Anheuser-Busch’s announcement that beer shipments increased in 2007 and in the most-recent quarter sent its stock soaring. Prices rose 5% after the report.
Although A-B’s shipments increased by 2% during the year most of the growth was in imports. A-B’s core brand shipments increased by 0.3 percent.
The overall growth was “due to the success of our initiatives to broaden the company’s beer portfolio,” said August A. Busch IV, chief executive, in a statement. The wider portfolio and a planned increase in marketing to accelerate core beer sales “position Anheuser-Busch for growth in volume and earnings” this year, he said.
Sales from distributors to retailers grew 1.3% for the full year and fourth quarter of 2007, adjusted for the number of selling days. But after acquired and imported brands were subtracted out of the equation, sales of core brands actually fell.
“Momentum remains elusive for A-B,” said Mark Swartzberg, an analyst with Stifel, Nicolaus & Co., in a research note Monday. “Core brands have yet to produce sustained growth.”
2008 will surely be the year of the merger, or the acquisition. A-B continues to pool resources to (1) acquire brands in order to buffer their slow decline; and (2) develop more below-standard “craft-style” beers in a vain attempt to dumb down the category and negatively influence consumer perception of Craft Beer. SABMiller continues its defense-posturing by merging with Coors, buying Grolsch, and gobbling up just about every brewery available in the “third world.” I’m curious to see who will be left standing when the dust finally settles. I know I’ll be standing, and hoisting a glass of Jolly Pumpkin Oro de Calabaza, or Oskar Blues Gordon, or Troegenator, or Celis Grand Cru. Or perhaps something from Victory Brewing would make more sense, you know on a symbolic level. But I digress…
I think A-B has pretty much saturated the available markets with BUD. So unless they find that beer cures cancer they are pretty much stuck as far as growth goes. Still with over 50% of the US beer business they can’t be hurting. I would buy back all my stock, not worry about Wall Street and just concentrate on the beer. Just like the craft beer folks do. I say this while sipping on a St Arnold.