Coors‘ 1999 record sales

For the year ended 26 December 1999, Adolph Coors Company recorded net sales of US$2.06 billion, an 8.3% increase from 1998. Including special items, 1999 net income was US$92.3 million. Beer output was 21.9 million barrels, up 3.6%. The result benefited from an improved industry pricing environment, lower packaging material costs and strong fourth quarter category growth. The company however anticipates additional cost pressures during 2000 from higher packaging material prices, increased consumer demand for long-neck bottles, higher freight costs and increased media spending.

Golden parachute

He must be crying all the way to the bank. Douglas Ivester, Coca-Cola’s former chairman, took early retirement and left the company with a separation package valued at US$17.7 million. Coca-Cola also released US$16.8 million in restricted stock that he otherwise would have lost under the company‘s early retirement plan. Mr. Ivester, 52, who had held the top job for a little more than two years, stepped down after members of the board told him that they had lost confidence in him. Although he had been with the company for over 20 years, it is widely believed that Mr. Ivester mishandled a series of crises and showed reluctant to carry out a large-scale restructuring programme. Mr..

Ceasefire

Kaiser and AmBev have agreed to suspend their heated advertising campaigns against one another. Both companies decided to end their media attacks, kicked off by the merger of Brahma and Antarctica, after a meeting with the Minister for Development, Industry and Trade, Alcides Tapias. The Minister said that he had wanted to tone down media exposure on the AmBev case in order not to interfere with Cade’s (the government’s anti-trust body) future decision over the merger which will be announced in April. AmBev’s co-presidents Marcel Telles and Victorio de Marchi are still confident that the merger will be approved. Both agree that there should be some restrictions, such as separate distribution networks and selling some units in regions where the two brewers dominate the market..

OK, but sell Skol

AmBev, the company formed by the merger of the brewers Antarctica and Brahma, has received a preliminary approval by Brazil’s regulatory body, the Finance Ministry’s Economic Monitoring Secretariat.
However, there are some restrictions: the closure of several breweries, the review of the licensing agreement between Brahma and Miller, the sale of the Skol brand. These restrictions were suggested to prevent AmBev’s three main brands to gain a market monopoly of more than 65% in the country’s regional markets. Antarctica and Brahma together produce 64 million hl of beer and 2.5 billion litres of soft drinks. AmBev lodged an official protest and is hopeful that it will receive the final regulatory approval without having to comply with the restrictions..

Cyber marketing

Hugo Powell, the veteran marketer behind Labatt’s Ice Beer and recently elected President and Chief Executive of Interbrew SA, believes that the explosive growth of the Internet - it already has a 39 per cent penetration in U.S. homes and is expected to rise to 61 per cent in five years - will further the market fragmentation that has become the marketer’s nightmare. What makes matters worse is that the Internet users are disproportionately the younger, well-educated and wealthy groups that advertisers are trying to reach via mature media such as television. "Television for these people is Internet", Mr Powell declared.

Bud to be imported

In January, Anheuser-Busch’s Budweiser has returned to the supermarket shelves due to a contract signed between Anheuser-Busch and Brazil’s Expand Group, a large importer of beverages, including wines. Under the terms of the agreement, Budweiser will be imported from the US as well as from Argentina. In neighbouring Argentina the beer is produced under licence by a subsidiary of Chile’s CCU. At the end of December the Antarctica brewery’s production and distribution agreement with Anheuser-Busch officially ended. The termination of the contract had been announced in July nearly at the same time the Antarctica-Brahma merger was made public.

World drinks market growing by 3% per year

In the past five ears, worldwide consumption of drinks has risen annually by 3% to 201 litres per person in 1998, according to a most recent study from Zenith World Drinks Service International, Bath/UK.
North America is leading with a commercial beverage consumption of 671 l ahead of West Europe with 601 l. Latin America and East Europe reach less than half of this level, and Africa, the Middle East and the Asia Pacific region less than a quarter. However, Asia Pacific has a share of 31.5% of total volume, compared with 20% for West Europe and 17% for North America.
Hot drinks remain the most popular group of beverages with a 40% share, followed by soft drinks (30%), then alcohol and milk drinks (around 15% each)..

Siebel Institute reorganises

All courses, programs and other educational activities conducted by the Siebel Institute of Technology have ceased effective January 14, 2000.
William R. Siebel, the President, is talking to several groups, including the faculty, who are exploring ways to reorgazine the Institute with plans to reopen and resume courses by March 20.
The Siebel Institute was the last of the founding US brewing schools of the 1800’s which previously included Schwarz, Wallerstein and Wahl Henius. It was also the last remaining major brewing school in the world that does not receive either government or industry support.
In his announcement, Bill Siebel wrote that "the industry has undergone many changes over the last few years.".

The price is right

Coca-Cola Co. has quietly begun testing a vending machine which can automatically raise prices in hot weather, taking full advantage of the law of supply and demand. All you need is a temperature sensor and a computer chip and companies can pair daily and hourly fluctuations in demand with fluctuations in price, even if the product is only a can of soda. Vending machines have become an important source of profits for Coca-Cola and PepsiCo as they have remained largely untouched by the price wars affecting supermarket sales. In Australia and in North Carolina, Coke bottlers use vending machines to relay information, either via wireless signal or telephone lines, which drinks are selling and at what rates in a particular location.

Big spenders

On 30 January, an estimated 135 million viewers will be glued to the screen to watch the Super Bowl. For the past 12 years Anheuser-Busch has been the game’s exclusive beer advertiser. Busch has reportedly bought 10 minutes of advertising as the Super Bowl is the greatest advertising platform in the U.S. The advertising blitz costs the St. Louis brewer an estimated US$40 million (or US$2 million for a 30 second spot). Miller Lite, on the other hand, is seeking exposure on another screen on game day. Miller Brewing is sponsoring www.superbowl.com, the National Football League’s web site for the day, which at US$1 million must be considered a sponsoring bargain. Miller will promote the web site on sports programming and through TV, print, radio and outdoor advertising before the game.