![#](https://e-malt.com/Images/left_top_corner16x200.gif) | E-Malt.com News article: USA: AB InBev’s ‘aggressive’ pricing could benefit Boston Beer sales![Brewery news](https://e-malt.com/Images/BeerBullet2.gif)
One US analyst believes that a more aggressive US pricing strategy led by Anheuser Busch InBev could reignite sales growth for craft beer competitor Samuel Adams, BeverageDaily.com reported on January 15.
Vivien Azer from Cowen and Company made her comments in a note on January 14 that summed-up her impressions of the Beer Summit 2015 in Palm Beach, California – which featured presentations from top executives representing the likes of AB InBev, MillerCoors and Constellation Brands.
Reflecting on a presentation by AB InBev’s VP of consumer communications, Lucas Herscovici, Azer said the world’s biggest brewer was increasingly focused on digital to balance out its strong focus in past years – with up to 70% of its media spend – on a sports-centric strategy.
The company is de-emphasizing loyalist ‘retention’ to focus more on millennial consumers (wedded to their smartphones) to drive growth, and Cowen said AB InBev’s future media strategy hinges on digital, experiential and media strands, with savings from classical media reinvested in brands.
“Looking ahead the key question for us will be the impact that AB InBev’s market share aspirations have on the underlying growth of the category,” Azer wrote.
Beer volume finished 2014 in growth, but this was driven by aggressive pricing led by AB InBev, Azer wrote, noting that a similar price/mix dip in autumn 2011 also spurred category sales growth.
Of course, where AB InBev leads, the rest of the US beer industry, follows – even if rivals don’t lower (or change) their own prices, they at least feels the effects in terms of retail and shopper behaviour.
Azer said that while Samuel Adams didn’t present at Beer Summit 2015, smaller craft brewers including Revolution, New Belgium and 21st Amendment did, and all predicted ‘robust’ 2015 growth.
“At face value, this heightened competition, coupled with the improved results that we have seen for AB InBev, MillerCoors and Constellation, could clearly be viewed as a concern for Samuel Adams, in particular given the deceleration we have been seeing in the company’s top line growth,” Azer wrote.
She noted in passing that Samuel Adams (The Boston Beer Company) management had been open regarding reduced growth expectations for calendar 2015, especially given a lack of new planned product launches.
But the analyst said she expects Samuel Adams to benefit from an AB InBev-led reduction in beer price/mix, which has in the past spurred category growth, especially given Samuel Adams’ exposure to the fast-growing craft beer segment.
“What is more, while the company’s growth in cider has slowed, the growth rates remain robust. While all-outlet beer sales growth slowed to +6% in the month of December…the company delivered dollar sales growth of nearly 22% when cider and tea are included,” Azer added.
Of course, this US ‘craft’ beer threat would not be complete without Constellation Brands import portfolio, and the brewer told the summit that its calendar 2015 focuses includes Corona Extra in cans, Corona Light, expanded distribution for Modelo Especial and a craft beer test in Chicago.
21 January, 2015
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