Rallying his troops

Miller Brewing Co is seeking a stronger relationship with its independent distributors or face increased market dominance by industry leader Anheuser-Busch Cos. This is the message the President and Chief Executive Officer Norman Adami sent out to his 470 wholesale distributors. Incidentally, more than half of Miller’s wholesalers also carry products from Adolph Coors Co. As a result, there’s often tension between wholesalers and Miller. Obviously, Miller would like its wholesalers to devote more resources to selling such brands as Miller Lite, Miller Genuine Draft and Miller High Life than to Coors’ brands. The key is for wholesalers to use Miller’s newly created local marketing plans and to invest the proper amount of time and money in marketing those brands.....

Tough being the small guy

With beer distributed being effectively controlled (not owned) by the leading brewers Anheuser-Busch, Miller and Coors, many microbrewers find it increasingly difficult to get their beers to the market. No wonder the auditor for Redhook Ale Brewery Inc. has questioned whether the microbrewer can survive if a distribu- tion agreement with Anheuser-Busch Cos. is terminated early. Redhook, which is based in the state of Washington, entered into an alliance with Anheuser-Busch in October 1994. According to Redhook, the distribution agreement runs for 20 years. But - and that’s a big BUT - the agreement may be terminated by either party without cause on 31 December 2004, or upon other conditions....

Daft to go

His reign at Coca-Cola has to be considered a brief one. Doug Daft, the Australian CEO of the Coca-Cola Company, is to resign at the end of this year. Adieu then to his plans to modernise Coke. In Daft’s world of the future people would have three taps at the sink: one for hot water, one for cold water and one for Coke. One day soon people would be able to turn on the tap marked C at the sink and fresh Coke would pour out of it. Or so he hoped. Like them drinking tap water out of bottles. Alas, it is not to be. The launch of Coke’s Dasani has been abandoned in UK and postponed in Europe.
However, more than these marketing blunders, the decline in Coke’s share price proved Daft’s downfall. Today the stock is at USD51. ....

We were not amused

Chile’s largest brewer Compania Cervecerias Unidas (CCU) said that Anheuser-Busch Cos. Inc. was considering the sale of its 20 percent stake in the company. Market observers had speculated for some time that Anheuser-Busch might withdraw from CCU after its protest last year over Heineken indirectly buying a large stake in the company came to nothing. Anheuser Busch paid USD321 million for its stake in CCU in January 2001. Analysts said it was the most explicit sign yet that Anheuser-Busch was seriously considering pulling out of CCU. CCU is 61.6 percent owned by holding company Inversiones y Renta, or IRSA, in which Chile’s Quinenco has 50 percent and Heineken has 50 percent as of early 2003....

Southern Fortress

It only took two strategic deals and AmBev had built ist "southern fortress" (if Carlsberg has its Nordic Fortress, why can’t AmBev have one in the southern hemisphere?) which comprises almost all of southern America. With the exception of Colombia and the three states to the east of Venezuela (Guyana, Suriname and French Guiana), AmBev is present in all markets. Formed by the merger of Brahma and Antarctica in 1999 AmBev has become the fifth largest brewer in the world and the largest brewer in Latin America. By its own account it controls about 70 million hl of beer and is the leading brewer in Brazil, where it enjoys a market share of 65 percent thanks to the popularity of three brands: Skol (31%), Brahma (20%) and Antarctica (13%)....

Trouble ahead

The going certainly got a bit tougher for Molson in Brazil last year. Distribution problems were quoted as the main reason why Molson would not meet its EBIT growth target for the full year ending 31 March 2004. The recent deal between Interbrew and AmBev will is likely to muddy the water a bit further. AmBev is not only Molson’s main competitor in Brazil, it has also become its main competitor back home having obtained Labatt Canada from Interbrew in that complex stock and asset swap which marks the InterbrewAmBev combination. Molson bought what was then Brazil’s second largest brewer Cervejarias Kaiser for USD765 million two years ago from a consortium made up of the Coca-Cola Co., Heineken (which has a 20% stake in Molson’s Brazilian business) and 16 Brazilian Coke bottlers....

A tablespoon of peanut butter

As millions of Americans seem to be ardent followers of the Atkins diet, which preaches weight loss by cutting carbohydrates and sugar from one’s diet in favour of protein, brewers felt they had to respond to the latest food fad. They rolled out low-carb beers to please the carbohydrate counters. A bottle of a low-carb beer with 4.5 % ABV and 2.5 g of carbohydrates has about the same level of carbohydrates as eating a tablespoon of peanut butter.
By comparison, regular beers have between 11 g and 17 g of carbohydrates, equivalent to 10 Freedom fries (a note to our American readers: Is it ok to call them French fries again?). 60 percent of all Americans are considered overweight. In the US market it was Anheuser-Busch’s Michelob Ultra which started the new sub-category of beer..

Crying into their beers

No more Samba for Molson’s executives after the brewer announced that a sharp decline in Molson’s Brazilian sales during the final quarter of 2003 would prevent the company from meeting its 14.5 percent growth target for the full year ending 31 March 2004. Instead the company is now expecting EBIT to rise between 0 percent and 2 percent, to between CAD512 million and CAD520 million.
The volume of sales in Brazil in the October-December quarter was down 23 percent from a year earlier, which Daniel O’Neill, Molson’s President and CEO, explained by saying that the time needed to revamp the sales force in Brazil had taken much longer than expected. One analyst was quoted as saying that Molson’s brands in Brazil were "tired" (i.e.

New scale wrap around packer

Nigrelli Systems Inc., Kiel, WI/USA announced the introduction of it’s newest packaging machine; the Model SP-2000 Ultra-High Speed Wrap-Around Multipacker. This wrap-around style multipacker is capable of producing in excess of 200 packs per minute, with the capacity of 2400 containers per minute; nearly double the speed of high speed wrap-around multipackers currently available. Developed and manufactured at the request of an industry recognized corrugate sheet and paperboard supplier, the Model SP-2000 is capable of producing 12 to 24 packs of cylindrical containers (cans, bottles, etc.) typically used for beer, soft drinks, and other beverages. It also can pack smaller multipacks into a larger case size (i.e. 4 - 6 packs = 24 pack). More information is to be found under www.nigrelli.

MBAA announces 2003 award winners

At the 116th MBAA Convention held in October in Milwaukee/WI, the prestigious MBAA Presidential Award was given to Christoforos Lekkas, ICBD School of Science, for his poster, "The importance of free aminao nitrogen in wort and beer." Sandra van Nierop, South African Brewereies, received the award for her paper, "Enzymatic generation of factors from malt responsible for premature yeast flocculation," and Charles Bamforth, University of California, was awarded for his paper, "Starch in brewing: a review."