Skip to comments.Budweiser brewer AB Inbev sees sharp profit drop
Posted on 05/07/2014 4:10:36 AM PDT by Olog-hai
The maker of Budweiser and Stella Artois beer says its first quarter net profit slumped by almost 24 percent despite rising sales volumes.
AB InBev SA, the largest global brewer, said Wednesday net profit fell to $1.4 billion in the January through March period from $1.8 billion in the same quarter a year earlier.
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Well duh, they sold out to the Dutch, and AMERICANS don’t appreciate that.
And the beer is crap. Young people don’t appreciate bad beer
Young people have flocked in droves to microbrews and home brewing. I worked with a handful of guys younger than me (I’m 34), and the home brew/micro craze is unreal.
Budweiser is going to end up like Schlitz, Old Milwaukee, and PBR. Hell, even college kids these days are turning up their noses to Bud Light from a keg which is something I swore I’d never see in my lifetime.
The last guy I knew that drank Bud was a retired knee-deep sailor. Said he drank it because that was the one beer you could find anywhere in the world. But he passed five years ago; kinda thought AB would have noticed the decline in sales very shortly after his passing.
Belgium, not Holland.
The company says revenues rose to $10.6 billion from $9.2 billion last year. In the United States its beer sales grew by 2 percent to 27,000 hectoliters, representing about a quarter of global sales.
I'd guess the price of grain and trucking went up, just as our food and energy prices have..
Apart from selling out to foreign investors, could it be the 97 different flavors, styles, and nuances of beer they now sell?
Budweiser, Michelob, each in a full flavor and a lite. Worked for years.
Their response will be dumping employee healthcare to Obamacare.
Yes, likely a combination of factors: consumer tastes are changing as far as beer is concerned (more micro-breweries), certainly many commodity costs are rising.
But also, InBev can be accused of having a particular disregard for its own consumers. From 2012:
"And hes (InBev's CEO) risking the devotion of American beer lovers by fiddling with the Budweiser recipe in the name of cost-cutting."
The Plot to Destroy America's Beer:
They had more than 10% growth in gross sales over last year. That doesn’t indicate to me that tastes are changing.
When my 20 something boys come over, they always bring beers to sample and taste. They NEVER bring a Bud. I never drank Bud, but Bud has become Grandpa's beer.
Pabst Blue Ribbon has been revived as a hip PBR - because it is so cheap. I don't know how Bud survives or rebrands itself.
InBev has been busy for several years buying up many other regional or former micro-breweries. So, I'm not surprised that gross sales are up for the company holding that stock ticker.
Consumer tastes are changing, however...bad beer simply isn't tolerated the way it used to be. Otherwise they could just chug along and keep growing with witty light beer commercials alone like they used to.
And I should add: watering down their formula's soon after the purchase.
It encountered more resistance in 2005 when it closed the brewery in the Belgian village of Hoegaarden, from which the popular white beer of the same name flowed. InBev said it could no longer afford to keep the brewery open. After two years of protests by brewery workers and beer aficionados, it reversed itself. Laura Vallis, an AB InBev spokeswoman, says Hoegaarden exports spiked unexpectedly. The brands growth since is positive news for Hoegaarden and for consumers around the world who enjoy it, she says.
"Yet some Hoegaarden drinkers say the flavor of the beer changed. I think now its not as distinctive tasting, says Iain Loe, spokesman for the Campaign for Real Ale, an advocacy group for pubs and beer drinkers. You often see when a local brand is taken over by a global brewer, the production is raised a lot. If youre trying to produce a lot of beer, you dont want a beer that some people may object to the taste of it, so you may actually make the taste a little blander.
Mr. Coffee made a good cup. The key is to use 100% Arabica beans, and grind them just before brewing.
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Bud light is the top selling domestic beer. It alone sold more than the top 10 imported beers. Bud light could best be described as "non offensive" in that it doesn't taste like much of anything. It's sales has declined almost 1% in the last year. Scary? A sign of changing tastes? To put it in perspective if sales of bud light decreased by 50%...it would still be the top selling domestic beer.
A 1% dip is most likely the result of stale advertising, not Americans suddenly realizing that our most popular beer tastes more like water than beer.
“It’s sales has” wow...Apologies it’s like I slipped into poorly spelled Ebonics or something.
