Brewing is a process of regulating the interactions between water, starch, yeast, and hops to make beer. Following are the basic steps of brewing:
- A starch source (Grain or barley) is partially germinated or malted and dried. This partial germination allows easy conversion of the grain’s starches into sugars.
- The malted grains are then introduced to water and heat to enable the natural enzymes in the grain to convert its starches into fermentable sugars. It formed the mash.
- The mash is then filtered to remove the solids.
- The remaining liquid is then boiled. Hops can be added either at the beginning of the boil or towards the end based on the type of beer being made. The boiled output is called wort.
- The wort is filtered and cooled to a specific temperature, at which point yeast is added to begin the fermentation process.
- Fermentation can be done in a variety of vessels and can be followed by a period of conditioning (further aging away from dead yeast cells) or secondary fermentation (in bottles, e.g.). The outcome of this fermentation is beer.
Demand Outlook
The global brewing market is expected to be valued at USD 45 billion by 2025 has grown at a CAGR of 7% from 2020 to 2025. The Asia Pacific is the largest geographic segment in the brewing market with a 30% market share. China and India have the largest customer base due to growth in per capita income and the ability to increase the share of wallet towards luxurious lifestyle resulting in a gradual shift of drinking preference towards alcoholic drinks.
Cost Drivers
Malt, hops, yeast is the major ingredients for the brewing process and are key cost drivers of brewing. The industrial brewing cost structure is also driven by packaging cost, marketing cost, and taxes. These three components hold more than 50% of the overall brewing cost.
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