Anheuser-Busch Says It Will Restore Volume Growth

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Anheuser-Busch Says It Will Restore Volume Growth

06/01/2005
Without question, the beer category is under pressure, but Anheuser-Busch executives are confident their products and marketing strategy will stimulate growth. In a recent address to analysts and investors, the company’s President and CEO, Patrick Stokes stated: "With our new product, packaging and marketing programs, we are confident we will be successful in restoring our volume momentum."

"Facing challenges is nothing new to Anheuser-Busch and, time after time, we have emerged more profitable with a stronger foundation for future growth,” he added. “We expect significant improvement in domestic beer sales and profit performance in the second half of this year and continue to target double-digit earnings per share growth over the long-term."

Anheuser-Busch has identified four critical marketing priorities:
• Although beer is America's favorite beverage with 58 percent of overall alcohol servings, Anheuser-Busch will continue to improve the image and desirability of beer.
• Beer must be kept “fun and social.”
• Beer occasions must be grown and extended.
• Retail execution must continue to be improved.

Company executives also discussed the successful launch of Budweiser Select in February. The brand has performed very well, according to company officials, achieving a 1.9 percent share in supermarkets, according to IRI scan data.

While the domestic beer company has increased tactical price promotions this year on a specific market, brand and package basis to reduce price premiums versus competition, company executives confirmed that the company's long-term pricing strategy continues to target increases at or slightly below the consumer price index.

Stephen J. Burrows, CEO and president of Anheuser- Busch International Inc., highlighted the importance of the international beer segment in contributing to the company's earnings growth. Since 1999, the international segment has contributed 28 percent of Anheuser-Busch's consolidated earnings growth, driven primarily by the company's 50 percent investment in Grupo Modelo in Mexico.

Looking to the future, Anheuser-Busch has built an excellent platform for growth in China, the world's largest and fastest growing beer market. Anheuser-Busch and its partners now account for 45 million barrels of beer volume in China and together have a 19 percent share of the market.