A-B give analysts and upbeat outlook
The upbeat tone for the presentation from Anheuser-Busch Cos. was set from the beginning. Executives showed analysts what was, by USA Today’s tally, the most popular commercial of this year’s Super Bowl: a Budweiser spot starring a Clydesdale and a Dalmatian.
"We kicked off the year with a new attitude, a new focus and a new resolve," said August A. Busch IV, president and chief executive of the St. Louis brewer.
Busch told analysts at a conference in Boca Raton, Fla., that A-B is focused on raising U.S. beer sales and strengthening its core brands such as Budweiser, Bud Light, Natural Light and Busch beer.
The country’s biggest brewer plans to boost its total media spending by 10 percent this year. Together, Budweiser and Bud Light will get a 24 percent boost. Spending on digital media will jump by 55 percent this year.
"We believe we are adapting well to the changing landscape" of the U.S. beer industry, said Busch. The company touted recent growth in sales to retailers — a key indicator of drinkers’ demand for beer.
Those sales rose 1.9 percent through mid-February. About two-thirds of the growth came from imported beers and alliance brands such as imported Stella Artois and Hoegaarden; the rest came from beers produced by Anheuser-Busch.
Faced with heavy cost pressures for commodities like barley and hops, A-B aims to wring out waste and inefficiency. "Project Blue Ocean," unveiled last year, could yield more than the originally planned $400 million in savings, Busch said paydayloan. The cost-cutting and productivity program was first aimed at brewing operations and the supply chain, but has been expanded to other areas of the company, such as information technology.
This year is set to be an eventful one for U.S. brewers. Worries of an economic downturn are swirling. SABMiller and Molson Coors Brewing Co. plan to merge in the U.S.
The new MillerCoors entity, still awaiting regulatory approval, presents a big opportunity for Anheuser-Busch, Busch said. "There’s going to be a tremendous amount of disruption" in the MillerCoors selling network — giving A-B an opening for perhaps 18 months, Busch said.
While it eyes MillerCoors, A-B plans to change its own relationship with its network of 600 independent wholesalers.
Busch said A-B will change its exclusivity incentive — a long-standing program originally designed to entice beer distributors to focus only on Anheuser-Busch brands. He said the program’s current configuration may work against the brewer, because competing wholesalers were able to add more profitable beers. He did not give details of the planned changes.
jmcwilliams@post-dispatch.com | 314-340-8372
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