Indirectly admitting that its partnership with Miller Brewing Co has not worked out, Canadian brewer Molson announced that it had bought back the ownership of its brands in the US and regained control of its strategy. The re-purchasing of the Molson brands was valued at US$ 133 million in cash. Thus Molson is hoping to reverse the fortune of its beer brands which have been floundering for some time despite the US beer market reporting compound growth of more than 11 % over the past five years. Molson’s CEO, Dan O’Neill, was reported saying that they (Molson) were not a priority in that mix (partnership with Miller Brewing). It is generally believed that Miller was not spending enough on marketing Molson’s brands Molson Canadian, Molson Golden and Molson Ice in the US..
Anheuser-Busch announced an 11 % increase in its third quarter profits (ended 30 September 2000) but disappointing volume growth. Third quarter earnings were US$ 514 million compared with last year’s US$ 461.5 million. Domestic beer volume grew only 2.7 % to 26.3 million barrels whereas analysts had predicted volume growth of 3.5 %. As a result, A-B’s share took a bit of a dive as, in the words of one commentator, "investors always like to see volume growth." Year-to-date, A-B sales are up 11 % to US$ 1.34 billion. Philip Morris reported that underlying operating profit at its subsidiary Miller Brewing Co. climbed 3.6 % during the third quarter, to US$ 145 million. However, Miller’s domestic sales slid 4 % to 10.9 million barrels; also revenue slipped 0.3 % to US$ 1.15 billion....
... is the marketing slogan of one of Austria’s best known international brands, the energy drink Red Bull. Apparently, beverage giants Anheuser-Busch and the Coca-Cola Co. have felt the winged effect too because in November A-B launched its own energy drink 180 in Los Angeles and Las Vegas. There are plans to introduce it in 30 major US cities in January. The "orange citrus blast" 180 will be marketed to night clubs, restaurants and stores where the slim 8.2 ounce can is expected to sell for US$2 (stores) and US$4 to US$6 (restaurants, night clubs). Also in November, the Coca-Cola Co. launched KMX, while Pepsi’s recent acquisition, the quirky SoBe beverage company has a new product, the Adrenaline Rush, in the pipeline..
In nine of twelve South American countries, a single brewing group controls more than 80 % of the market, according to a publication by "Emerging Markets Brewery Fund", New York, HypoVereinsbank. In the last 18 months, the leading breweries in Brazil, Colombia and Peru have taken over their competitors, strengthening their positions in the market. In Brazil, Latin America’s biggest beer market, the two largest brewing groups, Cervejaria Brahma and Antarctica Paulista, amalgamated. The Monopolies Authority has made it a condition that the new company, AmBev, must sell the "Bavaria" brand (5 % market share) as well as five brewery plants with a total capacity of 7 million hl. The sale of Bavaria will push down AmBev’s market share from 71 % to 66 %.3 million hl.5 % to 8.8 million hl.A..
Grupo Modelo reported that during the third quarter ended 30 September 2000, shipments of beer grew 13.3 % compared to the same period last year. While domestic sales rose 5.3 %, export sales increased 42.7 %. Export shipments accounted for 27.0 % of sales, up from 21.4 % registered during the third quarter 1999. During the first nine months the Mexican brewer sold 27.6 million hl of beer. Total net sales for the third quarter were 7,467 million pesos (+ 16.8 %), operating income was 1,842 million pesos (+ 31.8 %). Net margin was up 25.6 % and at 833 million pesos represented 11.2 % of net sales. Operating expenses grew below net sales which shows the efforts Grupo Modelo has been making in order to improve productivity, commented Carlos Fernández, CEO of Grupo Modelo.
Mexico anticipates a 5.2 % increase in beer output, together with higher exports in 2000. Due to positive trends in the sector, experts forecast good sales opportunities for suppliers of brewery equipment. The United States has a dominant role in the Mexican beer market in terms of exports and imports. According to the experts, the increase in beer output in 1999 was driven by exports with a plus of 17 %. Mexican beer is becoming more popular all the time, in particular in the United States. 86 % of the industry’s total exports of US$ 721m in 1999 went to Mexico’s northern neighbour. Sales opportunities for the well-known Corona and Sol brands are good in the US. By comparison, Germany imported US$ 2.5m worth of Mexican beer in 1999.6 % in 1999. Along with exports, beer imports rose also.
About 70 of Canada’s microbrewers have begun lobbying for a 60 % reduction in the excise tax. The craft brewing industry employs 3,300 people directly and indirectly and pays about CAN$ 21 million per year in excise tax, according to the newly formed Canadian Council of Regional Brewers. Canadian brewers, irrespective of size, pay CAN$ 2.30 per case in excise tax. However, it costs them almost twice as much to produce a case of beer: CAN$ 230 per hectolitre against the major’s (Labatt and Molson) CAN$ 128. While US microbrewers already benefit from a lower excise tax burden compared with the big brewers, Canadian microbrewers have to operate in an uneven playing field. They fear that the excise tax makes them non-competitive and will eventually price them out of the market.
In 2001, Miguel Alacron, formerly of bottling company Coffin, which is owned by Coca-Cola, will take the reins at Cervejaria Kaiser, replacing Humberto Pandolpho as president. The position of CEO was created for Augusto César Parada, whose task will be to increase Kaiser’s market share, which has fallen slightly from 13.2 % last year to 12.8 % this August, according to AC Nielson. Courtesy of a change in the distribution regulations, beers and other beverages can now be part of an establishment’s single account. Before CADE authorised the reclassification of the beverage market, retail outlets had two different accounts - for example, one with Kaiser and one with Coca-Cola. Parada announced that beer prices will go up between 5 % and 8 %..
Perhaps they should have remembered the song "The Girl from Ipanema" in which a haughty Brazilian Girl walks by and does not even take notice of the Bossa Nova-ing bloke. Let’s hope the same fate does not befall the Canadian brewer Molson, who is reported to be buying the Bavaria beer brand and five plants from market leader AmBev. The divestiture of the Bavaria brand and five plants was the condition made by the Brazilian competition watchdog, CADE, in spring this year for the approval of the merger between brewers Antarctica and Brahma. The deal being performance-driven, Molson will pay an initial US$ 98 million for the Bavaria brand plus access to AmBev’ distribution network. The balance of sale is triggered by increased market share over the next five years.5 %.5 % per year..
... that on-premise beer consumers are predominantly male (84%), with 60% under the age of 35 and 73% having over US$30,000 in annual income? Makes the barfly an almost exclusive male phenomenon. Moreover, some 53% of weekly beer sales, on premise that is, occur on Friday and Saturday with consumption fairly consistent throughout the remainder of the week.