Why Is OEM Beer Gaining Popularity?

OEM beer brewing has become very popular, amply supported by reasons such as cost efficiency and market adaptability. A report from Grand View Research in 2023 said that the global private-label beer market, highly endorsed with OEM beer manufacturing, would see a CAGR of 6.8% in the period 2023-2030. Indeed, this depicts the growing demand for flexible and innovative production models.

Customization is one of the major reasons for its attraction. OEM beer itself allows brands to create unique recipes, develop specific flavor profiles, and adapt packaging in line with consumer preferences. In 2022, one European craft brewery cooperated with an OEM facility to produce its line of fruit-infused beers, capturing 15% of its regional market share within six months. This example shows how customization helps brands carve a distinctive niche in competitive markets.

Cost reduction is another crucial factor that has contributed to the emergence of OEM beers. The average capital investment required to build a brewery is $1 million for small operations and as high as $10 million for larger facilities. OEM providers allow brands to save between 50-70% on infrastructure costs, which they can use for marketing and distribution. A Southeast Asian beverage startup saved US$500,000 in its first year with OEM partnerships and scaled up fast.

It owes this further to efficiency in the production cycles. Most lager styles can have OEM facilities go through the brewing process from mashing to packaging in as little as four weeks. In such facilities, automation enhances the accuracy of production and reduces waste by 20%, according to an industry study conducted in 2023. Consequently, brands enjoy faster time-to-market-a very critical factor in capitalizing on seasonal trends.

The other reason for this demand of OEM BEER is sustainability. Most OEM breweries now have renewable sources of energy, recycling systems for brewing by-products, and water-saving technology. A 2021 case study showed that an OEM brewery reduced its consumption of water by 25 percent, saving it a lot regarding environmental and operational costs. Increasingly, attention also goes to the ecologically-friendly brands, which became an emerging consumer trend.

Adaptability and innovation drive the success of OEM beer, according to Sarah Donovan, senior analyst at Beverage Insights. Her remark underlines how the OEM beer managed to evolve according to the market and consumer trends, like the emergence of non-alcoholic and low-calorie beers. Both non-alcoholic and low-calorie beers have grown 8% in 2022, in the manufacture of which OEM providers were key players.

Brands that depend on OEM beer also can have access to professional expertise and use advanced brewing equipment. For instance, high-efficiency fermentation tanks used by OEM facilities may process up to 30% more volume than other traditional tanks of similar size for increased scalability as brands grow.

This has been further accelerated by a lack of global economic certainty. By reducing upfront investment and operational risks, companies can remain profitable during market downturns. In a report released in 2023, McKinsey noted that companies utilizing OEM production models were 25% more likely to weather financial storms than those dependent on in-house manufacturing.

OEM beer rises due to its cost-effectiveness, adaptability, and sustainability, hence providing a realistic competitive advantage to the businesses in the beverage industry.

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