InBev, the world’s leading brewer, announced its results for the third quarter (3Q08) and 9 months (9M08) of 2008 on November, 6.

The third-quarter net income fell to 447 million euro from 519 million euro a year earlier and last year’s nine-month net income of 1,298 mln euro was reduced to 1,238 mln this year, InBev informed.

BRAND PERFORMANCE

The Belgian brewing giant said that out of more than 200 brands, it had decided to focus on those with greater growth potential within each relevant consumer segment. Those brands include the global brands Beck’s and Stella Artois and some of the multicountry and local beers that together account for about 60% of InBev’s total volume.

Year to date (to September), the company said its focus brands had significantly outperformed total and own beer sales, with volume growth of 4.4% (3Q08 total volumes grew 1.9% and own beer volumes 0.8%). Recent examples are Stella Artois in the US, Beck’s in Germany, Cass in South Korea, Budweiser and Bud Light in Canada, and Quilmes and Stella Artois in Argentina.

Stella Artois and Beck’s performed very well, growing 8.1%. Stella Artois volumes increased by 1.9%, as strong volume performance in the US and Latin America South ...More Info

Anheuser-Busch Cos. Inc. reported on November, 6 that third quarter 2008 net sales increased 6.5 percent and diluted earnings per share (excluding one-time items in both 2008 and 2007) increased 10.5 percent. For the nine months of 2008, net sales increased 5.7 percent and diluted earnings per share (excluding the one-time items) improved 8.9 percent.

“Anheuser-Busch had an outstanding summer selling season, with record sales in the third quarter,” said August A. Busch IV, president and chief executive officer of the company.

“Driven by the national introduction of Bud Light Lime, U.S. beer shipments-to-wholesalers increased 2.3 percent while sales-to-retailers were up 3.6 percent, on a selling day adjusted basis. The Bud Light brand and super-premium Michelob Ultra family also made important contributions to growth, as did recent new products like Chelada and Landshark. According to IRI supermarket data, Anheuser-Busch gained 0.9 share points at the consumer level during the third quarter,” he added.

The U.S. beer pricing environment remained favourable throughout the key summer selling season, the company posted. Anheuser-Busch implemented price increases on the majority of its U.S. beer volume in September and October. These pricing initiatives cover approximately 85 percent of the company’s domestic volume and are tailored to selected ...More Info

Danish brewer Carlsberg reported the interim results of the third quarter of 2008 on its official site on November, 5.

For the first nine months, organic beer volume growth totalled 4% (32% including acquisitions). Volume growth has been driven by double digit growth in Asia and reasonable strong growth in Eastern Europe, the company reported.

Carlsberg achieved progress in underlying operations in all geographic segments during the reporting period. Net revenue was DKK 45.42 mln, with organic growth of 7% (9% in local currencies) and operating profit before special items was DKK 6.592 mln with organic growth of 10% (13% in local currencies).

According to the brewer, Eastern European full year revenue and earnings continue to be in line with previously provided expectations. Russian beer market growth for this year is expected to moderate to about 1-2% following weak volume development in late August and in September.

The overall uncertain short-term economic outlook will affect consumer spending going into 2009 but medium term volume growth is still expected to be an average of 3-5% per year, Carlsberg posted.

In the third quarter, market development slowed in Northern and Western Europe to -1.7% and in Eastern Europe to -2%. In addition to the secular decline ...More Info

SABMiller plc and Molson Coors Brewing Company reported on November, 5 strong performance by their MillerCoors joint venture in its first quarter of combined operations.

MillerCoors drove higher sales-to-retailers, pricing, revenue, as well as strong double-digit underlying income for the fiscal third quarter ended September 30, 2008, it was reported.

"As expected, MillerCoors is already driving profitable growth based on our early efforts to build a stronger and more competitive U.S. brewer with the people, partners, brands and scale to win," said MillerCoors Chief Executive Officer Leo Kiely. "Our people are making it happen and these impressive financial results demonstrate our passion to deliver on our vision to become America's best beer company."

