A-B sees good demand; will raise prices

November 30th, 2007 | Posted by Real Beer

Anheuser-Busch will continue raising prices to counter a rise in the cost of ingredients, Chief Financial Officer W. Randolph Baker told a group of stock analysts at a conference in New York.

Baker hit several optimistic notes in his presentation, including an apparent increase in consumer interest for domestic beers. He said beer industry growth in 2007 has continued to exceed expectations, up 1.8% to date.

“We see the resurgence in interest in beer. With the momentum there, it’s likely you’re going to have strong demand for beer,” Baker said.

The St. Louis Post-Dispatch has in depth analysis of A-B’s standing the market and plans for the future. Some highlights:

- The top priority is boosting Bud Light, the company’s best-selling brew. The beer has “under­performed” this year.

- Bud Light and Budweiser will get an extra $70 million in television ad support next year.

- A new Michelob campaign will account for another $30 million.

- Fewer brands will be advertised on television.

- The average A-B distributor now handles 147 brands, more than double from five years ago.

- Analysts said the nearly-flat sales volumes for A-B’s main brands — even as the overall industry is growing at a strong clip — is a cause for worry. Bud Light, for one, is losing market share to Coors Light and its “cold” marketing message, said analyst Mark Swartzberg of Stifel, Nicolaus & Co.

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3 Responses to “A-B sees good demand; will raise prices”

  1. Fred Says:

    Bud Light losing sales to Coors Light because of a marketing campaign. That makes sense since neither has a taste to recommend it.

  2. P-Train Says:

    I agree Fred.

    How does “colder” beer taste better? The colder the beer the less your taste buds can pick up on it.

    Leave it to the masses to pick Coors over Bud Light over commercials stating its coldness.

    You know what I say? Let them have all they want of either.

  3. cole Says:

    AB and Coors will tell you the same thing: It’s a numbers game. I agree. The more people that start brewing their own beer, the more microbreweries will be formed. The greater the selection available to the masses, the greater the share of the market not available to AB & Coors.
    I guess that means they will have to make better beer. Hooray real Beer!