Washington - The world's largest beer company, which
makes Bud Light, Becks and Stella Artois, is investing $2 billion in American
brewing operations over the next four years.
Anheuser-Busch, which has been aggressively buying up
craft breweries to make up for its flat sales, said the investment is part of
an ongoing effort to expand in the United States, where craft beer sales have
eclipsed Budweiser sales for four years running.
The money - which includes about $500 million in investments
this year - will go toward building new distribution facilities in Los Angeles
and Columbus, Ohio, and to improve existing breweries in Houston, St. Louis and
Fort Collins, Colorado. Although the money will not be used to acquire
additional craft breweries, executives said it would be used to expand brewing
facilities for craft beer brands the company already owns.
"This is a vote of confidence in the future of
American brewing," Joao Castro Neves, president and chief executive of
Anheuser-Busch, said in an interview. "We are doing our part to make the
beer industry more sophisticated, complex and compelling to our
consumers."
The investment comes five months after Belgium-based
Anheuser-Busch InBev purchased SABMiller, the maker of Fosters, Miller and
Pilsner Urquell. The $107 billion deal brought together the world's two largest
brewers to create a combined company with roughly 500 beer brands and an
estimated $55 billion in annual sales.
Reassuring
Now executives are saying it's time to reassure Americans
that the company remains focused on the US market, where its customers are
increasingly opting for locally produced craft brews over mass-produced
brands."It was important to double-down on the US market after the dust
settled from the SABMiller acquisition," Neves said. "We are starting
to see upticks [in sales], but we definitely have not turned the corner
yet."
Neves said the company's latest investments were not
motivated by President Trump's pro-America business policies - "Beer is
bipartisan," he wrote in an email - and did not say whether the company
was receiving any tax breaks or incentives related to the investment. Almost
all of the beer the company sells in the US - 98 percent - is made in its 21
American breweries.
Last summer Anheuser-Busch attracted its share of
ridicule when it replaced the Budweiser logo on beer bottles and cans with the
word "America." The show of patriotism was meant to win over
millennials, but instead drew attention to the fact that the brand is owned by a
European company. (A recent survey found that 44 percent of 20-somethings have
never tried Budweiser.)
undefined"Frankly, Budweiser calling itself 'America' is the
most un-American thing I've observed in quite a while," Will McCameron,
co-owner of Brewery 85 in South Carolina, wrote in a blog post. "They're
doing it because they're losing market share to craft beer faster than the
Golden State Warriors imploded in the 2016 NBA finals."
"Budweiser is about as American these days as a
successful Green Party or ample paid maternity leave," added beer writer
Tom Acitelli in The Washington Post. "So many other, smaller - and when it
comes to flavor, better - beers scream 'America' much more loudly."
Earlier this month, Anheuser-Busch announced it had
bought its 10th craft brewery: Wicked Weed Brewing in Asheville, North
Carolina. Other recent acquisitions include Karbach Brewing in Texas, Devils
Backbone Brewing Co. in Virginia and Blue Point Brewing Co. in New York.
"They want to send a very strong signal that even
though they're the biggest beer producer in the world, they remain committed to
the US," said Robert Ottenstein, an analyst for Evercore ISI. "It's a
very important market for them, so this isn't a surprise."
Craft brewers like Bryan Brushmiller, who owns Burley Oak
Brewing in Berlin, Maryland, say it's become harder to stay afloat as
Anheuser-Busch gets bigger.
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"There's definitely a monopoly," said
Brushmiller, who opened the brewery six years ago. "They're taking over
distribution and, whether they mean to or not, they're hurting smaller
breweries like us."
It's become increasingly difficult, he said, to find hops
and barley as larger companies buy entire fields at discount prices. It's also
become more challenging, he said, to compete with regional breweries that get
acquired by the likes of Anheuser-Busch.
"All of a sudden, you'll walk in and the IPA on tap
is half the price," he said. "Once they're part of a corporation,
they can offer lower prices. It's just basic business."
In all, Anheuser-Busch plans to have invested $4.5
billion in the US between 2011 and 2020. But will that be enough to win over
Americans again? Eric Shepard, executive editor of industry publication Beer
Marketer's Insights, says it's too soon to tell.
In 2016, he estimates, Anheuser-Busch shipped 13.2
million barrels of Budweiser in US, compared to 23.4 million barrels of craft
beer. A decade earlier, the numbers looked starkly different: 24.2 million
barrels of Budweiser, and 7.7 million barrels of craft beer.
"Mainstream brands have been challenged for well
over a decade now," he said. "Craft continues to grow and Bud
continues to decline. Whether Anheuser-Busch can get those sales back or not, I
don't know."