What's up with brewing?--- 2/25/11.

• BUD: $55.20
• TAP: $45.00
• SAM: $91.74

Well, certainly an uneventful week in the brewing industry. Outside of my stocks hitting some unsettling lows, there was little news to make the headlines since my last week's post. So, here we go.

First off, on a positive note, on Tuesday the NHL agreed to a sponsorship deal with Molson Coors. This means that Molson Canadian is set to become the official beer of the National Hockey League. Certainly the biggest shock of this agreement was felt by the league's current sponsor Labbatt Breweries. Labbatt, who has been the league's sponsor for more than a decade, was under the impression, until recently, that things were on track for them to remain sponsors until 2014. They later were informed by the league's chief operating officer John Collins that he feels the NHL needs to take steps in a different direction. Collins, who was quoted saying "this is a monster deal", feels that this change in sponsorship is going to allow for Molson Coors to have major positions across all of the league's current events and the ones they are hoping to create. This seven year deal between the NHL and Molson is just another sign of the postive momentum Collins has been working toward since he was brought on in

 2008. He feels that this will allow for the NHL to gain abundantly more American TV contracts and agreements with various American networks like NBC and Versus. As for the feelings of those at Molson Coors, current president and CEO Dave Perkins feels this will allow the company to take their brand to a whole new level. He also stated that he feels it will enable them to really take hockey to their beer drinkers and to their fans, and to provide hockey experiences to the brand. My opinions on this matter is that I feel it will give Molson Coors some great momentum in the market and most definetly will increase brand awareness in a sport where the could receive a great deal of sales and publicity.

In other news, Belgium owned Anheuser-Busch announced this week that they will be closing their Manitowoc, Wisconsin malting plant. This decision, which will be taking place within the next six to nine months, will affect thirteen employees currently working at this plant. The decision to close the plant was based on current market forcasts, location of raw material supply and more efficient malting processes elsewhere. According to news reports at bizjournals.com, the company determined that their current malting needs were being sufficiently met through other sources, including their malting facilities in Idaho and Minnesota. The brewer did say that there are no plans to change operations at any of Anheuser-Busch's other plants. Certainly my regards go out to those at the Wisconsin plant who will be out of work over the course of the next year from this decision.

My last topic this week for discussion deals with an article written by Colleen Paulson of The Motley Fool. Paulson's article, which was titled "Who's Broke Now?", certainly caught my attention with curb appeal when I strolled across it while browsing through my industry-related news. So, in this article, Paulson went on to discuss the pain that has been felt by the beverage companies because of a weakened economy. She talked about how many consumers have chosen to eat out less over the course of the last three years or so and have resorted to cheaper beverage options. One of the companies Paulson feels could dish out some pain to investors is the Craft Brewers Alliance. The CBA has been feeling a great deal of pain through the current recession and has dwindled their liquid assets down while continuing to dig a deeper hole for themselves with debt. She also went on to point out that the Anheuser-Busch owns 35% of the CBA and she feels this could lead to unfavorable situations, as it did for Rolling Rock. In the article she informed us that Rolling Rock was, at one time, a craft brewer with a loyal following and a one-of-a kind taste that they received from the Latrobe,PA's rolling streams' water they used in their brewing. Once being bought out by Anheuser-Busch, the company got packed up and moved to a new operating facility in New Jersey. The loyal following and distinct taste they once had suddenly faded away as the commercialization began. The CBA has fortunately boasted a five-year revenue growth rate of 34.7% but a 53.20 trailing-12-month P/E. This, she stated is why its too rich for her blood and also why she feels that one misstep could lead the company to what could be a "very painful hangover".

Well that's it for this week, and until next week I remind you to PLEASE "stay thirsty my friends"!

Beer Industry News and Updates for 2/18/2011

• SAM: $95.74
• TAP: $45.60
• BUD: $54.90

Well there certainly is a lot to discuss this week within the brewing industry. First off, China New Borun Company made the news this week again with some positive news for their shareholders. On Thursday the company announced that they have signed two letters of intent with parties in Sichuan Province. These two pre-sale letters of intent state that the company will provide 6,500 tons of their famous corn-based edible alcohol per month starting in the second quarter of this year to their customers in Sichuan Province. This volume will account for about 15% of the companies expanded total production for 2011. These agreements along with the others they have made since the opening of there Daqing Phase III facility will account for 90% of the companies projected production for this year.

Next, in the news was Molson Coors Brewing Company LLC. This week, MCBC announced their regular quarterly dividends that will be payable to their shareholders on March 15, 2011. The company announced that the quarterly dividends payable to their Class A and B shareholders will be US $.28. Also, Molson Coors Canada, Inc, the wholly owner subsidiary of Molson Coors Brewing Company, announced that they too will be paying quarterly dividends to their exchangeable shareholders in the amount of CDN $.28 as well. All dividends will be payable to their shareholders on record on February 28, 2011.

