{"id":1714,"date":"2014-04-22T06:00:11","date_gmt":"2014-04-22T11:00:11","guid":{"rendered":"http:\/\/www.beerbusinessunplugged.com\/?p=1714"},"modified":"2014-04-22T09:04:34","modified_gmt":"2014-04-22T14:04:34","slug":"the-time-is-coming","status":"publish","type":"post","link":"https:\/\/www.beerbusinessunplugged.com\/?p=1714","title":{"rendered":"The time is coming…"},"content":{"rendered":"

\"SABMiller\"<\/a>When the opportunity to buy the Schlitz distributorship was first presented to me, I immediately started with future sales projections.\u00a0 This was in 1980, and while the brand was declining, its market share was still around 40%.\u00a0\u00a0My original projects included sales that first had growth, than if they went flat and finally, \u00a0I did what I considered was a worst case scenario,\u00a0to lose\u00a0half the current volume.<\/p>\n

I had also targeted several of the smaller\u00a0distributors that I was interested in purchasing.\u00a0 At that time, there were nine separate companies selling beer in my market.\u00a0 What I did not project or anticipate was that within two years, the Jos. Schlitz Brewing Co. would sell out to the Stroh\u2019s Brewing Co.\u00a0 At first glance, it gave all the Schlitz wholesalers hope that the future was going to be bright.\u00a0 So much for that.<\/p>\n

Within two years, it became obvious that this combination of Stroh\/Schlitz was not working and many longtime Schlitz distributors began selling out.\u00a0 The Dallas distributor at the time, a longtime friend of mine, sold to Coors because he had lost all faith in Stroh senior management and saw no future.\u00a0 He sold while his business still had excellent volume and high value.<\/p>\n

Over the decades the industry has seen and experienced the Schlitz\/Stroh model many times.\u00a0 National breweries including Pabst, Falstaff, and Hamm\u2019s all sold and combined, as did regional breweries such as Olympia, Rainer, Lone Star, Pearl, Jax, and Schaffer, to name a few.\u00a0 The death of many of these breweries was self-inflicted and their volume became the prey of AB, Miller, and Coors.\u00a0 Death was imminent, so they all sold while\u00a0some value still existed.<\/p>\n

At this past week\u2019s Craft Beer Convention in Denver, projections of a total craft share of 20% in six years would mean volume of 37 million bbls.\u00a0 Given sales trends, margin growth, the number of current, new and projected breweries; and\u00a0then throw in\u00a0the overall decline of total beer volume, add in the import share of 14%, that means over one third of the industry volume is high end.\u00a0 Consider that there are also over 1,800 new breweries in planning.<\/p>\n

ABI and MC have lost over 17 million bbls in volume since 2008 when InBev bought AB.\u00a0 Both companies\u2019 premium and lights continue to lose volume, while both companies have aggressively added line extensions, flavors, ciders, and other products in an effort to off-set these volume losses.\u00a0 So far, it has not worked.<\/p>\n

So the question becomes, will history repeat itself as it appears it will?\u00a0 If the crafts continue to grow at their current rate, and given what ABI has done in the past, expect ABI to aggressive pursue buying SABMiller.\u00a0 It is in ABI’s DNA.\u00a0 The US beer industry is close to 50% of the world\u2019s GP for beer, and while both ABI and SABMiller continue to develop China, Africa, and South America the money is here.<\/p>\n

Attendance at this year\u2019s recent BA’s\u00a0Craft Brewers Conference was close to 9,000 people!\u00a0 9,000!!\u00a0 There are, and have been many reasons that this craft craze has grown, but regardless, the industry has changed and will continue to change.\u00a0 History will repeat itself, we just do not know who will buy whom, but we can be confident in knowing it is only a matter of time.\u00a0 For both ABI and SABMiller that the time is coming…<\/p>\n

\"2013<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

When the opportunity to buy the Schlitz distributorship was first presented to me, I immediately started with future sales projections.\u00a0 This was in 1980, and while the brand was declining, its market share was still around 40%.\u00a0\u00a0My original projects included sales that first had growth, than if they went flat and finally, \u00a0I did what […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_s2mail":"yes","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[1],"tags":[],"jetpack_publicize_connections":[],"aioseo_notices":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2xRTi-rE","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/1714"}],"collection":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1714"}],"version-history":[{"count":15,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/1714\/revisions"}],"predecessor-version":[{"id":1752,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/1714\/revisions\/1752"}],"wp:attachment":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1714"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1714"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1714"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}