I blame Prohibition for the crappy taste of American mass produced beers. Prohibition wiped out the small local and regional brewers and only the large producers survived. When Prohibition ended the large brewers produced a lager style beer that could be brewed cheaply and in large quantities. Americans were happy just to have beer again and readily drank this swill. Mass marketing, the absence of affordable good beer alternatives and the beer industry becoming a concentrated oligopoly through mergers assured that American beers would remain watery and tasteless. The emergence and regional marketing of craft beers has changed the beer market and particularly younger consumers are now choosing craft beers over the mass produced product. I see the beer industry has evolved into two markets: The concentrated oligopoly of Anheiser InBev/SA Miller/Coors Molson and the monopolist competition market for craft beers.
Sam Adams is what my beer drinking family members choose.
Well they bought a NY brewery but I think that was only $40 or $50 million. That deal has to close by June. I also heard they are making 2 additional acquisitions but they have not yet been announced as far as I know.
Brings me back to St. Pat’s and the parade boycotts.
Hmmmm, I quit drinking last quarter! /kidding
It is a little ridiculous. Bud, Bud Light, Bud Light Lime, Bud Select, Bud Ice (did all the ice beers finally go away?), Bud Black, etc.
Do they still make Michelob Light? Mich Ultra is a big seller around here.
I enjoy a Stella every once in a while.
Yeah, but that is primary a west coast beer.
“Hamm’s the beer refreshing...Hamm’s the beer refreshing.”
“Brings me back to St. Pats and the parade boycotts.”
That it does. What a strange world we are living in.
My fellow freeping beer-drinker; here is what I actually typed in post 15:
"Consumer tastes are changing, however...bad beer simply isn't tolerated the way it used to be."
Which explains the growth of craft and microbrewed beer.
"Bud light is the top selling domestic beer. It alone sold more than the top 10 imported beers."
We are discussing a few different topics from net profit, to gross sales, to marketshare of an individual offering...I can go with that. Here's an interesting nugget from The Motley Fool from January:
"Consider the beer market numbers in recent years. Since 1999, beer's percentage of the total alcohol beverage market share has dropped 7% and has declined in four of the past five years. From 2007 to 2012 big beer has lost .03% of barrel market shares.
"Compare this to craft beer, which has seen a 10 % annual growth for craft beer in the same time period. According to The Brewer's Association, the trade group for craft beer, craft beer sales were up 6.5% by volume and 10.5% in dollars in 2012. The same stats through mid-2013 were up 15% and 17%, respectively. Not to put too fine a point on it, in a market that is contracting, all the growth is coming out of big beer's hide. And to add insult to injury, big beer is losing this business despite its huge ad expenditures. Craft breweries, on the other hand, spend almost nothing on advertising."
"Big beer might be able to convert some of their 20-pack customers to their premium beer category, but they are just cannibalizing existing product lines, which are already in decline. Sales of Budweiser, "The King of Beers," for example, declined 29% from 2007 to 2012."
That said, I agree that "big beer" isn't in danger of going under...but they are having to adjust to market conditions. It not as easy for them as before and consumers are likely now to be able to sniff out changes to recipes that InBev and others do in an effort to cut costs.
Full disclosure; I have NoDa Hop Drop and Roll IPA as well as Miller High Life Lite in my garage fridge. One is for cutting the yard and the other isn't. OK, all this has made me thirsty...Cheers!
Bud Lite. Cheap junk that isn’t cheap. I’d drink even Busch before Bud, and prefer Guinness or Bells.
I get a chuckle out of the redneck beer PBR becoming the hipster beer. Is Old Mill next?
OK. Why don’t we compromise on ‘Spanish Netherlands’ then?
“I get a chuckle out of the redneck beer PBR becoming the hipster beer.”
The Budweiser brand is wildly popular overseas. The “beauty” of Budweiser is that it tastes the same wherever you buy it around the world, as AB/InBev imports the water for brewing so the taste is consistent. This was AB’s claim to fame when I took their brewing school at Busch Gardens years ago.
I think their biggest problem is that they’re trying too hard. You see how many products on which Budweiser slaps their name? Bud, Bud Light, Michelob, Michelob Light, Ultra, Shock Top, Bass, Boddingtons, Goose Island, Rolling Rock, Stella, Busch, Kirin... these are all Budweiser-owned brands. They try to soak up markets by inject themselves into them, but they only serve to dilute the purity of certain beers types (i.e. lagers, ales, porters, stouts, etc.) and piss off the hipsters.
I’ll take a Bud Light after a long day working outside, because I know the taste I’m going to get is the same. A lot of the micros and specialty brews I’ve had are inconsistent on the palate.
Interesting the American Dream is being replaced by Socialism here at home, and the American Dream isn't selling in America.