The Final Chapter in Brewing News......4/22/11

• BUD: $61.44
• SAM: $91.97
• TAP: $48.03

So, we have reached the finale. It's the end of the semester and this is my last blog regarding all the news that is the brewing industry. News stories were limited this week, so I decided that I am going to use the majority of this weeks blog to recap some of the major stories that have affected the industry over the course of the semester and where things stand with these different issues and what we may be looking forward to as far as stock prices for the remainder of the 2011 year.

First off, the big bad Anheuser-Busch InBev, this industry's top dog, has seen some extreme ups and downs over the semester. Some of the things that greatly affected the public perception of Anheuser-Busch and caused a great deal of fluctuation in stock prices for this company involved the speculation revolving around the NFL lockout from the NFL Player's Union. This news caught this nation by storm as this country's primary form of entertainment is professional football and it certainly caught the investors of A-B and those with a vested interested in the company off guard. Because A-B is the primary sponsor of the National Football League, the truth of the lockout that has taken place has forced the fear of dramatic sales decreases on the company as they receive an incredible amount of sales from those attending the games as well as from those who support their team from the comfort of their living room's with a 12 pack by their side every Sunday. In my opinion, I believe the National Football League and the Player's Union will have to come to some sort of agreement before this fall because there is way too much revenue at stake, not only for those in the brewing industry like A-B who is the primary sponsor of the NFL, but also for those who sell everything from groceries to team memorabilia. I think that when this is all said and done and things get back on track to where they should be it will allow the stocks at Anheuser-Busch to flourish like the should be, even if the company did sell out to Belgium's own InBev.

The next big series of events over the course of the semester revolved around those at Boston Beer Company. Boston Beer has been having a rough time living up to the forcasted increases in stock prices many people felt this company would have over the course of the year as a whole. Much to the disappointment of the public, as well as myself, craft beer has seen some growth but not nearly the growth the investors and board members of these companies had projected. A lot of the reason that these companies, like Boston Beer have seen such hard times is due in whole or in part to the fact that the cost of nearly all the supplies needed in the brewing industry have suffered the pain of inflation. Everything from glass to hops has gone up a great deal in price forcing many of these brewers to tighten up on spending and try to be much more frugal. Along with cutting down on unneeded expenses, some of these companies have been forced to raise prices to compensate for the costs they are being dealt by their suppliers, and this price jump has caused many people to steer towards "the cheap stuff" again rather than the craft beer flavors they know and love. At least for Boston Beer, their rise in volume from years prior has allowed them to better weather these tough times than many of their smaller allies in craft brewing. Also, Boston Beer has tried to take a stance not only to continue to offer their great craft beer at the reasonable prices we all hope for, but they have also tried to use what resources they can to help keep many of the nation's smaller brewers afloat. I think prices will stabilize again and things will get back to normal, at least i certainly hope they do because I am certainly one of the brewing industry connoisseurs who prefers the taste of craft beer over the watered down and rather tasteless mainstream beers.

In conclusion, over the course of this semester, through mergers, acquisitions, good and bad times, stock prices have stayed relatively the same. this plateau of prices gives me faith that no matter how hard times get the brewing industry will continue to remain relatively recession proof and for those who have investments in these companies....rest assured, beer and brewing is an American past time and something many Americans can't and won't live without so you will always have a stable investment with little chance for losing your hard earned money you have invested. .......As always........................................."stay thirsty my friends!!!!!!!!!!!!!!"

The World of Brewing.....4/15/2011

• BUD: $61.54
• SAM: $90.86
• TAP: $47.86

Well, its that time again, time for the weekly dose of everything that is the brewing industry. This weeks first topic on the table is about the pain being felt by the CEO of Molson Coors. Molson's CEO Peter Swinburn recently saw his compensation package drop by 13 percent from 2010's falling beer sales. His total compensation was only valued at about $7.1 million which is down from about $8.1 million from the year before. Most of the decline was accounted for by shrinking stock awards, which fell 34 percent to $2.3 million. Swinburn wasn't the only one at Molson Coors who has been feeling this pain as the company has struggled with falling beer sales for some time now and increasing costs for ingredients. Certainly the makings for a lethal combination for all those employed with the company. Numbers-wise the company earned $707.7 million for the fiscal year which is down from $720.4 million the year before.

