Buz Investors Microbrewery Competition An explosion in craft beers and microbrewery options is negatively affecting industry pricing and profitability. AB InBev has dramatically increased its debt position with the SABMiller acquisition in late 2016.
Market Trends

$BUD Craft Beer and Microbrewery Competition

Beer And Liquor Stocks Not Feeling So Good? Ask AB InBev

Buz Investors Microbrewery Competition An explosion in craft beers and microbrewery options is negatively affecting industry pricing and profitability. AB InBev has dramatically increased its debt position with the SABMiller acquisition in late 2016.

 

Buz Investors Microbrewery Competition An explosion in craft beers and microbrewery options is negatively affecting industry pricing and profitability.

AB InBev has dramatically increased its debt position with the SABMiller acquisition in late 2016.



Other Stories Buz Traders Follow

Microbrewery Competition

Future challenges for the alcoholic beverage industry include a rising U.S. Dollar value, trade protectionism risks, and spiking interest costs on debt.

Weak stock trading momentum in BUD since September is a worrisome development for shareholders.

Anheuser-Busch InBev SA/NV (NYSE:BUD) is the world’s largest brewer. Headquartered in Belgium, AB InBev became even bigger this past October when it completed the acquisition of SABMiller assets. Buying mostly African and Latin American properties and revenues, the company now claims 7 of the 10 most valuable beer brands on planet earth. A result of stagnating volumes and sales in America and Europe, AB InBev figures its best chance to grow shareholder value is through cost-cutting in SABMiller‘s supply chain. Another desirable side effect is the elimination of an important competitor and related pricing pressures on its core product offerings. The main profit restraining issue the entire “established” liquor and beer industry faces today is the rise of microbreweries and craft beer acceptance globally by drinkers.

READ  $TSLA Stock Gains 33% Since Trump Victory

Craft Beer and Microbrewery Competition

Craft beers and smaller breweries have exploded in numbers starting in the 1980s. Below is a good chart to ponder, showing the number of companies making beer the last century. Falling from 2000 in the late 1800s to just 89 during 1979, several large beer companies like Anheuser-Busch had tight control over U.S. price competition. However, the number of beer production businesses in America has exploded above 3000 into 2017, according to the Brewers Associatio

Millennials and younger consumers are gravitating toward local beer options as a first choice, hurting alcohol demand at the big boys like AB InBev. The existing company before the SABMiller purchase actually witnessed a drop in volumes sold across much of the world in 2016 vs. 2015, as new entries take market share. This trend of stagnation in demand has been going on for many years at the large beer and spirits corporations. They have been raising profitability levels basically by controlling costs and trying to push through price increases whenever possible. However, price increases are not easy to hold as competition from local brewers heats up. Here is a Goldman Sachs video on the growth of craft beers, and their expectation of such spreading globally, at the same time as wineries and spirits production/competition seems to be headed into overdrive.

READ  Australian AIG performance of services index climbed

 


Tech Stocks ( GOOG)   (MSFT ) ( AAPL ) (BBRY ) ( gopro )  ( WDC )




Click here for reuse options!
Copyright 2017 Investors Buz
Jadtecnic
Richard Dambrosi (JADTECNIC) Has Been Sharing Forex Analysis Trending Markets News since 2011. Editors and Founder of InvestorsBuz.com , has a passion for Forex Social Sharing analysis and Market Trends Such as Self Driving Cars , Electric Cars, Medical Marijuana , 3d printing and Cloud computing , Refers to Readers as BUZ INVESTORS.

Leave a Reply