Humankind records show that one of the oldest beverage in existence to date is beer. Beer can be described as an intoxicating beverage produced by a process called fermentation. There is also an array of types of beers, this dictated by the different methods of preparation, raw materials and flavours included in brewing. The types of beer’s are as follows; ales, lagers, stouts and porters as well as malts.
The consumption of a beer in a local bar begins from the brewery which acquire necessary resources, convert them to the taste akin the type and flavor of beer they produce and finally on how the beer is availed at a liquor store or at the local joint for consumption. However, the commodity chain varies, example as to be used in this contextual analysis is for an ales beer produced in Canada and sold in the US is different for a lager beer sold and produced in the US.
An ales beer from Canada for it to be finally consumed in the US it has to first of all be brewed in its respective brewery, then it has to be approved by the customs regulatory before shipping to the US to ensure that it passes the tests of the product regulatory body in the US, again the firm responsible for the production of the Ales beer may employ advertising to familiarize the probable consumers with their products prior to shipping, after shipping the firm may take up the task or hire out a company for the distribution of its products to retailers and the Ales beer may then find its way to local joints or liquor stores in the US.
The commodity chain for an ales beer as shown is seen to follow stringent as well as long and rigorous processes in order to reach its market in the US. However in comparison for a lager beer manufactured and sold in the US its commodity chain is as follows; input resource assembly in the brewery, advertising of the product to potential customers, distribution of the product in retail stores.
Beer is mainly produced from grains of cereal mainly corn, barley and rice. Other ingredients include starch sources such as cassava, sorghum and millet, brewer’s yeast, flavor such as hops and pure water. This input sources used of preparing beer are mainly natural products obtained from harvesting in farms and some prepared chemically. The process of preparing the ale and a lager are quite similar. (Pinnegar, Michael Alan pn 3,425,839.)
The process of brewing an ale or a lager begins from milling and malting, the milling and malting process involves conversion of a grain cereal by soaking it in water. The next step is lautering and mashing which involves passing hot air in order for the proteins and starches can be broken down by enzymes to form sugar. Whirlpool and boiling then comes in where the sweet wort formed in the initial step is boiled to ensure sterility and to evaporate some water as well as to intensify the colour of the wort, in this step too hops are also added for bitterness before boiling and for aroma and flavor at the end. (Hardwick, William A. pp 87-96)
The wort is then cooled in a heat exchanger to a lower room temperature. Maturation and fermentation of the wort then takes place for it to now graduate into beer which may take a few days. Filtering then terminates the process of beer making in order to be packed and distributed. Ales and lagers are commonly packed into glass bottles as well as kegs for dispensation in pubs and bars.
The ales producer in Canada may be located there due to availability of capital and enticing laws of operating as well as high availability of raw materials to produce the ales. The brewer in US may have chosen the location due to availability of market, legal-political stability and ease in marketing strategies due to their closeness to the market. (Sabell, Charles B., and Oystein D. Fjeldstad p 413)
The distribution step in the commodity of the ales brewer in Canada tends to employ heavier cost functions in terms of the modes of transporting as it is international and employ risky as well as longer routes of transportation. The brewer of lager in the US has fewer risks in the routes of transportation and shorter as well as cheap mode of transportation. Hence, his or her commodity chain is cheaper and has a high flow of availing his or her products as it is shorter.(Caglio, Ariela and Angelo ditillo pp 865-898)
Processes involved in the brewery industry requires professionals in almost all the aspects such as chemists. This springs from the fact that they must have the technical know how of mixing ingredients, knowing the proportion that each ingredient should be of in order to output the final product. Chemists are involved in the initial steps of the brewing process as much as their working conditions are deplorable due to exposure to chemicals they are a highly salary intensive personell in beer making. The distribution process involves a large number of personell it includes marketers, salesmen, drivers, retailers and handy men. The role of marketers being to advertise, the sales men to control the sales of the beer, drivers to avail the beer to the consumer through various modes of transportation, retailers to avail the commodity to the consumer for consumption and the handymen to load, pack and unload the final product. This group takes a relatively larger share of salary due to the huge labour force employed.
Beer is a beverage that is mainly taken as a means of having fun or in marking a celebration. The target market is broadly based as a large number of people indulge in alcohol taking practices. This is evident from the NIA statistic report which shows that up to 86.8 percent of people aged above 18 years have had alcohol and a 56.4 percentage of people reported to have had alcohol before within the past month.(Room, Robin pp 99-113)
Beer manufacturers tend to be very secretive of information relating to the production of their products apart from general information that is not certified of preparing certain brands, specific companies or distillers do not give away their information relating to production of their products. The only information available is their ingredients and where their companies are based.
Externalities involved in the beer industry are legal measures such as price regulatory and ethical practices, product licensing as well as standards compliance by the necessary regulatory body, tax compliance to the government of the country in which the company is based in and consumer protection by various consumer watchdogs and agencies.
Caglio, Ariela, and Angelo Ditillo. “A review and discussion of management control in inter-firm relationships: Achievements and future directions.” Accounting, Organizations and society 33.7 (2008): 865-898
Hardwick, William A. “An overview of beer making.” Handbook of Brewing, Marcel Dekker, USA (1994): 87-96.
Pinnegar, Michael Alan. “Continous beer making process wherein the wort and yeast are separated by a porous partition.” U.S. Patent No. 3,425,839. 4 Feb. 1969.
Room, Robin. “Cultural contingencies of alcoholism: variations between and within nineteenth-century urban ethnic groups in alcohol-related death rates.” Journal of health and social behavior (1968): 99-113
Sabell, Charles B., and Oystein D. Fjeldstad. “Configuring value for competitive advantage: on chains, shops, and networks.” Strategic Management Journal (1986-1998) 19.5 (1998): 413.