Beer — it’s been a staple in many cultures for thousands of years and is still one of the world’s most popular drinks. In fact, global beer consumption stood at approximately 192.1 million kiloliters in 2022, up 2.9% from 2021. From paddock to pint, an intricate set of systems and processes are undertaken to place that frothy cold brew in your hand.
Each link in the beer supply chain comes with its issues and challenges. Post pandemic, evolving pressures and rising costs have disrupted the beer supply chain in 2025 and beyond. Beer supply chains will need to be flexible to adapt and survive the changes and challenges ahead.
In particular, recent high inflation has affected the costs of beer production in two linked ways. Across Australia, the UK, and the US, the rising cost of beer is a direct consequence of escalating inflation, compounded by alcohol duty adjustments. Australia, with its twice-yearly, inflation-linked excise increases, now sees nearly 50% of a beer slab's price attributed to federal taxes. Recent data from CGA by NIQ reveals that the average price of a 425ml glass of beer has surged 6.2% in the past year alone. The Australian government has also recently implemented a temporary freeze on excise tax increases for draught beer in pubs and clubs, acknowledging the strain on the hospitality sector. In the UK, a government freeze on alcohol duties had kept price rises somewhat at bay, but these were removed in February 2025 with a significant package of duties rolled out, pushing prices up again. And in the US, increased production costs due to inflation are universally driving prices upward.
What is the beer supply chain?
The beer supply chain is a system of crucial steps taken from recipe conception through to production, brewing, bottling and delivery to the consumer. This journey from the field to the fridge includes sourcing essential raw materials such as malt, hops, and yeast, along with the people, production activities, information, and resources involved in getting a beer into the hands of your customers.
Complex beer supply chains involve multiple channel members including growers, brewers, distributors, and retailers. Contemporary supply chains are based on the direct-to-consumer model made possible through the growth in eCommerce.
- Read more: Brewery software that shows you everything
How does the beer supply chain work?
Beer, like any other product, follows the rule of supply and demand, but the brewing process can be complicated, and so too the beer supply chain.
Stages of the Beer Supply chain
It starts first with the raw ingredients needed for production and packaging and stops when the beer is delivered to the end user. This could be home delivery of a carton from an online order or when the barman pours a pint for a pub patron.
Building environmental issues threaten the supply chain of beer
Raw materials
Raw materials include essentials such as water, malt, hops, and yeast. Additional ingredients like coffee beans, spices, and sugar are also used for innovations and twists on the traditional brew.
In the 2023/2024 crop year, 150.97 million metric tons of barley were produced globally. . Roughly 70% of that was used as animal feed while the other 30% was used to produce malt for the brewing of beer.
The beer supply chain is experiencing a notable shift in hops production, with a decrease in demand directly linked to evolving consumer habits. As global alcohol consumption trends downwards, a pattern observed since the mid-2000s, the ripple effect reaches hop growers. This decline in demand is reflected in the US hop market, where acreage has contracted by a significant 18%. This adjustment signals a necessary recalibration within the industry, as suppliers adapt to a changing landscape of consumer preferences and reduced overall beer production.
Production
Beer production has always been labour-intensive, particularly in the smaller craft and boutique breweries. Though in 2024, the Brewer’s Association (US) reported a -2% decline in craft beer production, up from a -1% decline in 2023.
Overall the cost of beer production has risen significantly: inflation is the primary driver, impacting ingredient costs like hops, barley, and malt, and compounded by war in Ukraine, one of the world’s largest grain producers. Packaging costs, particularly for aluminum and glass, have also surged. The energy-intensive brewing process also faces increased electricity, gas, and transportation expenses - while labour costs are also up as breweries offer competitive wages.
SaaS inventory software offers brewers real-time solutions to improve the efficiency of brew production. These tools link forecasts to production schedules and supplier contracts, providing complete and detailed insights to track ingredients and expiry dates, and offer analytics to predict seasonal demand fluctuations.
Software solutions replace manual methods of inventory tracking to provide access to better management tools and accurate financial data. Implementing basic automation into brewery operations can reduce labour and improve product consistency.
