Thursday, November 29, 2007

A-B Stocks: As Good as Their Beer?

No, this isn't a big surprise. If you're a craft beer enthusiast, you're likely familiar with the declining market share for this juggernaut brewery. However, it was interesting seeing this on MSNBC today.
Anheuser-Busch's recent weak stock performance reflects concerns surrounding the future for both the company and the overall beer market. While I don't see beer disappearing from our culture anytime soon, its sales growth has been anemic, while wine and spirits have become a more lucrative market. Within the domestic beer segment, consumer tastes are shifting away from mass-market brews, toward more flavorful craft beers and imports. The overall effect of these two trends has favored distillers like Diageo (NYSE: DEO) and Constellation Brands (NYSE: STZ) and smaller brewers like Boston Beer (NYSE: SAM).
Imagine that. Given the CHOICE, consumers seem to choose beers with flavor. Who would have figured that?

Oh, by the way, I don't want to appear to be mindlessly bashing A-B - I'm not. I think they're probably better for the craft beer industry than they get credit for. However, I don't really like that any company in any industry can have close to, or more than a 50% market share.

Also, if you're a big investor and want a good return on investment, check out what's going on in the craft beer market these days. If I had the means, I'd put my money in a VC to help a startup brewery with a good plan and an established brewer. There ya go, my financial tip of the year.