Anheuser sales slip marrs waste award
Environmental Protection Agency's hall of fame but another slip in
beer sales looks like making 2005 a year to forget.
Anheuser (A-B), America's number one brewer, has been elected to the WasteWise hall of fame after receiving several awards over recent years for slimming down on waste.
The group said it had reduced waste sent to landfills by 45 per cent since 1994. It also claims to have reduced the amount of paperboard used in its packaging by 9.5m kg since 2002, and is currently reducing the diameter of its lids; a move that should save nine million kg of aluminium per year when fully implemented in 2006.
The moves give A-B a better chance of coping with rising glass, aluminium and energy prices, which it said had hampered earnings this year.
But, while waste reduction may have made A-B a friend in the US Environmental Protection Agency, the policy has so far not done much to address the ongoing dismal performance of the country's beer market.
The brewer said US beer sales were down 2.7 per cent in the third quarter, in-line with a 2.6 per cent drop for the first nine months of the year, as the market as a whole continued to shrink.
The fall has helped to send profits tumbling 14 per cent so far in 2005, leaving A-predicting a drop in profits for the full year compared to 2004.
The problems have led to question marks over the wisdom of a price-cutting war in the US beer sector, begun by A-B earlier this year.
A-B's big rival in the US, SABMiller, has repeatedly accused A-B of acting irresponsibly by cutting prices in an already troubled market.
SAB said it stuck with comments made last year by chief executive Norman Adami. He said "results indicate that pricing is not the answer", and that the industry's long-term health depended on the major brewers devising good marketing behind their big brands.
Analysts believe beer also has a serious image problem in the US, with more younger consumers switching to wine and spirits when out.
A-B's latest attempt to turn the tide is a range of seasonal beers. The first is Jack's Pumpkin Spice Ale, launched under the Michelob brand and available until mid-December.
Apart from novelty, the beer shows Anheuser trying to get closer to its roots, and the speciality beers that have recorded the only meaningful growth in the sector this year.
"Brewing seasonal beers allows us to stay close to our roots," said Florian Kuplent, brewmaster at Anheuser Busch. "Most of the brewmasters here at Anheuser Busch got started by making their own beers and this is a good demonstration of how a passion rooted in experimentation has grown."
In the end, it may just be time for brewers to focus more resources elsewhere.
A-B's total net sales were held up over the first nine months of 2005 by a 21 per cent rise in its international division, especially in Canada, the UK and China.