Simple automation reduces manual tasks like checking temperatures using single input computer chips and a single output cooling valve. More complex well-designed automation systems are extremely flexible, enabling brewers to make changes and easily program new recipes.
- Learn more: The benefits of Unleashed for craft breweries
The rise of non-alcoholic beer production
The evolving landscape of the beer supply chain also reflects the growing popularity of no- and low-alcohol (NOLO) beverages. As consumer interest in healthier lifestyles and mindful drinking increases, the NOLO sector is experiencing significant growth. This trend is influencing beer production, with breweries diversifying their offerings to include NOLO options. The NOLO market presents both challenges and opportunities for the supply chain, requiring adjustments in ingredient sourcing, brewing processes, and marketing strategies.
One particular benefit for brewers of the NOLO trend is it allows for greater margins on products as they attract lower (or no) excise tax or duties. Tempering that is the fact that producing genuinely zero alcohol beers can be technically difficult, with higher costs in general.
As the craft beer industry grows, the beer packaging market grows too
Packaging
Beer packaging is the part of the beer supply chain that involves the bottling and labelling of bottles, PETs, cases, and kegs. In 2023, the beer packaging distribution was 4.1% aluminum cans, 26.9% glass bottles, and 8.9% draft. Imported beer remains predominantly packaged in glass bottles, with 55% of imported beer volume.
However, the many benefits of glass mean that glass packaging is expected to have the largest market share of the industry moving forward. Glass is reusable, recyclable, and it keeps beer fresher for longer compared to other packaging materials. Glass is also a good insulator which keeps beer colder much longer than any other type of single-use packaging. Additionally, glass reduces the risk of spoilage because it has a zero rate of chemical interaction with other products, and amber glass beer bottles prevent light from entering the bottle.
The beer packaging market is competitive and appears to be fragmented. Suppliers are competing on price, capacity, volume, and quality. The popularity and demand for original packaging solutions – especially those with eco-friendly credentials – is expected to continue therefore technological innovation is likely to impact the market considerably.
In the UK, the recent announcement of increased UK EPR packaging fees will add up to 12p per unit with wine, spirit and beer bottles all affected. And a Deposit Return Scheme (DRS) for drinks containers in the UK is scheduled to launch on October 1, 2027. The DRS is designed to greatly increase recycling rates by adding a small reward for the return of containers – and while it’s intended to be cost-neutral for producers, does add some minor accounting complexity, and administrative responsibilities.
In 2024 a noted beer trend in the US was premiumisation and limited edition packaging.
Dispatch
Beer supply chains need to be supported by efficient shipping and logistics. Batch tracking using brewery software tools enables product monitoring to determine the status of all inbound and outbound deliveries to the warehouse – which ensures timely deliveries and customer stock replenishment.
Automation is revolutionising the beer supply chain through automatic storage and retrieval systems that improve warehousing and dispatch efficiency. With the addition of brewery software, brewers can account for all materials and shipping costs to ensure products are accurately priced to maximise revenue.
Distributors and retailers have had to adjust the way they sell beer through the different stages of lockdown
Distribution
Distribution covers a wide range of activities and a variety of supply chain participants. Quality auditing, marketing, training, and food pairing are all distribution activities. Participants in the beer supply chain vary from wholesalers to retailers, restaurants, bottle stores, pubs and clubs.
Distribution and supply are vulnerable to an unpredictable customer and ever-changing preferences. Take for example the increased demand for beers with fewer calories and lower ABV that is expected to be high in flavour and with food-pairing compatibility.
E-commerce has opened up more distribution channels for the beer market, creating new ways to reach customers and grow brand loyalty, which was sped up by the Covid-19 pandemic. Online stores and delivery services are making it easier for consumers to access products from home and get more craft alcohol options.
- Read More: Unleashed included in Software Advice's 2020 Top Supply Chain Management and Logistics Software Report
What is the Beer Game in brewing supply chain management?
The Beer Game teaches supply chain principles using a role-play simulation throughout all stages of the beer supply chain. It demonstrates how problems arise due to a lack of information sharing and uncoordinated processes.
