Premium brands keeps driving ABI growth in 2017
Latest from ABI’s first quarter financial reports, the corporation’s 1st quarter EBITDA increased 5.4%. Although total volume declined, revenues per hl have increased 4.5% due to effective revenue and cost management and YoY normalized profits increased more than 70% due to new acquisition of SABMiller.
In China, Corona’s 1st quarter revenue grew 18% thanks to early Chinese New Year boost. China market 1st quarter total volume increased by 1.9% but ABI reports industry volume decrease of 0.5 percent.
ABI’s United States of Beer
As America’s leading brewer, we will invest close to $500 million in 2017, and $2 billion through 2020 – among the largest ever capital investment programs in U.S. brewing history. Our 2017 investments include:
- Over $200 million for brewery and distribution projects
- $180 million for product packaging and innovation initiatives
- $58 million to improve and increase sustainability at our facilities
- Maintaining 17,000 jobs in the U.S.
Craft beer world boycott ABI buyouts
ABI’s recent acquisition streak of craft brewers to strengthen its premium portfolios is catching head wind. The latest acquisition of North Carolina favorite barrel aged beer brewer Wicked Weed has brought anger to the whole craft brew community, with more than 70 brewers backed out of Wicked Weed’s July festival, craft bars around the country de-stocking its beers and global drinkers boycotting the brand.ABI may have the strong distributions that the craft brands lack, but in the process of turning out national and international craft beer brands, these brands are also losing their biggest fan base.
Beer season has officially started
1Q17 looks good for beer in China, Qingdao reports 2.6% YoY revenue growth and 8.51% net profit growth. YanJing revenue grew 2.12% and net profit grew 13.85%. 京东(Jd) reports a 39% 1st quarter YoY growth in beer sales. And relative growth in all alcoholic beverages 26-33%.The market has moved from price competition towards higher price and more premium products. Brands also focus on cost and operation management, to achieve stable volume and higher revenue and profit. As more craft brands enters the China market, and consumers open up to trying new brands, craft recognition will continue be the key battleground for premium beers. As supermarkets and convenience taking in more distribution shares, it’s crucial for brands to figure out their merchandising and POS strategy to optimize sales in these purchase scenarios.
Chinese fake beers are hurting brands image and sales
Recently police in Guangxi and FuZhou busted workshops that recycled premium beer cans and bottles, refill them with cheap low quality local beer, and fetching up to more than 10x profit. These beers usually go to restaurants and night clubs where people are less cautious when consuming. Among the fake seized are large quantity of Budweiser, Heineken and 400,000 bottles of Super Bock, a Spanish beer that have been in China since 2008. These fake beers are hurting sales in new markets in 2nd and 3rd tier cities, while and have to potential of major negative impact on brand image with health and safety issues. Many people on social are shocked by the counterfeiters methods and the reach.
QingDao APP launching in Shanghai
Buying beer in cases from supermarket is not fun, especially during the hot summer days. QingDao has captured this need in an convenient O2O App that effectively ties its offline channel distributors into a speedy delivery network for online buyers. The surprisingly innovative app has now launched in 39 cities in china, The latest: Shanghai.
New beer that boosts your sex drive
Don’t all beers do that?
A brewery in UK came up with a new pilsner which claims to boosts your sex drive. The is brewed from local spring water and the seeds of watercress, a leafy green rich in vitamin and also known as an aphrodisiac.
Ukraine serves up some TRUMP beer
Pravda brewery in Ukraine has introduced a “Trump” branded beer and has quickly caught media attention with its flamboyant imagery. This imperial Mexican lager features the word TRUMP in his favorite color gold with the Mexico wall and the trump tower behind. Vladimir Putin peers out from the wall wearing the signature “Make America Great Again” hat.