Brands

MillerCoors total brand portfolio grew sales-to-retailers (STRs) by 0.7 percent on a comparable basis.

Seven of the 12 largest MillerCoors brands increased STRs, led by strong Coors Light growth; five brands grew share including Coors Light, Blue Moon, Miller High Life, Peroni Nastro Azzuro and Coors Banquet.

Blue Moon, Peroni Nastro Azzurro, Coors Banquet, Sparks and Keystone Light achieved double-digit growth.

MGD 64 grew well ahead of expectations in the early stages of its national launch.

During the period, MillerCoors STRs rose by 0.7 percent after adjusting for the extra trading day in the ...More Info

Chinese beer Snow is the world's second-biggest beer brand by volume, moving up to separate two Anheuser-Busch brands, Bud Light and Budweiser, Reuters reported figures from researcher Plato Logic on November, 6.

Snow is brewed by SABMiller and its Chinese partner China Resources Enterprises Ltd, and has grown rapidly as China overtook the United States earlier this decade to become the biggest beer market in the world.

Plato lists the top ten beer brands as Bud Light, Snow, Budweiser, InBev's Brazilian beer Skol, Modelo's Corona, Heineken, another Brazilian InBev brand Brahma, Coors Light, SABMiller's Miller Lite and China's Tsingtao.

The researcher added the world's five biggest beer markets were China, United States, Russia, Brazil and Germany.

Plato Logic also forecast that world beer consumption will grow by less than 3 percent in 2008, after the 5.6 percent growth seen in 2007.

The Japanese brewer Kirin for the second time in three months cut its net profit forecast for 2008 fearing further growth of the yen and drop of consumption in its main markets caused by the economic crisis, AWP International informed on November, 4.

For the third quarter ended September, 30, Kirin reported a total net income of 95.6 mln yen, an increase of 103.3% compared to results of the same period last year. The brewer attributed the growth to the numerous acquisitions it had made previously.

Kirin’s total turnover increased by 28% to 1,695,930 mln yen, and its operating profit – to 103,862 mln yen (+15.3 over last year’s third quarter).

The Japanese brewer’s forecast for the current fiscal year (January 1, 2008 – December 31, 2008) is as follows:

Total sales are expected to reach 2,320,000 mln yen; operating income – 145,000 mln yen, net income – 104,000 mln yen.

Kirin said its beer sales volumes of 634 thousand kilolitres represent a decrease of 14.3% compared to the same period last year, impacted by factors such as the absence of new product launches that boosted results in the previous years.

The company forecasts its beer sales to make 899 thousand kilolitres this year (10.2% ...More Info

The US – Canadian Molson Coors Brewing Company reported on November, 6 higher pro forma global volume and net income for the third quarter ending September, 28.

The brewer said its net income increased 28.6 percent to $173.2 million for the third quarter.

Underlying after-tax income was $175.8 million, or $0.95 per diluted share, in the third quarter 2008, compared to $173.2 million, or $0.95 per diluted share, last year.

Molson Coors' leading brands performed strongly in each of the company's major markets. The brewer noted high single-digit growth of Canadian strategic brands, the growth of seven of the 12 largest MillerCoors brands, and a strong market share increase for Carling in a difficult U.K. beer market.

Peter Swinburn, Molson Coors president and chief executive officer, said, "We are pleased to have achieved higher total company volume and income in the third quarter, despite challenging competitive and economic conditions in all our markets. We gained market share in both Canada and the U.K. during the quarter, and we initiated the integration of two U.S. beer businesses into MillerCoors, a strong and competitive brewer with the talent, brands and scale to win in the U.S. In these challenging economic times, Molson Coors has a solid ...More Info

Between 2002 and 2007, per capita beer consumption in Eastern Europe rose by 22 litres, shows a new report by leading beverage industry analysts Canadean published on November, 4.

