{"id":2736,"date":"2015-07-28T06:00:06","date_gmt":"2015-07-28T11:00:06","guid":{"rendered":"http:\/\/www.beerbusinessunplugged.com\/?p=2736"},"modified":"2015-07-27T09:30:59","modified_gmt":"2015-07-27T14:30:59","slug":"the-status-quo-sucks","status":"publish","type":"post","link":"https:\/\/www.beerbusinessunplugged.com\/?p=2736","title":{"rendered":"The status quo sucks."},"content":{"rendered":"

\"World<\/a>Schlitz had a market share of about 40%\u00a0in the 1980s when Stroh took over the brand in my market. I was definitely aware of the quality problems Schlitz was having on a national basis.\u00a0 In spite of those concerns, I felt that at worst Schlitz could maintain a 20% market share.<\/p>\n

Schlitz had been either the number one or number two bestselling brand for decades, so it seemed only natural to assume that the beer would maintain a reasonable share in the marketplace. When Stroh bought the company, however, support\u00a0behind Schlitz was\u00a0eliminated. The rest is history.<\/p>\n

July 14th<\/sup> of this year marketed the seventh anniversary of InBev\u2019s acquisition of AB, which many in the industry believe marked a shift in the beer business.\u00a0 Prior to InBev, the industry’s priority was on market share.\u00a0 Now it is ROI and the bottom line.<\/p>\n

In these seven years, AB has gone from 107 million bbls. to 96 million bbls. in sales.\u00a0 They have lost over 10 million bbls. in volume.\u00a0 Overall market share has dropped to 44.7% and these trends are continuing in 2015, as the June Nielsen show AB is down -3.1%.<\/p>\n

During this seven year period, InBev directly made over $2.5 billion in cuts and eliminated over 2,300 jobs.\u00a0 While making these changes their stock went from $70 per share to $129 per share.\u00a0 No doubt the impact of InBev\u2019s actions has produced outstanding financial results for the company and investors.<\/p>\n

What about the AB distributors?\u00a0 How have they done?\u00a0 Despite the fact that many AB distributors have lost market share, the same group has increased revenues and profits.\u00a0 All of this is due to InBev\u00a0and the expansion of crafts and opening their operations to distribute many of new beers.\u00a0 For both the AB wholesalers and the craft breweries the timing on this availability could not have come at a more fortuitous period.<\/p>\n

InBev did not follow the footsteps of either Stroh, when they purchased Schlitz, or Alan Bond when he acquired G. Heileman Brewing.\u00a0 Both companies were heavily laden with debt, and as time passed, both collapsed under that weight of their financial woes.\u00a0 Brands of both companies, while still around today, are mostly bolt-ons for wholesalers\u00a0with very small volume.<\/p>\n

What is interesting is that in one way InBev’s acquisition parallels both Schlitz and Heileman, in that AB’s volume is dropping, and has since been dropping since InBev acquired the brand. Similarly Schlitz\u2019s and Heileman\u2019s volume dropped when they were acquired by Stroh and Alan Bond, respectively.\u00a0\u00a0This, however, is where the similarities end. InBev is a company whose focus is on the bottom line and ROI; it has accomplished what it set out to do, increase the bottom line.\u00a0 In fact, it was able to continue to acquire additional companies, including Modelo.<\/p>\n

The next seven years will be very interesting to see how ABI performs.\u00a0 In 2022, what will ABI’s market share look like?\u00a0 Who will they purchase during these years?\u00a0 Will their stock continue to perform as well as it\u00a0has since the acquisition? Sooner or later you have to sell something.<\/p>\n

Prior to InBev’s take over, AB dominated the market for decades, but when InBev came in, the industry leader looked at the status quo, and it sucked!<\/p>\n

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

Schlitz had a market share of about 40%\u00a0in the 1980s when Stroh took over the brand in my market. I was definitely aware of the quality problems Schlitz was having on a national basis.\u00a0 In spite of those concerns, I felt that at worst Schlitz could maintain a 20% market share. Schlitz had been either […]<\/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-I8","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/2736"}],"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=2736"}],"version-history":[{"count":14,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/2736\/revisions"}],"predecessor-version":[{"id":2781,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/2736\/revisions\/2781"}],"wp:attachment":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2736"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2736"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2736"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}