Wednesday, February 6, 2008

A-B Losing Grip on US Distribution?

In an article found in today's Wall Street Journal, found via Miller's Brew Blog, it would seem that Anheuser-Busch is losing its hold on American distribution. Now, don't misread that to mean they're anything less than massive in American beer distribution, but this is a pretty interesting development. Sure, folks who have their ear to the ground have known A-B is seeing more competition in distribution and, naturally, shelf space - experiencing a much decreased growth rate over the past few years.

What's happening? It seems that folks no longer want to have exclusive arrangements with A-B, instead opting to provide other imports and crafts to their customers. Seems like a natural occurrence given the growth rates in these segments. According to the piece:
“The shift might help competing alcohol brands gain market share, as distributors divert some of their attention from Anheuser, which accounts for about 48% of U.S. beer sales. For consumers, it means greater choice at their local bars and liquor stores. Wall Street analysts say the movement signals a weakening of the St. Louis brewer's clout in the marketplace, as small-batch "craft" beers and imports, as well as wine and spirits, wrest market share from mass-market brews like Budweiser.”
I suspect A-B won't just let this continue without a fight, so I wouldn't be surprised if they went on a shopping spree in 2008 (I believe this has been predicted by the likes of Jay Brooks?) to acquire more distribution clout. Regardless, this should be an interesting story to follow. Oh, I also don't believe A-B is the worst thing for craft brewers - they're really just a business, run like a good business should run (especially if you're a share holder). If another company steps up and begins to control the market in any capacity, I'd expect they'd either be just the same, maybe even a bit worse for those who like variety. So, don't cheer or celebrate with news like this, keep an eye on who the other guys are and what their goals are. At least A-B has been in the beer business forever and can't shake that image from their business.