Consumption also increased strongly in Asia, growth was more modest in Central and South America whilst Australasia, North America and Western Europe all declined, it was reported.

Analysts forecast that Eastern Europe’s beer consumption will increase by an additional 21% over the next five years. So far, the region’s performance on the international stage has been predominantly driven by Russia, the third largest global market in pure volume terms.

Eastern Europe is also home to four of the world’s ten heaviest beer drinking nations including the Czech Republic which has strengthened its world-leading position. The resilience of the Czech Beer market has nevertheless been remarkable particularly given the fact that the pressures faced have been similar to those seen in Germany and the UK.

Germany and the UK have represented two traditional strongholds for Beer but continue to decline with overall volumes falling by a little under 4% in both countries during 2007. A number of factors have combined to dampen demand including a decline in heavy manual occupations, the growing popularity of soft drinks ...More Info

North American brewer Molson Coors Brewing Co has emerged as holder of a 5 percent stake in Australian brewer Foster's Group Ltd, Reuters reported on November, 6.

The investment, made through a cash-settled swap arrangement with Deutsche Bank AG, was disclosed by Molson Coors a day earlier.

Foster's posted on November, 6 that it had not been informed of the precise extent of Molson Coors' interest in the company nor their intentions with respect to that interest.

Australia's largest brewer is due to decide early next year on what to do with its troubled wine unit, which ranks globally behind Constellation Brands Inc. If its beer operations become a stand-alone business, analysts said they could be worth at least A$10 billion ($7 billion) to another brewer.

Foster's has already appointed advisers on a defense as investors speculate that global brewers would be interested in its high-margin beer operation in Australia, where it has about half the market with domestic brands such as Victoria Bitter.

A takeover of Foster's beer assets by Molson Coors, the maker of Coors Light and Molson Canadian Beer, is considered less likely than a joint bid involving Molson Coors and its larger U.S. joint-venture partner, SABMiller Plc, analysts said.

Foster's beer ...More Info

Eurostat reports EU malt shipments of 295,000 to third countries in July/August, experts announced on November, 1.

The figure signals another slow pace of EU malt exports and the reasons of smaller exports are manifold, analysts state.

The expansion of the EU to 27 member states changed the overall structure of malt production and consumption, the net export surplus became smaller.

During the overcapacity crisis (which was exaggerated, but caused a breakdown of malting margins), large capacities in France, Germany and the U.K. were closed.

Larger beer sales increased the demand for malt inside the EU, in Central/Eastern Europe and in Spain, also the Scottish whisky worked at full capacity and needed more malt.

The Russian market turned from one of the largest to a self-sufficient mini-customer.

New EU malting factories are under construction and more are planned to be built, but only a handful of new ones are on stream now, it is reported.

Estimates of the EU malting barley surplus are 1 mln tons and more, experts communicated earlier this month.

It is reported that 250,000 tons of French spring and winter barley have been sold to China, and at least one cargo of Danish barley has been exported to South America.

Shipments of French winter barley to Turkey continue regularly against that country’s import quota of 40-45,000 tons.

Balkan countries, Egypt and other North African states will take another 50-75,000 tons, and even Russia may import small quantities of Scandinavian malting barley.

Further business will depend on the outcome of the Australian crop, all analysts agree.

EU’s feed barley exports totalled 2.4 mln tons for the first four months of the crop year, as the Black Sea region encountered logistics problems and barley exports overcharged transport and port capacities. Latest sales to the Mideast, however, were done in Russian barley.

The IGC forecasts EU will export 4.1 mln tons of barley during the whole grain year. World barley trade will reach 19 mln tons, the Council states, whereas Black Sea (Ukraine 5.5, Russia 2.2 mln tons) and EU-27 4.1 mln tons will be the leading exporters.

According to analysts, the Middle East and North Africa will take ...More Info

After a steep slide during the first half of October, barley markets have now leveled off and seem to be holding their own for both feed and malting classes, Farm & Ranch Guide reported on November, 5.

