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The Americas

According to Competitive Media Reporting, the brewing industry’s ad budget topped US$800 million in 1999. By comparison, the soft drink industry spent US$600 million on ads.

U.S. consumers still like their pop sweet and brown. Beverage Digest, a trade journal which tracks the sales of 192-ounce cases, announced that the biggest gainers in the US$58 billion carbonated soft drinks industry included the brands Mountain Dew (PepsiCo), Cadbury-Schweppes’ Dr Pepper and Coca-Cola’s Sprite. Table

Draft beer may be on the decline on the US market, but still enjoys a 10% share of the beer market. Apparently there are no standards for the dispense of beer, so the Draft Beer Guild was founded in January 1999 as a response to the declining quality and sales of draft beer. The members of the guild have developed a model for Cleaning Standards which has already undergone one preliminary draft proposal in December. The Draft Beer Guild can be contacted at draftbeerguild@uswest. net.

Coca-Cola’s top management promised that the company would again deliver robust earnings growth of 15% in the long term after two years of stalled earnings, management shake-ups and the lay-off of 5,200 employees earlier this year. With a first quarter expected volume growth of 3%, the volume growth for 2000 should wind up in the 5% to 6% range, Gary Fayard, Coca-Cola’s chief financial officer has been quoted saying. But the financial markets are still waiting to see if Coca-Cola can return to its phenomenal record of earnings growth of 15% to 20%.

Anheuser-Busch Co., reported a 9.8% rise in first quarter net income and predicted similar results for the rest of the year, benefiting from a strong volume increase and beer price hikes. The St. Louis brewer announced net income of US$ 350.3 million compared with US$319.1 million in the year-earlier period. Revenue rose 4.7% to US$2.81 billion from US$2.69 billion. The results were helped by a 2.2% rise in domestic beer volume to 23.7 million barrels despite a price increase in February. International volume rose 15% to 1.5 million barrels due to gains in China and Britain.

Miller Brewing Co. has rolled out nationally three brands in plastic bottles. Miller Lite, Miller Genuine Draft and Icehouse are sold in 16- and 20-ounce plastic bottles. While Miller Lite and Icehouse are packaged in brown plastic bottles, Miller Genuine Draft is packed in a clear bottle. Miller began test marketing the plastic bottle in October 1998. Whereas Anheuser-Busch in 1999 decided to suspend its plastic bottle tests and Coors continues to explore the possibility, Miller went ahead with a national release. Plastic bottles will account for no more than 2% of Miller’s US sales this year.

Miller Brewing Co. has reshuffled its speciality beer portfolio, buying the remaining stake in the Celis Brewery Inc., an Austin, Texas-based brewer that was partly owned by Miller. In a related development, Miller sold its interest in the Shipyard Brewing Co., a Portland, Maine-based company. Terms of the deal were not disclosed. Miller bought stakes in both Celis and Shipyard in 1995 when craft brewing was all the rage. In 1999, Shipyard sold 24,000 barrels and Celis 15,000 barrels beer. This restructuring of the portfolio leaves Miller with only two speciality brewers in its portfolio: Leinenkugel and Celis. Miller’s US sales volume in the US in 1999 was 43.3 million barrels.

July is to be the American Beer Month, a national promotional campaign initiated by the Institute for Brewing Studies (IBS), Boulder, to raise the awareness of the variety and quality of American craft beer. The American Beer Month will provide many different avenues for celebration and promotion by brewers, brewers guilds, wholesalers, restaurants and other brewing-related companies across the nation. According to the IBS, 21 brewing organisations from throughout the US have given their endorsement of the American Beer Month campaign. For further information, see www. beertown.org.

In May, the Oregon Brewers Guild, representing 35 independent craft brewers, expressed its disappointment with Anheuser-Busch’s recent radio ad campaign for Michelob Amber Bock. According to the open letter sent to Mr Busch, the ad which depicts a consumer pouring a micro beer down the drain instead of into a glass was not only inaccurate but also not in the best interests of the US-American brewing industry. The letter also complains about the ad’s contention that micro beers were "just too bitter" and points out that in the face of increased competition from imports, craft brewers and major brewers should promote the positive contributions of all of America’s brewers and not sling mud at each other.

During the first quarter 2000, Grupo Modelo, the brewer of Corona Extra, registered a 5.6% growth (to 6.0 million hl) in the domestic shipment of beer. Even exports were up 6.2% to 1.96 million hl in spite of the high base of comparison from the first quarter 1999 which grew 42.7%.
Carlos Fernández, Grupo Modelo’s CEO, declared: "We expect that this growth trend will increase in the following months, since the sales of our products in the North American market are still growing above the import beer category."
With domestic sales reaching 4.2 billion pesos and exports 1.4 billion pesos, total net sales were 6,17 billion pesos (US$ 646.6 million), an increase of 8.1% reflecting the price increase implemented at the beginning of the year. Operating income was 1.5 billion pesos (24..

Bavaria, one of Colombia’s largest listed company, bought a 45% stake in its domestic competitor Leona, thus fending off the threat of a powerful international brewer entering the Colombian beer market. Leona was operating at 25% of installed capacity and had about 8% of the market.
The deal gives Bavaria access to Leona’s modern brewery and paves the way for a large-scale restructuring of the industry which has been plagued by overcapacity, made worse by an economic downturn, for some time now. In return for the stake Bavaria will issue shares to the Ardila Lülle group, the owner of Leona. No value for the deal was given but it is believed that Bavaria could pay about US$100 million for the stake..