Anheuser Busch meeting US beer challenges

By Neil Merrett

- Last updated on GMT

Related tags: Anheuser busch, Beer, Alcoholic beverage

A refocusing of Anheuser Busch's US operations has given the
company renewed optimism in its ability to fulfill its long-term
growth ambitions.

While multinational brewers are increasingly moving towards emerging markets in Latin America, Eastern Europe and Asia to boost beer sales, Anheuser Busch expects to make significant growth through its domestic operations in the coming years. Group chairman August Busch IV told investors attending a Lehman Brothers conference yesterday that the company remained on track to exceed its projected sales and profit gains for the second fiscal half as a result. "We are adapting our portfolio and entire system to meet the demands of a changing marketplace and we are making good progress at strengthening our company's foundation for sustainable long-term growth,"​ he stated. The group had previously lamented stagnant sales in the country, particularly of its key brands such as Budweiser. Busch said that the group's newfound optimism over the US beer market reflected improving sales volumes throughout the industry, which continued to grow at a "healthy pace"​ from 2006. He attributed the growth to new developments in how US consumers were drinking beer in the country, particularly in demand for imported brands and specialist craft beers. The company added that it was therefore amending its portfolio accordingly to better meet this demand. It was not just in alcoholic beverages though where the brewer of Budweiser, its self proclaimed "King of Beers"​, expected significant future growth. Busch added that the company was increasing its presence in other high growth markets alongside its traditional revenue stream, like energy drinks and premium water brands. Though a changing focus in beer production failed to prevent sales volumes declines for the group during the first half of the year, the company remained confident it would post improved revenues for the remainder of the fiscal year. The Brewer's beer sales-to-retailers during the current financial half are already up by 2.4 per cent over the previous six-month period, Anheuser Busch announced at the meeting. This expected improvement in the group's domestic operations does not appear to have sated its desire to increase its presence on the international beer market though. Net income for the company from international operations has increased by 20 per cent a year since 1999, with the brewer keen to continue its expansion. The majority of this growth according to the company has stemmed form the 50 per cent stake it holds in leading Mexican brewer Grupo Modelo, which produces Corona, the highest selling imported beer brand in the US. However, it is not just Mexico, where the group's international ambitions lie. China has also become a key target of the Brewer's expansion strategy. In March, YR Cheng, Anheuser Busch's managing director in the country, told sister publication AP-Foodtechnology.com that China has become a highly significant market for the group's global operations. "As the largest-volume and fastest-growing beer market in the world,Chinais the most important market for Anheuser Busch outside theUnited States,"​ he said.

Related topics: Markets, Beer, Wine, Spirits, Cider

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