According to yet another business article in Forbes, the reason for Anheuser-Busch‘s sales declines are the result of a lack of focus on their core brands, principably Budweiser and Bud Light. And while wine, spirits and craft beer’s rise has been credited with A-B’s decline, this AP article also claims Molson Coors — the #3 American brewer — has also gained ground against their nemesis, largely because they’ve continue to push their core brands. A-B has already suggested they’ll be increasing marketing by at least 8% and the details of this and a renewed focus on their flagships are expected to be revealed at A-B’s bi-annual Investor Day this Tuesday.
Goldman Sachs analyst Judy Hong further advised that what A-B needs to do to remain competitive is “either purchase a large craft brewer or work with distiller Fortune Brands Inc. to buy the Swedish state-owned liquor group that makes Absolut vodka, V&S Vin & Spirit AB, to gain access to the growing spirits market.” On the other hand, William Pecoriello, an analyst at Morgan Stanley, thinks A-B is on the right track, spending more marketing dollars on their core brands. In a memo to clients, he stated “[i]t seems unlikely that Anheuser-Busch can overcome the challenges for its core brands without significant increases in marketing, distribution and administrative spending.”
The troubling pronouncement in of all of this is Hong’s suggestion that A-B “purchase a large craft brewer.” It’s not like they haven’t been trying to do just that for some time now, but when Wall Street raises the spectre of it as a worthwhile idea, people tend to sit up and take notice.