Oct 292013

whitbread beerOne of the platforms I worked on at Glazer’s was to obtain the leading or second best-selling beer of each country in the world.  If I could not acquire said brand, then the goal was to look at other key brands, who owned the brand and what was its future.  During this time, one of the companies that fit this description was Royal Imports, with Mackeson Stout and Whitbread from England.  The brands were owned by InBev and sold under an agreement with Royal Imports, headed up by George Henricksen, based in Cincinnati.  With limited resources, no employees, and a small team of brokers, George managed to build Royal into a nice business, selling several hundred thousand cases a year.

At one point, George and I explored the possibility of Warsteiner and Royal doing a JV and consolidating.  The process did not happen because the agreement that Royal had with InBev was time bound and InBev was adverse to an extension.  In fact, when the agreement came to an end, Royal Imports was terminated, and George retired.  InBev walked away from the all that volume and the work George did, and competing brand(s) picked up InBev’s left overs.

Since then, InBev, in addition to buying AB, has acquired numerous import brands including St. Pauli Girl, Presidente, Spaten, Franzikaner, and Bass which were once imported by companies other than InBev.  InBev also took Beck’s from Germany and began brewing it in St. Louis.  They did the same thing with Bass.

Because of this, AB distributors, encouraged by ABI, either traded or bought these InBev brands from their competing wholesalers if they did not already distribute the beers.  Consolidation on a smaller scale.  A number of good brands and a lot of money changed hands in these transactions.

As of this summer, the sales of these brands were considerably lower, just as InBev did with the sales of Mackeson and Whitbread.  SPI was down -63,000 cs. or -22.6%, Presidente down -120,000 cs. or -51%, Bass down -65,000 cs. or -26%, Spaten/Franzikaner down -30,000 cs. or -25% each.  Beck’s, once the largest imported German beer, down -207,000 cs. or -16%, Beck’s light, -35,000 cs. or -30%.

So the question that distributors should be asking is why should we spend our money or give up growing brands to acquire products which ABI then simply allows to die?  Perhaps once ABI gets all of these brands under their own distributor network they will ramp up marketing support.  By not supporting these brands, since many are still in non-ABI houses, it makes it much easier for the ABI distributors to acquire the brands and at a cheaper price, too!

Look at Beck’s; even though they have lost 207,000 cases, by adding a line extension in Beck’s Sapphire, that brand is +435,545 cs. more than offsetting volume losses.  Sampler packs in the future could contain all ABI’s German beers.  Such a pack could contain Beck’s, Spaten, and St. Pauli or a combination of others.  All that is needed is to have all the brands under one roof in each market.

An ABI distributor these days must wonder if one should even invest in these brands.  Which brings Yogi Berra’s famous quote to mind: “The future ain’t what it used to be!”


 Posted by at 6:50 am

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