The next story this week comes to us courtesy of Molson Coors again, this article is from April 13th on Yahoo! Finance and states that "Molson Goes Light with Sublime". The article talks about how Molson Coors Brewing Company is now producing and marketing Molson Canadian 67 Sublime, which is a premium beer with citrus flavor but contains not more than 67 calories per 341ml bottle and has 3 percent alcohol by volume. This beer is now hitting the shelves at select retailers and establishments across Western Canada and Ontario and it will be available in the national markets starting around June 2011. This should certainly be a great addition to the innovative low-calorie beer category. Management at Molson Coors claims that the new brand is offering "health and wellness" along with innovative flavors to make it interesting and enjoyable for all crowds. This launch of the Molson Canadian 67 Sublime is part of a revamping program taken up by Molson Coors to hold back the decrease in volume in the premium and value categories. Sublime will be one of several new products created under the Molson label to cater to the shifting consumer tastes in Canada and also in the U.S. where drinkers are ordering more specialty beers or wine in recent years. The company is especially concerned with the Canadian market where they currently have a roughly 40 percent market share.

This weeks next article comes from a press release posted at Brewbound.com stating "Samuel Adams to Provide New Opportunities for NYC Small Businesses". According to the article, Samuel Adams, aka Boston Beer Company, announced that they will be expanding their philanthropy initiative, Samuel Adams Brewing the American Dream, to New York City. Focused on the food, beverage and hospitality sectors, the program is geared at supporting lower income small businesses by providing accessible financing as well as business and financial literacy tools and assistance.This program was launched in 2008 in a partnership with ACCION USA, on of the country's top not-for-profit microlenders, and the initiative has already loaned about $540,000 to 60 businesses, largely in the New England area, with the goal of reaching $1,000,000 by the end of 2011. Food, beverage, and hospitality small business owners can apply for loans ranging from $500 to $25,000 to be used for a variety of business purposes including expansion, equipment, and marketing, with all loan payments recycled back into the fund. Their primary goal here is to help fill the current small business lending void in the city's neighborhoods and be responsive to the business and financial management education needs of these business owners through one-on-one coaching. Personally, I think this is a very respectful and helpful initiative the company has taken to help combat the nation's current financial crisis many of these small business owners are feeling, and certainly it will give Boston Beer some always helpful positive PR.

This weeks last topic for discussion comes from an article posted just a few minutes ago on Yahoo! Finance from PR Newswire titled "Concha Y Toro and Brown Forman Complete the Sale of Fetzer Vineyards". Apparently, Vina Concha Y Toro announced today the final acquisition of Fetzer Vineyards and related assets that Brown-Forman Corporation owner in California. This process was completed successfully, which means the transfer of ownership is fully assumed by Concha Y Toro. This acquisition contemplates a portfolio of brands with an attractive positioning in the American market. The brands acquired represent a volume of 3.1 million cases and sales of $156 million in 2010. This acquisition also includes the almost 1,100 acres of owned and leased vineyards in Mendocino County, California, warehouses and production capacity for 36 million liters in Hopland, California, and 6 million liters in Paso Robles, California, and a bottling plant. The principle installations are the the Hopland, California where they employ about 260 people. The CEO of Concha Y Toro was quoted saying, "For Concha Y Toro, the future development of the brands at Fetzer Vineyards is an important challenge, something to which Concha Y Toro commits all its effort and energy to continue with the history of quality which it has already deservedly earned. I am sure that the joint work teams of Concha Y Toro and Fetzer Vineyards will be capable of continuing toward a new stage of development and the integration of this operation will enable us to incorporate the culture of excellence and commitment of Fetzer's team , also continuing to strengthen links with its surroundings and community in this beautiful zone of Mendocino." Well, in my opinion it sounds like a financially smart investment on the part of those at Concha Y Toro and it seems they have a great deal of plans in place to minimize the chance for failure here.

Well that's it for this week so until next week.........."Stay thirsty my friends!"

Brewing News and Updates....4/8/11

• BUD: $59.03
• SAM: $91.50
• TAP: $46.78

Well, we are nearing the end of the semester but there is still a lot of news in the brewing industry that I want to update you on.

