Santa Claus or Christmas?

Genesee Corp., the US’s number five brewer, announced that the management buy-out of its Genesee Brewing Co., led by Chief Executive Samuel Hubbard Jr., would not be completed until December as the buyers needed more time to complete financing. The shares of Genesee subsequently fell US$ 2.25 to US$ 34 in over-the-counter trading. Shares so far have declined 81 % this year.

Word of wisdom

In a recent feature in the Australian edition of Reader’s Digest, Jim Koch, self-styled "Creator of the first craft-brewed American beer", Samuel Adams, gave the following invaluable advice to young entrepreneurs: "Life is very long, so don’t rush to make decisions. Life does not let you plan." Is that what he learned while working for the Boston Consulting Group?

Energy Beer

Did we really need that? Gluek Brewing, formerly Cold Spring Brewing Co. of Cold Spring Minnesota, has announced that it would launch a brand, Hard E, which is supposedly the world’s first "hard energy beer". The malt beverage contains ginseng extract, vitamins A, B, & C, and has a citrus taste.

Gobbling them up

Brazilian AmBev will pay US$ 47 million for the Uruguayan brewer Cerveceria y Malteria Paysandu, which would double AmBev’s stake in the market to 48 %. Only in September, AmBev had bought Uruguay’s brewer Compania Salus in a joint deal with the French group Danone. AmBev will control a 95.3 % stake in Paysandu which produces the Nortena and Prinz brands, and whose brewery has a capacity of 300,000 hl. The malting facility has a capacity of 90,000 tons annually.

Sleeman to sell Beck’s in Canada

Listed craft brewer Sleeman has signed a sales, marketing and distribution agreement with Brauerei Beck to sell the German brewer’s premium beers in Canada. Financial details are not known. After the announcement of the deal, Sleeman shares closed 35 cents higher at CAN$6.50.

Investing in the market

Coca-Cola Co. announced that it would invest US$ 1 billion in the Brazilian market over the next two years. The investment will be used for marketing and social programmes as well as for the modernisation of plants and the increase of production capacity.

Whassup? Dunno

Fate happens and sometimes it ain’t bad. What happened was that an aspiring film-maker from Chicago, Charles Stone, 35, produced a three minute film, entitled "True" and showed it to an Irish campaign director at DDB Worldwide, Vinny Warren, 33, who had the account of "dad’s beer", Budweiser, at his hands and no clue as to how to rejuvenate the brand. After having watched Stone’s three guys sitting in a bar and talking nonsense, he had the idea to ring up St. Louis and tell the gentleman at the other end of the line: "Eh, whassup? We got your TV ad." Or so it must have happened because Anheuser-Busch liked the idea of buying a script that had not been written by an ad man and certainly not for promoting a beer brand. Well, it’s called life imitating art or rather ads.".

Molson buys back US brands

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..

Profits up, shares slip

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....

Designed to give you wings ...

... 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..