Another story this week deals with a news article written by Ian Wyatt of Seeking Alpha. Mr. Wyatt's article was written about two companies he feel has blossoming stocks for under $10. The reason this is important to me is that one of those companies he happens to be referring to is The Craft Brewers Alliance (HOOK) who is headquartered in Portland, Oregon. In his article he discusses the amazing growth seen by the Craft Brewers Alliance over the last 12 months. The growth he is discussing focuses on how HOOK has made a growth of over 250% in stock prices since March 1, 2010 where they closed at $2.26 per share. As of today HOOK reported a closing price of $7.78 which leads me to agree with Mr. Wyatt's analysis. Now, although I do agree that they would certainly be a wise investment, I also have to agree with many industry analysts who feel that the growth of The Craft Brewers Alliance will most likely plateau or show less significant increases over the next year versus the previous 12 months.My last topic for discussion this week deals with an interview that was done on Fox News on February 15th about the "Beer Stimulus Plan". Being interviewed here were Dan Kopman, Co-Founder of Schlafly Beer, Nick Matt, Chairman and CEO of Matt Brewing Company/Saranac and Leslie Henderson, CEO and Head Brewmaster of Lazy Magnolia Brewery.  In the interview these three brought for a point about their plea to lower the federal excise tax being imposed on micro brewers. The reason these companies feel that they have a valid argument is that although micro brewers only account for about 5% of the beer by volume in the U.S. the do account for 50% of the jobs with the brewing industry. Currently, the nations 1,700 micro brewers employ over 100,000 people in this country and that is why these companies feel they have a valid argument in their favor. Beyond that, if they are able to get this bill through congress it will also lower the cost to taxpayers per employee within this industry. Currently, it would cost taxpayers around $90,000.00 per person employed in the brewing industry and this bill would drastically lower that cost to taxpayers down to only about $4,000.00 per employee. Lastly, the succession of this bill would give the many micro brewers nationwide the needed capital to not only expand their businesses with much needed equipment but also the funding to be able to hire many more employees in our nations goal of lowering the unbearable unemployment rate that we face. I say it sounds like this will be a win-win for all parties involved and I certainly hope they will be able to get a favorable vote in congress.

Well that's all for this week so, don't forget..........."stay thirsty my friends!"

Brewing industry news 2/11/11...

• TAP: $45.05
• SAM: $93.26
• BUD: $55.99

 Beverages - Brewers 
Composite Value: 662.6

Today's Change: +1.07%

This section, from Yahoo! Finance,  shows the beer industry closing prices for this week.

There is certainly alot on the table to talk about this week..... To start things off, August Busch IV was able to have a sigh of relief this week after the recent allegations he was facing involving the death of his 27 year old girlfriend Adrienne Martin(both shown in picture to the right). After nearly two months of speculation in Saint Louis, prosecutors laid their accusations to rest determining that the Busch's girlfriend had high amounts of both cocaine and oxycodone in her system and is believed to have taken a fatal overdose. This news finally relieved the Anheuser-Busch heir of any charges that had originally been sought after as many had originally been suspecting foul play to be the cause of death for the 27 year old model and girlfriend. At least now he will be able to try to take some new steps forward in his life and the publicity will die down quickly so as to not damage the family, or more importantly the company's image any further.

Meanwhile, in other news, Netherlands based Heineken NV, recently announced the acquisition of five major breweries within the Nigerian brewing market. This recent purchased has caused an overwhelming increase in stock prices for Heineken within the Nigerian Stock Exchange(NSE), as this acquisition is looking to boost the company's market share to over 65 percent of the Nigerian beer market. The reason this is going to prove to be incredibly valuable for Heineken is because the brew market in Nigeria is the second largest beer market in Africa, accounting for over 15 percent of the markets 92 million hectoliters average. Trading in the beer sector within Nigeria rose from 10.9 shares to over 15.8 million shares in just the last two weeks proving there is much interest and certainly many hopeful investors looking forward to what should be a very positive future for that market as well as for the Heineken company.

The fourth quarter has produced some astonishing numbers within the industry as many brewers have released reports showing losses of almost half since this time last year due to the rise in the cost of many key ingredients. This story has been addressed alot lately, but as stocks continue to fall industry wide, I feel it is a very important issue. For one, with costs up on the supplies and ingredients needed to produce our favorite beers we could all be seeing some steep increases on prices as well, especially for many companies within the craft brewing industry because these companies will not have the "buying power" of the industry giants. Fortunately, many of these companies have started to strategize ways to lower the costs of production as a means to keep prices down......at least for as long as possible. Some of the companies have been looking at different promotions to increase desire for their specific product while others have ventured into making different styles of drinks that will require less of the ingredients that are facing inflation costs. MolsonCoors, for one, is looking at releasing a new Miller Genuine Draft lemonade this summer and trying to use advertisements to gain more interest also in Blue Moon. Both SAM and HOOK ( Craft Brewers Alliance-Nasdaq) will follow TAP's lead with the summertime promotions as well.

