Home > International Report > The Americas

The Americas

In a regulatory filing submitted to the Securities and Exchange Commission in March, Anheuser-Busch Cos. Inc., the world’s number 1 brewer, announced that it cut its chairman’s salary and bonus when he left the chief executive officer post last year, and rewarded its new chief executive with a pay rise. Chairman August A. Busch III, 65, was paid a salary of US$900,000 in 2002, which included a new salary level after handing over the CEO position to Patrick Stokes, 60, in July 2002. Busch’s salary was almost US$1.2 million the year before and his bonus dropped to US$2.7 million in 2002 from US$3.3 million the year before. In the filing Anheuser-Busch reported that August Busch III also received options for 1 million shares, down from options for more than 1.08 million shares he got in 2001.

Breweries in Alaska? In fact, there are 12 breweries and brewpubs operating in the state, which sports 626,000 inhabitants, 10,000 cattle and 800 hogs. Not that the latter two would drink beer. But anyway. The largest brewery of the state, Alaskan Brewing Company (production: 90,000 hl), which has been brewing award-winning beers since 1986, released its limited edition Alaskan Smoked Porter in England in March. The success of Alaskan Smoked Porter at international competitions and persistent inquiries from England, led to the distribution agreement. Alaskan Smoked Porter showcases alder smoked malt in a rich strong porter.
Although originated in England, porters were brewed in Juneau, Alaska, during the 1880 gold rush..

During its financial year 2002, ending 31 December 2002, Mexico’s leading brewer Grupo Modelo increased its net sales to 36 billion Mexican pesos (+6.6%) as a result of a 3.6 percent and 13.5 percent growth in domestic and export sales, respectively. Total net revenues from export sales climbed to 908 million dollars, a 15.3 percent increase over 2001. The average price per hectoliter for the export market showed an increase of 3.6 percent in dollar terms compared to 2001. Export sales contributed 24.9 percent to net sales, domestic sales 66.4 percent. Operating income stood at 9.4 billion pesos, EBITDA at 10.9 billion or 30.2 percent of total sales.
Total beer shipments came to a new record level of 39.9 million hl (+3.9%), said Grupo Modelo in a statement.3 percent.S.

Sorry, but we don’t know any partiers. We only know Cartier. Small wonder that Labatt had to pull out of its online venture beer.com and sell its stake to an upstart Canadian online retailer for an undisclosed sum. Apparently, Labatt too had trouble finding partiers with an interest in "beer, sex, music, fun and beer girls" to make the venture worth the investment.
The site, which was set up in 1999 by Interbrew/Labatt and a host of partners, was aimed at 19 to 35 year old "partiers" and tried to integrate the solitary activity of surfing the net with the social activity of drinking. Does it take anybody by surprise that the site never lived up to its ideal despite its claims to the contrary? Labatt has not shelved the beer.com site altogether..

Do Canadians drink Canadian beer brands? Err, not necessarily. Although the domestic brand Molson Canadian is in a close race for top selling beer with Budweiser (brewed under licence by Labatt), another US brand Coors Light ranks third.
To a Canadian brewer this scenario must appear worrisome. Especially, if his brands seem to be lagging. According to reports, the country’s largest brewer, Molson, saw its market share fall 1.1 percentage points to 43.9 percent in 2002, mainly because of the decline of Molson Canadian. That’s why the brewer intends to pay more attention to its core brands from now on. After all, they still represent the most profitable part of its brand portfolio.
This spring and summer Molson will launch advertising which celebrates Molson Export’s centennial..

Adolph Coors Co. reported a 27 percent increase in fourth-quarter 2002 net income, but its results missed Wall Street’s estimates amid declining net sales in the Americas. On the announcement Coors’ shares dropped about 15 percent because earnings were under expectations. On 6 February 2003, the brewer announced it had a net income of US$20.2 million, or 55 cents a share, up from US$15.9 million, or 44 cents a share, in the year-earlier period. Excluding restructuring expenses and other items, Coors said it would have earned US$23.1 million, or 63 cents a share, in the latest quarter, up from US$17.9 million, or 49 cents a share, a year earlier.
Sales doubled to US$1.33 billion from US$652.5 million. Excluding excise taxes, net sales rose 76 percent to US$981.1 million.S. Coors added..

From a trip to Cleveland, Ohio in April 2002 the author gives his impressions and observations, combined with his previous knowledge of the US craft brewing industry in a personal snapshot of this industry - what does it look like today, where did it come from, how is it organised - and a glimpse of where it may be going and what impact it may have outside North America.

Why is the US Craft Brewing Industry a topic that should interest readers of Brauwelt? Well, in order to answer this question I have to use some fairly big words and some postulates that may seem preposterous:
1. The wonders of the US Craft Brewing Industry may be considered the best kept secret in the brewing industry outside the USA, and maybe specifically in Denmark.

Anheuser-Busch Cos. Inc., the world’s largest brewer, announced on 5 February 2003 that fourth-quarter profit climbed amid a solid performance in the key U.S. market including sales of Michelob Ultra, its recently launched low-carbohydrate beer. The company said it earned US$269 million, or 32 cents per share, compared with US$228 million, or 26 cents, a year earlier. The result was in line with analysts’ expectations. St. Louis-based Anheuser-Busch said sales for the quarter rose 7.1 percent to US$3.10 billion. Last month the company said its shipments of beer to U.S. wholesalers hit an all-time high in 2002, and reiterated its earnings growth estimates for 2002 and 2003.
At that time, Anheuser-Busch backed its prior estimate for earnings growth of 18.5 percent in the fourth quarter..

John Hickenlooper Jr, well known among American craft brewers for having been one of the first and most successful brewpub operators in the country, has decided it was time for a change. At the age of 50, he determined to run for mayor of Denver, a city of 630 000 inhabitants and 12 000 municipal employees, when the law prevented the present mayor Wellington Webb from a fourth term. Incidentally, Hickenlooper had made sure in time that he fulfilled all the "technical requirements" to stand for office. In conservative America, if you are not married and without a family, you stand almost no of getting elected. A confirmed bachelor for years, Hickenlooper got married two years ago and now has a small child. Conducting a campaign is a costly affair.5 million to win the race in Denver.".

In the end not even his long-term employers, Philip Morris’ Marlboro men, who are SABMiller’s largest shareholders, supported him: In January, after 28 years with Kraft Foods and Miller Brewing Co (which are both part of Philip Morris), John Bowlin took immediate leave as CEO of Miller Brewing Co. Last year, Bowlin, who joined Miller in 1999 to bring about a desperately needed turnaround, was allowed to smile on Philip Morris’ unexpected coup: the sale of Miller to South African Breweries for US$ 4.9 billion. However, at the end of 2002 signs of a turnaround were still nowhere in sight. In 2002, Miller registered another decline in beer output: minus 3 percent. That proved Bowlin’s downfall. The South African of Lebanese origins joined SAB in 1979. No small feat..

Always keen to secure control over its supplies, Grupo Modelo has become a minority investor in John I. Haas’ Supercritical CO2 Extraction Plant in Yakima, Washington, USA. In January 2003, a new company called International CO2 Extraction, LLC., was created. As CO2 hop extract is a critical ingredient for Modelo’s beers, this investment will ensure that its growing extract needs will be met in the future, the brewer said in a statement.
Henry von Eichel, CEO of John I. Haas, Inc. was quoted as saying, that "We are very pleased with Grupo Modelo’s investment in this joint venture. It shows their long term commitment to the US hop industry and their confidence in our technical abilities. Haas, Inc., which will also operate the plant as it has since 1994, when the plant started up.