Budweiser can't just blame coronavirus for its lager-pocalypse (blame Corona, too)
Not a Stella quarter... AB InBev — the owner of beer legends Budweiser, Stella Artois, Becks and Goose Island — announced that its profits plummeted 75% last quarter to $114M. Shares fell over 9% on the buzz-kill earnings from Earth's largest brewer. Here's the biggest drama:
- Classic Americana Budweiser is now losing share in its largest market: The US.
- And sales of labels Budweiser and Bud Light have been hit hardest.
Shoulda gone harder on seltzer... AB's "share of throat" (that's actually what they call it in the beverage biz) has declined significantly as Americans move away from beer to on-trend drinks. Specifically, Bud's admitted that it's getting hit by hard seltzer.
- Seltzer market share has grown over 3X since a year ago, now making up 2.6% of all US alcohol sales.
- Bud tried to get in on the party with Bon & Viv seltzer (acquired in 2016), Natty Light Seltzer (launched in August), and finally Bud Light Seltzer (launched in January).
- But even with Bud Seltzer (and its Post Malone-starring Super Bowl ad), AB was too late — it's still lagging competitors.
Bud can't acquire its way out of this one... The last time Big Beer was under threat it was from craft beer. Beer giants (including AB-InBev) acquired a bunch of IPA/craft ales to protect themselves. This time, the threat is hard seltzer, but the disruptors are already too big to buy. Boston Beer Co's Truly and Mark Anthony Brands's White Claw dominate the market (about 85% of hard seltzer). AB will have to leverage its 3 existing seltzers instead.