Miller Lite outshines US beer gloom
Europe, said a solid performance from Miller Lite also helped it to
hold off the black clouds hovering over America's beer sector,
despite warning of tough trading ahead, reports Chris
Mercer.
SAB's US sales increased by 2.4 per cent to $4.89 billion (€3.87 billion) for the year ended 31 March thanks to higher marketing investment and a good rearguard action from Miller Lite.
The firm followed rival Anheuser Busch in citing difficult trading conditions on the US market, in particular the rising popularity of wine and spirits against beer, and rising consumer fuel costs that decreased disposable incomes.
Yet, Miller Lite was named the fastest growing beer brand in US supermarkets over the last year by AC Nielsen, despite a slow-down in the second half.
And its resilience in a fairly stagnant US beer market may offer a new glimmer of hope to big brewers who have fallen on hard times.
'Lite' and low-carb beer products are giving the sector renewed strength, according to market research group Datamonitor, which said its study in 2003 revealed that about half of Americans were attempting to limit their carbohydrate intake.
Datamonitor also said that an increase in the number of women beer drinkers in the US, accounting for around 30 per cent of beer volumes, could propel lite and low-carb products forward.
SAB said it expected Miller Lite sales to slow in 2005, though continue to grow, and that it would spend more to overhaul disappointing results for Miller Genuine Draft.
The firm said competition would likely be more intense in the US over the next few months after market leader Anheuser Busch reduced its annual price increase.
SAB's domestic beer sales to wholesalers crept up by 0.7 per cent over the year, yet Anheuser said its sales to wholesalers dropped 2.4 per cent in the first quarter of 2005.
US domestic beer sales only rose by 0.5 per cent across the whole industry in 2004, according to the Brewers Association of America.
Lucky for SAB that its other markets have continued to deliver the goods.
South Africa performed particularly well as margins were helped by a consumer trend towards premium products. Company subsidiary Beer South Africa saw 50 per cent growth in this segment and also rose to lead the fruit alcoholic drinks category.
In Europe, SAB re-iterated its half-year statement that volume growth in Russia, Romania and Poland had more than offset declines elsewhere in other local markets, such as Italy and the Czech Republic.
The premium sector again helped the firm with volumes of Miller Genuine Draft rising 43 per cent in Russia alone.
Overrall, SAB increased group sales by 13.5 per cent to $12.9 billion. The UK-based brewer also increased net profits before tax to $2.2 billion with a good performance on margins putting it in a good position to make further acquisitions in 2005.