However, it is difficult to judge where the cash barley markets are headed in the next few weeks, according to Marv Zutz, executive director of the Minnesota Barley Growers Association.

“It all depends on which market you listen to,” he said. “Some are bullish and some are bearish, and we are just going to have to wait and see how this unfolds.

“The malting barley contract price is directly related to the wheat market and most of the merchandisers are looking at the wheat market to base their malting barley contracts on,” he continued. “These barley merchandisers are figuring out that they have to compete with the corn, soybean and the wheat acres if they are at all going to attract any barley acres.”

The latest crop production numbers indicated a 239 million bushel barley crop this year - an increase of 13 percent over last year - which will put some downward pressure on the market, Zutz noted.

In addition, the export market for ...More Info

ABARE, the Australian Bureau of Agricultural and Resource Economics, said in a report on November, 5 that winter barley crops had suffered a marked deterioration caused by a lack spring rainfall across Victoria, South Australia and southern New South Wales.

“These developments have prompted ABARE to revise down its forecasts for Australian wheat, barley and canola production in 2008-09,” Mr Philip Glyde, Executive Director of ABARE said.

Australian barley production is forecast to be 6.3 million tonnes in 2008-09, a 20 per cent decline from ABARE’s September forecast.

According to the latest report, only New South Wales barley production is to remain 1.547 mln tonnes (as in the September forecast).

Western Australia is forecast to produce 2.223 mln tonnes of barley (September report: 2.340 mln tonnes). South Australia’s barley output forecast has been decreased from 2.206 mln tonnes in September to 1.5 mln tonnes in the October report.

Victoria’s barley is forecast to yield just 820 thousand tonnes in 2008/2009 as compared to 1.558 mln tonnes forecast in September.

The expected production was raised only for Queensland: 182 thousand tonnes in October versus 158 thousand forecast in September.

The situation is rather satisfactory in the European hops sector, La Depeche posted on November, 6.

Germany, which provides two thirds of the Union’s hops production, is supported by Austria in its assurance that the 2008 crop was good both qualitatively and quantitatively, experts communicated.

The crop’s alpha-acid levels are reported to be much better than those registered in 2007.

The UK is to produce lower crop due to unfavourable weather conditions.

World’s total production of hops is estimated at 110,000 tonnes (+ 20% compared to 2007), experts report.

Dennis E. Langrell, Michael J. Edney

Abstract

The quality data for the 2007 harvest was derived from 75 separate varietal composites, representing a total of 1 065 000 tonnes of barley selected for malting purposes. Barley crop volume for 2007, at 11 127 000 tonnes, was about 25% higher than 2006, and 3% higher than the 10-year average of 10 780 000 tonnes. This was largely attributable to increased seeded acreages, and generally warmer and moister growing conditions. Barley yields, overall, were higher than average. Manitoba had a second consecutive good year for barley quality and volume, due to early seeding and favourable growing season. Fusarium infestation levels in the eastern prairies were relatively low. Southwestern Saskatchewan and southeastern Alberta suffered from lack of moisture throughout the season, lowering its yield and quality. Central areas of the prairies suffered from excess moisture and heat, while northern areas experienced excess moisture and an extended harvest period. Malting barley selected in 2007 was of reasonably good quality. Thousand kernel weights and kernel plumpness levels were lower than those of 2006. Protein levels were good, but were higher than levels in 2006. Barley colour and appearance in 2007 was average. Barley germination characteristics in 2007 were similar to those of 2006, with minimal water sensitivity present. Malt made from 2007 barley was of good, average quality with good levels of soluble protein, adequate enzyme levels, and average levels of wort beta-glucan and viscosity, but higher colour. Extract levels were lower than expected, given the relatively low barley protein. Modification rates were good, and uptake of water during steeping was reasonably fast. Overall, the 2007 malting barley crop was of average quality. Load full article, 25 pages, 466Kb, PDF file