Anheuser-Busch now has more than half of beer market sales

Friday, April 25, 2003

ST. LOUIS -- Pop open a cold one tonight and there's half a chance it's an Anheuser-Busch product.

In fact, a little better than half a chance.

Among the usual assortment of information about another strong showing in the brewery's first-quarter earnings report Wednesday -- net income up 6 percent, earnings per share up 11.8 percent -- was the news that the company's domestic market share rose to 52.1 percent from 49.5 percent.

Based on those numbers, more than half of all beers purchased in the U.S. are Budweiser, Bud Light, Michelob, Busch or others from the St. Louis beer-maker.

Industry experts say quarterly market share figures are somewhat misleading and reflect shipments to distributors, not necessarily beer sales. True market share figures are based on full-year numbers.

Still, Harry Schuhmacher, editor of Beer Business Daily, expects Anheuser-Busch to officially top the 50-percent mark in 2003.

The formula, he said, is simple.

"They're smart, they're rich and they make a great beer," Schuhmacher said.

Juli Niemann, an analyst for RT Jones in St. Louis, said marketing and understanding of the target audience are keys to the company's success.

"What they're trying to do is promote their specialty things that have higher markup. And, shocking, they're targeting younger men," Niemann said.

"The only question is how much is the overall beer market going to expand. Total market growth is always in question, and that's a matter of demographics."

Bud Light is the best selling beer in America, topping Budweiser, still king of the full-calorie beers. Both are way ahead of the competition. The combined sales of No. 2 light beer Coors Light and No. 3 Miller Lite are slightly less than sales of Bud Light, according to figures from Beer Marketers Insights. Budweiser has about four times the sales of the next highest full-calorie beer, Busch.

Last fall, Anheuser-Busch introduced Michelob Ultra, a low-carbohydrate beer that has already taken hold of 1.5 percent of the beer market, Schuhmacher said.

"They're good innovators," he said. "Coming out with a low-carb beer in our health-conscious society was a wise move."

At the Anheuser-Busch annual meeting Wednesday in Orlando, Fla., president and chief executive officer Patrick Stokes said the company has the ability to continue to increase market share.

"Anheuser-Busch's continuing success reflects our ability to capitalize on favorable domestic beer industry fundamentals," Stokes said.

For the rest of 2003, Anheuser-Busch projects 12 percent earnings per share growth.

The family of beers keeps growing, too. In addition to Michelob Ultra, the company recently launched Bacardi Silver, a so-called malternative beverage. And later this year, two other new products, the lager Anheuser World Select and the stout Bare Knuckle, could be ready. Test marketing for both is just beginning.

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