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Budweiser brewer AB Inbev sees sharp profit drop
Associated Press ^ | May 7, 2014 4:16 AM EDT

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. …

(Excerpt) Read more at hosted.ap.org ...


TOPICS: Business/Economy; Chit/Chat; Food; Miscellaneous
KEYWORDS: beer; budweiser; inbev; profitdrop

1 posted on 05/07/2014 4:10:37 AM PDT by Olog-hai
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To: Olog-hai

Well duh, they sold out to the Dutch, and AMERICANS don’t appreciate that.


2 posted on 05/07/2014 4:22:07 AM PDT by BobL
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To: Olog-hai

And the beer is crap. Young people don’t appreciate bad beer


3 posted on 05/07/2014 4:36:09 AM PDT by FatherofFive (Islam is evil and must be eradicated)
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To: FatherofFive

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.


4 posted on 05/07/2014 4:45:49 AM PDT by rarestia (It's time to water the Tree of Liberty.)
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To: Olog-hai

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.


5 posted on 05/07/2014 4:55:08 AM PDT by WinMod70
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To: BobL

Belgium, not Holland.


6 posted on 05/07/2014 4:59:59 AM PDT by PAR35
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To: WinMod70

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.


Read past the headline. Sales have not declined.


7 posted on 05/07/2014 5:09:21 AM PDT by PeterPrinciple
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To: PeterPrinciple
It's interesting that they are selling more beer, and grossing more money but had a "profits" slump. Did their taxes go up? Did they have an unexpected capital expenditure? There is more to this story than meets the eye. Remember when even hack journalists covered the basic questions?

8 posted on 05/07/2014 5:23:25 AM PDT by Durus (You can avoid reality, but you cannot avoid the consequences of avoiding reality. Ayn Rand)
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To: Durus
Did their taxes go up? Did they have an unexpected capital expenditure?

I'd guess the price of grain and trucking went up, just as our food and energy prices have..

9 posted on 05/07/2014 5:26:59 AM PDT by IamConservative
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To: Olog-hai

Apart from selling out to foreign investors, could it be the 97 different flavors, styles, and nuances of beer they now sell?

Just sayin’

Budweiser, Michelob, each in a full flavor and a lite. Worked for years.


10 posted on 05/07/2014 5:37:41 AM PDT by PubliusMM (RKBA; a matter of fact, not opinion. 01-20-2016; I pray we make it that long.)
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To: IamConservative

Their response will be dumping employee healthcare to Obamacare.


11 posted on 05/07/2014 5:39:11 AM PDT by DownInFlames
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To: Durus
"There is more to this story than meets the eye."

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 he’s (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:

http://www.businessweek.com/articles/2012-10-25/the-plot-to-destroy-americas-beer

12 posted on 05/07/2014 5:41:06 AM PDT by Sam's Army
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To: Sam's Army

They had more than 10% growth in gross sales over last year. That doesn’t indicate to me that tastes are changing.


13 posted on 05/07/2014 5:50:17 AM PDT by Durus (You can avoid reality, but you cannot avoid the consequences of avoiding reality. Ayn Rand)
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To: rarestia
I worked with a handful of guys younger than me (I’m 34), and the home brew/micro craze is unreal.

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.

14 posted on 05/07/2014 6:10:11 AM PDT by FatherofFive (Islam is evil and must be eradicated)
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To: Durus
"They had more than 10% growth in gross sales over last year.That doesn’t indicate to me that tastes are changing."

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.

15 posted on 05/07/2014 6:15:29 AM PDT by Sam's Army
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To: Olog-hai


Sales of Hamm's up as economy continues it's slow train wreck into oblivion!
16 posted on 05/07/2014 6:31:31 AM PDT by Jack Hydrazine (Pubbies = national collectivists; Dems = international collectivists; We need a second party!)
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To: Olog-hai

17 posted on 05/07/2014 6:33:05 AM PDT by FlJoePa ("Success without honor is an unseasoned dish; it will satisfy your hunger, but it won't taste good")
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To: Sam's Army
"InBev has been busy for several years buying up many other regional or former micro-breweries."

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 brand’s 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 it’s 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 you’re trying to produce a lot of beer, you don’t want a beer that some people may object to the taste of it, so you may actually make the taste a little blander.”

http://www.businessweek.com/articles/2012-10-25/the-plot-to-destroy-americas-beer#p2

18 posted on 05/07/2014 6:41:51 AM PDT by Sam's Army
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To: FatherofFive
Young people don’t appreciate bad beer

Young people are beer snobs. And coffee snobs for that matter.

I developed a taste for what they would regard as "crap beers" while going through times where it was all I could afford. I can afford better now, but drinking them gives me some wistful sense of both nostalgia and accomplishment.

The day is coming when none of these young people will be able to afford seven dollar lattes. They'll learn how to throw some Chase and Sanborn in a Mr. Coffee Dripmaster and like it.


19 posted on 05/07/2014 6:53:21 AM PDT by Buckeye McFrog
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To: Buckeye McFrog
They'll learn how to throw some Chase and Sanborn in a Mr. Coffee Dripmaster and like it.

