Brew News

Brew Blog’s picks of stories from the beer business and beyond.

Diageo will build a new Guinness brewery outside Dublin even as it keeps open the famed St. James’s Gate brewery in the heart of the city. It will close breweries in Dundalk and Kilkenny. Reuters.

For the fifth straight day, oil prices have hit a new peak. This time: $126 a barrel. CNBC.

Bud Barley Wine? An Atlanta Journal and Constitution story about A-B’s Cartersvilla, Ga., brewery describes a “special sampling of some new experimental beers from the pilot brewery. Among them, a tasty Irish Red ale, a solid American brown ale and, most astonishingly, a hoppy, high-gravity barley wine-style ale.” Breweries experiment with styles all the time, many of which never come to market. So no telling whether any of these will someday hit store shelves.

Bud Ale: “A New Style of Ale.”

“Distinctly American.”

Budweiser American Ale, due for release in October, will be billed as “a new style of ale.”

That’s the language used on the label, based on filings with the federal government.

The predominantly red label -- which includes an image of the Anheuser-Busch eagle, the A-B compass and hops – bears this legend: “Budweiser American Ale defines a new style of ale – The American Ale – created by Anheuser-Busch brewmasters to deliver robust ale taste that’s full-bodied, but not too heavy nor too bitter.”

The neck ringer further plays up the “American” angle: “Budweiser American Ale. An ale that’s distinctly American in character. Savor the difference.”

Brew News

Brew Blog's picks of news stories from the beer business and beyond.

SABMiller plc is entering the Ukraine by acquiring the brewer CJSC Sarmat. Meanwhile, the Economic Times reports SABMiller is launching a new mainstream lager in India called Indus Pride.

Diageo reports that sales rose 7 percent during the nine months ended March 31.

Beer Business Daily (subscription required) has an interesting interview with Alan Newman, founder of craft brewer Magic Hat, which is poised to acquire Pyramid Brewing.

McDonald’s Corp. reported that U.S. same-store sales rebounded in April, increasing 2 percent. Same-store sales slipped in March for the first time in five years. Marketwatch.

Wal-Mart same-store sales beat Wall Street estimates. But, as this BusinessWeek story explains, investors were trying to balance this news against more depressed reports from apparel retailers. The question: How are consumer spending habits changing as they budget more for gas and food.

InBev European Imports Up 17 Percent

Led by Stella Artois.

The United States was a bright spot for InBev during a rough first quarter.

European imports, led by Stella Artois, grew by 17 percent during the quarter, InBev reported. That strong performance drove a 2.9 percent increase in volume for North America.

(Canada, where InBev markets Labatt, represents two-thirds of its North American volume and grew by 1.6 percent).

Anheuser-Busch started handling InBev’s European brands last year. Recall that imports helped minimize A-B’s decline in sales-to-retailers during the first quarter and drove the increase in shipments.

Worldwide, Stella Artois volume grew by 7.2 percent, thanks to higher volumes in the United Kingdom, the United States and Argentina. Beck’s grew by 0.7 percent worldwide.

InBev’s earnings fell by a greater-than-expected 11 percent during the first quarter amid rising costs and soft performance in Brazil.

Here’s InBev’s earnings release.

Here’s the Wall Street Journal’s coverage of InBev’s earnings.

Here’s Brew Blog’s coverage of A-B’s earnings.

Beer Marketer's Insights (subscription required) has more on InBev's earnings.

Brew News

Brew Blog's picks of stories from the beer business and beyond.

Here’s coverage of Molson Coors Brewing Company’s first-quarter earnings from The Wall Street Journal and Bloomberg. Morgan Stanley and Credit Suisse weigh in as well.

Anheuser-Busch's Ascent 54 -- a beer now marketed only in Colorado -- goes national this fall as Michelob Dunkel Weisse, reports the Rocky Mountain News.

Beer Business Daily (subscription required), remarking on Coors’ success with packaging innovation, says: “Here's a prediction: A-B is fast-tracking some package innovations of its own.” Should be interesting to watch whether that develops.

The Greensboro (N.C.) News and Record has an interesting story about craft beer dinners hosted by Foothills Brewing in Winston-Salem.

Miller Chill Gains Share in Supers

Sales rise along with temperature.

One of Miller Brewing Company’s priorities for the summer selling season is building Miller Chill.

It’s going to be a long summer -- particularly as Anheuser-Busch ramps up efforts behind Bud Light Lime. But Miller’s initial efforts, which include new packaging and pushes in the on- and off-premise alike, appear to be working.

Miller Chill held 0.3 percent volume share for the four weeks ended April 26, according to beer sales statistics. That's up 0.1 points from the four-week period ended March 29.

Demonstrating that its superpremium positioning remains solid, Miller Chill's dollar share increased by 0.1 points to 0.4 percent.

Meanwhile, total distribution points -- a measure that Nielsen uses to track breadth of distribution -- showed a sequential increase of 7.7 percent, according to Nielsen. And the average number of items carried increased by 7.4 percent.

Also telling: The two original packages -- the 6-pack and 12-pack bottles -- are on Nielsen’s list of top 25 growth items (12-pack at No. 8 and 6-pack at No. 14) in supermarkets for the year-to-date through April 26.