Lastly, China New Borun Corporation(NYSE-BORN) recently announced the opening of their Daqing Phase III facility. BORN, the leading producer of corn-based edible alcohol in China, is going to be using this new facility to meet the demands of a rapidly growing market within China for the corn-based alcohol. With growths of over 50 percent within their market over the last 12 months, this facility was most definitely a necessity as they have increased sales to over 380,000 tons per annum. Also, along with their existing by-products of DDGS, corn germ, and liquid carbon dioxide, this new facility will allow for the creation of one additional by-product which is corn crude oil. They are expecting with their expanded capacity and current by-products offering they will be able to increase revenue and profit growth in 2011 by substantial amounts as they push forward towards their goal of becoming the world's largest producer of corn-based edible alcohol.

The world of brewing as of 2/4/11.

• SAM: $93.83
• TAP: $47.47
• BUD: $55.59

The end of another week of trading with new prices to share with you. First off, on a positive note, The Boston Beer Company (SAM) made an incredible increase over the course of the week boasting a 4.5% increase from $89.76 last week to $93.83 this week.  Another of my companies, Molson Coors Brewing Company also made some movement in the right direction as they climbed up 2.1% from $46.51 last week to $47.47 by the close of business today. Now for the bad news, Anheuser-Busch (BUD) made another unfortunate drop in prices from $56.47 down to $55.59 which was a decrease of 1.6% and their lowest prices since the start of my investments with them. Overall, not a very bad week but I am still  staying hopeful for the week when all three of my companies make some substantial progress in the right direction.

Now as for the news and excitement within my industry of brewing.....another few stories have made the headlines this week. Recent reports of barley shortages have caused some to worry about the future of stock prices within the brewing industry. Poor barley crops in both Europe and North America could cause the prices of our favorite beers to increase drastically. This rise in prices could cripple sales for many brewers and unfortunately cause a very unsettling drop in stock prices throughout the industry. Some companies, like Anheuser Busch, who get their barley from South America may be able to weather this storm a little better than others, which lets me keep at least some hopefullness for future of my stocks in the brewing industry. This increase in hops has been the first major increase in prices since the hops shortage since 2007 when many companies were facing hard times.

One company who stood out in the midst of the hops shortage in 2007 was The Boston Beer Company. They hosted what was called the "Hop Sharing Program". Through this program they donated over 20000 pounds of hops to 96 different craft brewers nationwide to help keep them afloat. It will be interesting to see, with the prices of hops on the rise, if any of the industry giants will make another generous effort to aide the craft brewers through the upcoming tough times they will face.

In other news, Vina Concha y Toro sealed a strategic alliance with Cervezas Kross this week. The agreement contemplates the acquisition of a minimum of 40% of the beer company. This is the first time that the Chilean winery has taken a participation in a company of a sector not belonging to the wine business and the objective will be to participate actively in the premium segment of the national beer market.  By entering this business, Concha y Toro will be able to take Kross from its present positive situation to unimaginable growth levels, in turn taking advantage of know-how in marketing, logistics and distribution by being distributed by Concha y Toro y Toro and its commercial network.Vina Concha y Toro enjoys an outstanding position among the world's most important wineries. With consolidated sales in 2009 of US$643 million and more than 28 million cases sold worldwide, the company demonstrates the solidity of its business model and international leadership with a presence in more than 135 countries. One thing has been made certain through this whole deal and that is that both companies involved here have reaffirmed their wish to convert Cerveza Kross into a benchmark in the Chilean beer market, opening up future growth prospects for the brand. This should play out to be very interesting within their domestic market as well as internationally through the many foreign markets they distribute to. 

The last topic of discussion this week is about a beer by the name of "Big Flatts 1901". The reason I wanted to discuss this particular beer is because it will be selling for only $2.99 for a six pack and sold at your local Walgreen's. Why is this important? The answer to that is that with an economy still in the midst of a recession, and this beer having both incredible price appeal and great taste, it could cause sales to suffer for some of the major brewers like Anheuser-Busch and Molson Coors. Im still a little sceptical as to what type of serious threats this beer could make against these industry giants, but there has certainly been a great deal of interest in it since its recent release in Walgreen's, Costco and Trader Joes.

Stephen Colbert, the host of the Colbert Report on Comedy Central, certainly shared my enthusiasm in this new beer as he did a taste test on his show recently. Big Flatts certainly did not win any awards here as he stated “Big as in the quantity you can buy with the change between your couch cushions. And flat for both the taste and the position it’ll put your body in,” , this comment obviously as a crack on the beers name as  well as others he made throughout the show have proved he is certainly not going to be a fan of the "budget beer".  Others, like Gina Rakers on the beer blog http://www.hoosierbeergeek.blogspot.com/, have made comments like "In a word, the taste is terrible, but at 50 cents a can, you can’t expect a whole lot". So although the recent sales have shown considerable demand, these critics amoung others are not impressed.