First off, yesterday was an interesting and important day for those of us who follow the beer industry. April 7th, 1933 was a very big day in the history of booze as it marked the anniversary of the passing of the Cullen-Harrison Act which became law in the United States. This act made it legal to sell and manufacture alcohol for the first time in 14 years as it was the beginning to the end of prohibition and is a day to remember as the end of the dry nightmare.

Now, on to the news of the industry that has impacted the market. Danish brewery Carlsberg has decided to make some big changes in hopes of increasing sales. In a story titled Branding Makeover for Carlsberg from The Wall Street Journal's website, they discussed how the executives at Carlsberg have decided to revamp the branding, ingredients and distribution of their Carlsberg lager, including a new range of packaging and a new slogan. In detail, the company has changed the design of their cans, changed their slogan, and have reformulated the lager using a new barley developed to keep beer fresher for longer. The company has claimed that consumers will be unable to taste the difference between the old version and the new version, which is already in production and is being rolled out across all Carlsberg markets.The new barley the company is intending on using is called Null-Lox barley and has been developed by the company in ten different versions to suit a range of climates, which will mean the beer could be stored in less than optimal conditions. Null-Lox also has had great disease resistance and needed fewer pesticides. The company is intending on harvesting around 200,000 tons of the barley this year. I certainly feel that this is going to be a very smart move for the company even though they are taking on considerable risks in modifying the world's seventh biggest brand.

In other news, Kingway Brewery Holding Ltd., maker of Kingway Beer, said Monday that its

state-owned parent company has exercised a right to buy a 21.37% stake in the brewer held by Heineken-APB (China) Pte., a Singaporean-Dutch joint venture. This offer has allowed GDH Ltd. the ability to thwart a plan by conglomerate China Resources Enterprises Ltd. to acquire the holding. GDH, which currently owns 52.5% of Kingway Brewery, will acquire the additional shares on the same terms that Heineken proposed earlier to sell to China Resources, which makes China's top-selling beer, Snow. This deal was valued at 1.08 billion dollars and was a big move by GDH in using their pre-emption right to acquire these shares and keeps China Resources from being able to buy a major stock in the Hong-Kong listed firm. This will also allow GDH's state in Kingway Brewery to raise to 73.82% after this deal.

In another story, Anheuser-Busch has made headlines recently as they are in the midst of a gender discrimination suit filed by the brewer's former highest-ranking female executive. This case has recently been sent to the Missouri Court of Appeals on Tuesday. Francine Katz, Anheuser-Busch's former vice president of communications and consumer affairs, alleges that she was given a smaller salary and bonuses than male executives. This case was originally filed in the St. Louis City Circuit Court in 2009 and is still making big headlines as it comes closer to conclusion. Anheuser-Busch wanted to try to settle the situation within the company's internal arbitration process but Katz has demanded her day in court. According to Katz, she raised numerous concerns about the pay disparity between 2002 and 2007 to Anheuser-Busch's CEO Patrick Stokes, former Chairman August Busch III, and former CEO August Busch IV. Apparently, little was done to remedy the situation until Katz finally decided that she was going to stand up for herself.

The last story this week is also about Anheuser-Busch, but certainly on a lot more positive note. A-B said Monday that it's glass bottle plant, Longhorn Glass Inc., is back in production after a $40 million upgrade and expansion. This glass plant supplies bottles to Anheuser-Busch's Houston brewery, including those for Budweiser and Bud Light. The factory now has one of the fastest glass-forming machines in the world. This overhaul allows Longhorn to increase production to 700 bottles per minute, which is up from their previous 600 per minute on one of its lines. Let's hope their sales will continue to rise through the nation's current tough times as the company has a great deal of funds wrapped up in the expansions and improvements they have made here. 

WELL, that's it for this week so..........................." Stay thirsty my friends!!!" 

Weekly Brewing News and Updates.....4/1/11

• BUD: $58.86
• SAM: $92.11
• TAP: $47.24

Well let's get straight to business this week. Obviously today was April fools day but nothing too exciting happened that caught me off guard or 'fooled' me. Instead, rather, a long day of work and then straight home to where I sit now bringing you your weekly brewing industry news. So let's get to business.
First off this week I want to talk about an article I read at minyanville.com posted by Matthew Mallon titled Top Alcohol Sales: The Year Booze Came Back. In this article, Mallon talked about how the recession hit the booze industry almost as hard as it hit everybody else. He states that all that bad news may have driven many of us to drink, but post-2008, we were downing the cheap stuff , switching out top-shelf brands for supermarket vodka. Alcohol sales declined overall in 2009 and into 2010, especially for premium brands, which makes 2011 an enticing time for adding some bottle service to your portfolio. Up-market sales are on the rise as customers are once again reaching for the high-end hooch, and he went on to talk about a few of the spirit-fueled companies poised to make a big splash in 2011 as a result.