Mr. Coffee made a good cup. The key is to use 100% Arabica beans, and grind them just before brewing.

20 posted on 05/07/2014 7:11:34 AM PDT by FatherofFive (Islam is evil and must be eradicated)
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To: Olog-hai
Only sold in Illinois and Indiana at this time.

www.Veteranbeercompany.com

Mission

The Veteran Beer Company is dedicated to providing lives of quality for military Veterans through the creation of meaningful post-service careers. The company will produce, sell, and deliver beers of superior quality, striving to employ Veterans in every role within the organization and the supply chain while adhering to the highest principles of military service, conducting business with integrity, courage, and loyalty.

21 posted on 05/07/2014 7:28:59 AM PDT by Hoboken (truth)
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To: Sam's Army
Bad beer isn't tolerated? Bad beer rules sales. The top 10 selling domestic beers sold in 2013 are all what I consider either bad or really bad beer.

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.

22 posted on 05/07/2014 8:02:50 AM PDT by Durus (You can avoid reality, but you cannot avoid the consequences of avoiding reality. Ayn Rand)
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To: Durus

“It’s sales has” wow...Apologies it’s like I slipped into poorly spelled Ebonics or something.


23 posted on 05/07/2014 8:13:44 AM PDT by Durus (You can avoid reality, but you cannot avoid the consequences of avoiding reality. Ayn Rand)
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To: Olog-hai

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.


24 posted on 05/07/2014 8:27:12 AM PDT by The Great RJ
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To: The Great RJ

Sam Adams is what my beer drinking family members choose.

http://www.boston.com/lifestyle/food/blogs/99bottles/2013/09/samuel_adams_founder_jim_koch_now_a_billionaire.html

.


25 posted on 05/07/2014 8:50:52 AM PDT by Mears
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To: Durus

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.


26 posted on 05/07/2014 9:13:35 AM PDT by Georgia Girl 2 (The only purpose o f a pistol is to fight your way back to the rifle you should never have dropped.)
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To: Mears

Brings me back to St. Pat’s and the parade boycotts.


27 posted on 05/07/2014 11:52:35 AM PDT by Olog-hai
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To: Olog-hai

Hmmmm, I quit drinking last quarter! /kidding


28 posted on 05/07/2014 11:55:39 AM PDT by Fledermaus (Conseravtives are all that's left to defend the Constitution. Dems hate it, and Repubs don't care.)
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To: PubliusMM

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.


29 posted on 05/07/2014 11:58:01 AM PDT by Fledermaus (Conseravtives are all that's left to defend the Constitution. Dems hate it, and Repubs don't care.)
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To: Jack Hydrazine

Yeah, but that is primary a west coast beer.

“Hamm’s the beer refreshing...Hamm’s the beer refreshing.”


30 posted on 05/07/2014 11:59:19 AM PDT by Fledermaus (Conseravtives are all that's left to defend the Constitution. Dems hate it, and Repubs don't care.)
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To: Olog-hai

“Brings me back to St. Pat’s and the parade boycotts.”

That it does. What a strange world we are living in.

.


31 posted on 05/07/2014 12:48:50 PM PDT by Mears
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To: Durus
"Bad beer isn't tolerated? Bad beer rules sales."

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."

http://www.fool.com/investing/general/2014/01/06/the-story-of-craft-beers-growth-and-how-it-boosts.aspx

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!

32 posted on 05/07/2014 1:20:56 PM PDT by Sam's Army
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To: Olog-hai

Bud Lite. Cheap junk that isn’t cheap. I’d drink even Busch before Bud, and prefer Guinness or Bells.


33 posted on 05/07/2014 1:25:14 PM PDT by Darren McCarty (Abortion - legalized murder for convenience)
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To: FatherofFive

I get a chuckle out of the redneck beer PBR becoming the hipster beer. Is Old Mill next?


34 posted on 05/07/2014 1:28:08 PM PDT by Darren McCarty (Abortion - legalized murder for convenience)
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To: PAR35

Picky.


35 posted on 05/07/2014 3:40:46 PM PDT by BobL
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To: BobL

OK. Why don’t we compromise on ‘Spanish Netherlands’ then?


36 posted on 05/07/2014 4:46:42 PM PDT by PAR35
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To: Darren McCarty

“I get a chuckle out of the redneck beer PBR becoming the hipster beer.”

https://www.youtube.com/watch?v=4N3iVHxP8FQ


37 posted on 05/07/2014 4:52:35 PM PDT by PAR35
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To: PAR35

LOL...I guess.


38 posted on 05/07/2014 4:57:52 PM PDT by BobL
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To: FatherofFive

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.


39 posted on 05/08/2014 4:55:54 AM PDT by rarestia (It's time to water the Tree of Liberty.)
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To: rarestia
Executives say the brand's global "Grab Some Buds'' marketing campaign launched in 2010 is translating well abroad, part of a game plan to sell what they call "the American Dream in a bottle'' by celebrating optimism.

Interesting the American Dream is being replaced by Socialism here at home, and the American Dream isn't selling in America.

40 posted on 05/08/2014 6:15:38 AM PDT by FatherofFive (Islam is evil and must be eradicated)
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