Meanwhile, in the off premise, Miller has been driving placements for the new 12-ounce can and gaining Miller Chill displays.

On-premise, the Miller system has secured features and promotions as well as placements of the Miller Chill aluminum bottle.

Brew News

Brew Blog’s picks of news stories from the beer business and beyond.

Supermarket beer volume fell 0.4 percent during the four weeks ended April 26, according to beer sales statistics from Nielsen. Miller volume share fell 0.5 points while dollar share fell 0.3 points. Anheuser-Busch volume share declined 0.1 points and dollar share dropped 0.4 points. Coors volume and dollar share both increased by 0.8 points. Imports gained 0.1 points of volume share but dollar share slipped by 0.2 points. Craft volume share was up 0.3 points and dollar share was up 0.7 points.

The entry price for a Super Bowl commercial will be $3 million next year, the Wall Street Journal reports. But longtime buyers won’t necessarily have to pay that much. From the story: “Anheuser-Busch, for example, has locked in a rate of about $2 million for each of its spots, according to a person familiar with the matter.”

The St. Louis Post-Dispatch explores the potential impact of an economic slowdown on the beer business.

Coors Sales up 6.6 Percent

Four lead brands post growth.

Coors Brewing Company, the U.S. arm of Molson Coors Brewing Company, posted 6.6 percent growth in sales to retailers during the first quarter.

From the Molson Coors earnings release:

The increase was primarily due to mid-single-digit growth of Coors Light, and double-digit growth by Blue Moon, Keystone Light and Coors Banquet. Each of the Company's four largest U.S. brands, representing more than 93% of its U.S. volume base, achieved accelerated sales and market-share gains in the quarter. The strength of our U.S. portfolio spanned the country, resulting in significant market share gains and sales-to-retail growth in all major channels and in 47 out of 50 states -- and double-digit growth in 15 of these states. Total sales volume to wholesalers grew 7.4 percent. Net sales per barrel increased 3.4 percent in the first quarter, driven primarily by positive net pricing.

Underlying pretax income in the U.S. jumped by 36 percent to $61.9 million.

In the earnings release Molson Coors CEO Leo Kiely said:

"We are very pleased with our first quarter results, which reflect continued strong momentum. Across the board, our teams have remained focused on creating profitable growth by building brands and reducing costs. Based on the strength of our brands, sales execution and cost-reduction initiatives, our U.S. and Canadian businesses once again delivered positive pricing and strong sales-to-retail and bottom-line growth. In the U.K., where challenging conditions still dominate the brewing industry, our team grew overall market share and net pricing."

Coors and Miller Brewing Company, the U.S. arm of SABMiller plc, are parties in a proposed joint venture still subject to regulatory clearance.

The Molson Coors earnings release can be seen here.

Takeover Rumors Swirl Around A-B (Again)

Option prices jump.

Anheuser-Busch, once again, is at the center of takeover rumors.

From a Bloomberg report:

Speculation that Anheuser-Busch Cos. will be acquired sent options on the world's second-largest brewer to the highest prices since January.

Implied volatility for the St. Louis-based company rose to 31.47, indicating traders anticipate bigger share-price swings. Call-option trading increased to 46,007 contracts, the most since June. The most-active options give the right to buy the stock for $55 by June 20. Anheuser-Busch has never closed above $55.

``It looks like a significant position being built in anticipation of a potential takeout,'' said Henry Schwartz, president of Trade Alert LLC, a New York-based provider of options market analytics.

The Bloomberg story notes that A-B President and CEO August Busch IV last month told distributors the brewer wouldn’t be sold under his watch.

A-B chief financial officer W. Randolph Baker told Bloomberg in an e-mailed statement that the brewer doesn’t “confirm, deny or speculate on rumors.”

The Bloomberg report can be seen here.

Here's Brew Blog's coverage of remarks by August Busch IV to distributors.

Brew News

Brew Blog's picks of stories from the beer business and beyond.

Happy Cinco de Mayo. Beer Business Daily (subscription required) says with year’s holiday, “more than any before it, a lot is at stake for our beer companies.” The reason: Anheuser-Busch officially launches Bud Light Lime; Crown Imports tries to get Corona Extra back on track; Heineken USA tries to drive momentum for Femsa brands Dos Equis and Tecate; and Miller Brewing Company tries to ramp up excitement around Miller Chill. “All summers are competitive, but we would contend that this summer will be particularly fierce,” BBD says.

“Is the erosion of A-B’s distribution control a blessing in disguise?” asks a note published today by Credit Suisse. Noting A-B’s decision to relax its distributor exclusivity provisions and New Belgium Brewing Company’s announcement it would go with A-B distributors in Tennessee, the note suggests that more crafts and imports will seek out A-B wholesalers. Bud distributors, of course, underindex in crafts/imports compared to “All other” wholesalers. A big caveat: “However, if A-B can’t turn around its core brands in this
scenario, it will be a lose-lose for A-B. A-B will have less control in its distributors and be back to square one on the high-end.” The report can be seen here. (Update: Article corrected to identify Tennessee as the state where New Belgium decided to go with A-B wholesalers. The story originally said it was Kentucky.)