Clogs in A-B’s Funnel?

A-B facing supply, focus challenges, reports say.

Anheuser-Busch appears to be hitting some snarls in its effort to bring new brands to distributors.

Last year A-B -- amid requests from restricted wholesalers for higher-margin beers -- started inking distribution and marketing deals for crafts and imports, including InBev’s European brands.

When A-B announced this “funnel strategy” (then-CEO Pat Stokes said A-B would act as a brand funnel for distributors), observers speculated that A-B would face some execution challenges. Based on reports in beer industry trade magazines, it appears that’s happening.

A report in the April 16 Beer Marketer’s Insights said while the new strategy has created a lot of excitement, distributors say there have been "hiccups" including supply issues and "misplaced efforts."

Meanwhile, Friday’s Beer Business Daily reported:

“…we can now definitively report that the shortages of InBev and Rolling Rock inventory is a problem A-B is having across the board, and as far as we can tell, it is affecting A-B distributors at the same rates as non-equity A-B distributors.

"Now, there are always exceptions. But we’ve been watching this and talking to folks for over a month, and it’s pretty clear that there are logistics and/or supply problems."

That said, it’s obviously far too early to gauge the success of A-B’s strategic shift – especially given A-B’s track record. BBD also quoted a recent report from analyst Kaumil Gajrawala which said:

“In our view, the biggest transformation A-B has undergone is its willingness to pursue higher-growth segments outside of domestic beer. We believe that over the next five years, A-B’s deals from 2006 will become increasingly important drivers of profit growth. Under the stewardship of ABIV/Lachky/Peacock, among others, the brands should benefit from A-B’s vast distribution and marketing capabilities."

Time will tell.

To go to the Beer Marketer's Insights homepage, click here.

To go to Beer Business Daily, click here (subscription only).