlantic and Pacific coasts, loaded with alcohol becoming floating bars and nightclubs. Additional ships offered cases of alcohol spirits only to the professional rumrunners. Illegal liquor grew to such an extent that enforcement became virtually impossible.
Moonshining is the stuff of legends – from NASCAR greats to the Dukes of Hazzard, from Elliot Ness and Al Capone to bathtub gin and homebrew, stories of Grandpa’s backyard still are still told today. While the truth is often unknown, the stories of moonshine have some kernels of truth at their heart. Though we think of it often in connection with Depression Era Cheep Liqour” the truth is that modern moonshine is experiencing a renaissance – more and more people are interested and experimenting today, and retailers know it.
There has been an ongoing controversy in the United States on whether the drinking age should be lowered to eighteen like most of the world or if it should stay at twenty-one. Underage drinking has been a major controversial issue for years, yet why is it not under control? Teenagers are continuing to buy alcohol with fake identification cards, drink, get into bars, and drink illegally. As a teen I have proof that these things are going on not only in college but in high school as well. There are a lot of factors that come together to why the drinking age should be lowered to eighteen; the most obvious reason is too many people are drinking before they are twenty-one. Liquor stores, bars, and clubs all want to make money and if they can get away with selling to underage teens then they will. A study done by the Academic Search Premier agrees that, ?By now it is obvious that the law has not succeeded in preventing the under-21 group from drinking? (Michael Smith 1).
During 1920 to 1933, the prohibition of did not fix all of the social problems it intended to that occurred because of alcohol. It made the problems worse, crimes rates skyrocketed and people’s morals and ethics went out of the window. Since the prohibition period, then the three-tier system alcohol distribution has been into effect. This system, far from perfect and may not be a hundred percent of the fix to social our problems. However, since 1933 when the three tiered alcohol distribution took effect it has managed to maintain a partial neutral ground and a fine line for beer producers and distributors to follow. Therefore, as you can see without the three-tier system in place, the manufacturing and distribution of alcohol would be chaotic and unorganized in the United States and in other countries.
In the United States from 1920 to 1933 there was a ban on the production and sale of alcoholic beverages, this time was known as prohibition. Prohibition of alcohol was a very controversial topic in the 1920s and because of this there were many varying opinions on it. Some people didn’t like it and bought alcohol illegally while some other groups supported it, even gangs got involved when they heard of the new illegal product on the black market. There were gang battles and political corruption and many other issues. This was the time known as Prohibition in the United States. (wikipedia.org, Prohibition in the United States)
Hard liquor ads on television are equally unconscionable. In June, 1996, Joseph E. Seagrams & Sons Co. broke a 48 year old voluntary ban on advertising hard liquor on television. Five months later, the Distilled Spirits Council of the United States (DISCUS) re-wrote its Code of Good Practice to allow its member distillers to advertise on radio and television. Even if these TV ads are aired only after 9 or 10 PM, they will still reach millions of American children.
Now alcohol is illegal wherever you go in america. Some people in america were smart and found some loopholes in 18th amendment. People who had bought legal alcohol before the ban c...
During the early 1920a and up to the early 1930s the United States of America entered a time that brought forward a series of regulations that prohibited the sale, manufacture and distribution of alcohol in the American territories. Through out history, experts have developed many hypotheses trying to determine the effects brought forward by this prohibition. Furthermore, these experts are also trying to determine whether national prohibition is to be considered a failure or success towards alcohol regulation. The 1920s national prohibition of production and consumerism of alcohol can be considered a national economic and regulation failure that brings forward laws that impact society and international relations today.
In the short space of a generation, the American wine industry has maintained the tradition of boldness, innovation, creativeness, and success. American wineries that have been successful cannot rest on those successes, however. The industry and its competitive forces continue to change and members of the current industry will survive only if they are able to anticipate and deal with these changes. While there are significant threats to the American wine industry, there is also a large domestic and worldwide market of potential consumers who have yet to enjoy the fine taste of America’s wines.
When initially analyzing the Old World Wine Industry versus the New World Wine Industry, the differences are evident. Strong representations of this include factors such as size, production methods, brand equity, and production orientation. Through conducting an analysis using Porter’s Five Forces, one can clearly see the clear delineating factors between the Old and New World.
However, shipping liquor would be tricky because of the current regulations involving alcohol content. Novellino (2011) reveals that Boreth who has successfully ventured into this business faced similar challenges.