Friday, December 01, 2006

A-B Trades Up for Wholesalers

Anheuser-Busch's exclusive wholesaler network raised their collective Budweiser last night and saluted an overseas adversary, InBev, for granting their Christmas wish.

Elsewhere, wholesalers left to peddle Miller, Coors and anything else they can get their hands on must have felt like taking the lump of coal they were just dealt and shoving it up a Clydesdale's arse.

In a move that has been rumored and discussed at length, Belgian brewing giant InBev agreed to allow Anheuser-Busch to distribute their brands in the United States. And while the added volume is but a drop in the leading domestic brewer's overall glass, the move further strengthens their ability to provide a wider spectrum of beverage choices for a wider spectrum of beverage occasions. From Natty in the Carolinas to Stella in Manhattan, Anheuser-Busch can answer your call for suds.

There are some challenges...which will discuss in a moment. But on the positive side, the wholesalers must be ecstatic! Higher margin imports...and a competitive 'green bottle' to challenge Heineken...mean happy days ahead. Take a look at what an A-B wholesaler will be able to offer an account in the coming months: Stella, Becks, Bass, Tiger, Harbin, Kirin, Rolling Rock, Widmer, Goose Island, Grolsch, Red Hook and Kona...not to mention the giant roster of domestic beers, including the Budweiser, Michelob & Busch brand families. Couple this with their Innovation Group, which is has recently introduced two organic beers (Stone Mill Pale Ale, Wild Hop Lager), launched a seasonal program (currently featuring Winter's Bourbon Cask Ale), and a number of malt-based beverages like Spykes & Peels and you're witnessing the revolution of an American company from brewer to global beverage company.

All this is great from a volume stand point, but there are still a few issues. One, we're still living in a spirits culture. August Busch IV has hinted that he's willing to take the spirits and wine manufacturers head-on, either through acquisitions or the development of their own wine & spirits brands. After all...brewing and distilling aren't that different, well, at least the process isn't.

Another issue is managing all these brands and keeping them all top of mind amongst wholesalers. InBev didn't ink this deal so A-B's wholesalers could fall in love with Stella and disregard the others. Much like Busch, Budweiser and Michelob, who have have been in decline since the rise of light beers, InBev's premium beers like Beck's & Bass could suffer from overwhelmed wholesalers and limited funds to market these brands correctly at the local level.

All in all, it's a very impressive move and could elevate A-B to a true global player. AABIV has made his first big splash...lets see if he can keep up the momentum.

Cheers. SPB