The Beer Game simulates a four-stage beer supply chain (manufacturer, distributor, supplier, retailer) where participants manage inventory and fulfill customer orders over 24 rounds, aiming to minimize costs from backorders and excess inventory. Competing to meet customer demand at the lowest cost, and dealing with two-week communication and delivery delays, players typically experience the "bullwhip effect", even when perfect information is available.
In the context of brewing, it highlights the challenges of forecasting demand for volatile products like craft beers or seasonal brews - while understanding its principles allows brewers and suppliers to implement better communication and information sharing, ultimately optimizing inventory management and reducing waste in a dynamic and often unpredictable market.
Common challenges in the beer supply chain
- The bullwhip effect: The bullwhip effect is a distribution channel event that refers to shifts in inventory stock levels due to changes in consumer demand. Demand forecasts succumb to supply chain inefficiencies the further you move up the supply chain.
- Rising costs and brewery closures: 2025 figures from the Independent Society of Breweries and Associates show that the UK has 100 fewer breweries in total as of January 2025 compared to January 2024. This is despite reports of strong demand for beer from independent breweries.
- Engaging non-beer drinkers - As mentioned earlier, the demand for alcohol beers is on the rise, as is the number of non-drinkers. Beer creators must find other ways to keep their audience engaged.
- Environmental challenges: The brewing industry has a significant environmental footprint, which includes high water usage, energy consumption, and carbon emissions. In fact, Incoming water to a brewery can range from 4 to 16 barrels of water per barrel of beer (see source)
How to reduce waste in the beer supply chain
Reducing waste in the beer supply chain is essential to cutting costs, and improving profit margins and overall operational efficiency. Brewery software solutions are key in helping to reduce waste and boost profitability.
Both the raw ingredients and the finished product of beer brewing are perishable goods. By implementing brewery software systems, brewers can reduce spoilage waste by monitoring production, inventory stock, sales, and raw materials. Brewery software provides real-time data to identify batch lots and use-by dates well in advance of spoilage occurring.
There are also other methods to reduce waste in the brewing industry, from switching to eco-friendly cleaning products, to improving ventilation systems and investing in green energy.
Blockchain and the beer supply chain
Consumers are increasingly interested in knowing the origin or source of raw materials, and the ethical footprint and sustainability of products they buy. This is particularly true of craft beer enthusiasts.
Blockchain technology allows consumers to trace information about where the barley in their brew is grown, reaped, and malted. This end-to-end view of the supply chain is achieved by simply scanning a QR code on a pack of beer.
In 2020 AB InBev introduced blockchain trails to collect data and provide information to customers and also help guide agricultural development such as improving the growers’ barley yields and environmental footprint.
Blockchain brewery software provides a decentralised platform to enhance traceability and gain valuable data on raw ingredients. Not-for-profit Fairfood uses blockchain technology to trace food items to their source, enabling farmers to gain fairer prices and employees better wages. The technology also enhances billing transparency through public transparency of transactions, expediting the flow of capital and maintaining security.
Other technology and the beer supply chain
Brewery software technology enables the brewing process to be connected along the entire supply chain – from concept to sales and financial reporting – using digitally linked hardware and brewery software systems.
Monitoring and understanding exactly when and how much of any ingredient will be available is critical for microbreweries. The use of artificial intelligence and analytics is predicted to rise because it can track, examine, and interpret relevant information to minimise the overall cost of beer production.
The future of the beer supply chain
Technology, pandemics, climate change and consumer demand preferences have all impacted beer supply chains. Predictions for 2024 – and even beyond – suggest that these trends will be ongoing:
- Brewery software and smart technologies will continue to evolve and implemented to improve brewing processes, inventory control, quality control and delivery
- The number of brewery brands able to get completely involved in distribution and retail will decrease. This will contribute to buyouts, strategic partnerships, and increased competition
- The preference toward low-alcohol beverages from health-conscious consumers is growing and the sales of no- or low-alcohol beers will rise with the introduction of more choices and better-tasting options
- Beer Brands becoming more eco-friendly - According to the research conducted by McKinsey & Company and NIQ, products that have centred sustainability as part of their strategy averaged 28 percent cumulative growth over the past five-year period.