 The first company he mentioned was Diageo (DEO). This company has a library of brand names from Guiness to Johnnie Walker to Smirnoff, which are all market leaders in their categories. Diageo is the world's largest alcoholic beverage conglomerate. Aside from producing the top-selling brands in almost every conceivable form of firewater, they also produce Captain Morgan (rum), Bushmills (Irish whiskey), Gordon's (gin), and Bailey's (liqueur). Diageo is also the world's biggest producer of Scotch, operating a vast range of single malt distilleries and blending plants. They HAVE been experiencing some tough times in Europe lately as the ongoing Eurozone implosion has affected consumption, but North American and Asian sales are on rise and analysts predict a 2011 acquisition spree by the conglomerate, possibly involving a little Jose Cuervo in their future????

The next company looking to make some significant improvements this year is Constellation Brands (STZ). They are currently the worlds largest wine company and home to some well-known names such as Robert Mondavi, Woodbridge, and Clos du Bois, not to mention beer brands such as Corona and Negro Modelo. They have been on a premium tear over the last decade or so, snapping up some high-end names while divesting value spirits and low-end wineries such as Inglenook and Paul Masson. Now, the company did take on a great deal of financed debt through their restructuring phase, but they are in a good position to make a strong comeback from their financial hardships as wine sales in the U.S. were up 4% last year and exports of American wine were up 25%. That is why this company will be well positioned to take advantage in a market with a great deal of continued growth potential.

The third topic this week is about the Fortune Brands (FO), who is home to Jim Beam and Maker's Mark as well as a catch-all of home/hardware brands brands and high profile golf names such as Titliest, recently announced it was going to spin off it's non-booze divisions and focus itself on the hard stuff, both existing brands and new acquisitions. Mallon states that to that end, it's Beam Global Spirits and Wine unit just picked up reality TV star Bethany Frankel's Skinnygirl line of "low-calorie" cocktails. Launched just a year and a half ago, the brand has quickly become one of the US ready-to-drink cocktail markets biggest sellers, which is part of a growing trend towards low-calorie spirits that Fortune is eager to exploit. Mallon also went on to say that was a wise move as women's alcohol consumption continues to rise while men's alcohol consumption has stayed relatively the same or decreased even. So, look for this company in the general alcohol market to put up some impressive numbers in the market this year and to make some astonishing growth.

The next company on the table for discussion in news this week is about Brown-Forman (BF.B), who is the owners of my personal favorite for an iconic brand which is Jack Daniels, as well as Southern Comfort, Finlandia and several other high-profile spirits. Brown-Forman was knocked around quite a bit during the recession as target drinkers went off-brand, but recently the company posted an unbelievable 30% improvement over the final quarter of 2010 compared to just a year earlier. The company, which generates 45% of its sales from good-old-boy tipple Jack Daniels, made its gains by selling off non-spirits related divisions including luggage and ceramics and turning their focus to international markets instead. This change of direction will continue to give them the needed momentum to move back to a market position they were once noted with.

The last company Mallon talked about was our American favorite Anheuser-Busch InBev.

Anheuser-Busch InBev is the dominant player in the beer biz and one of the five biggest consumer products corporations in the world. They currently have a 49% U.S. market share and unsurpassed global reach as they hold either the #1 or #2 market position in 19 countries. The companies sheer size and marketing muscle makes it a sensible long-term choice, and Mallon also stated that along with Anheuser-Busch, the number two US market leader Molson Coors and would be a smart move as well.

The last thing Mallon talked about was how although Molson Coors and Anheuser-Busch control the standard beer market, people should also take a look a something a little tastier and invest in the craft beer industry and companies like Boston Beer and the Craft Brewers Alliance because these tasty brews will only become more attractive as time goes on.
Well, thats about it for this week guys and girls, so until next week..........."stay thirsty my friends"!!