Beer Gaining Ground

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Beer Gaining Ground

ST. LOUIS -- Anheuser-Busch (A-B) has released data from the annual Gallup poll on American adults' drinking habits, which found that consumption for wine has decreased, while beer consumption increased five percentage points since last July.

Of those Americans who drink alcohol, 41 percent chose beer most often, the poll showed. Beer remains the largest segment of the alcoholic beverage category in volume and dollar sales, and accounts for approximately 60 percent of alcohol beverage sales, the company reported.

"Today's adult consumers have more choices than ever before," said Bob Lachky, executive vice president of global industry development for A-B. He noted that with industry developments in packaging and programs, "brewers and wholesalers are working hard to remind Americans of beer's role in our culture. It's great to see people are responding."

In other A-B news, the St. Louis-based company will give its report on its second quarter earnings today, focusing on its expansion into the malt beverage category.

A-B President August Busch IV told an industry group in June that if beer kept losing to liquor and wine, the company would have to consider expanding beyond its traditional beer offerings. That same month, A-B nailed down exclusive contracts with the National Football League to be the exclusive alcohol sponsor for its Super Bowl through 2012.

A-B has faced challenges with European brewer Budejovicky Budvar, who also claims the nickname "Bud" for its brew. In June, the Board of Appeal for the European Union's Office for Harmonization in the Internal Market said A-B can register "Bud" throughout Europe.

A-B bought the Rolling Rock brand in May from InBev USA for $82 million. Next month, it is expected to start brewing the brand at its own breweries.

Analysts predict 76 cents per share profit on revenue totaling $4.17 billion, according to a poll by Thomson Financial. However, "on the cost side, we do not think A-B will be impacted by the recent run-up in aluminum prices, as we think A-B is operating under price caps in North America. In addition, we believe there could be upside to our equity income estimate given the ongoing strong trends for Corona," said Bank of America analyst Bryan Spillane. A-B owns 50 percent of Grupo Modelo, which owns Corona.

One question that remains to be answered is from Morgan Stanley analyst William Pecoriello. He asks, "A-B needs to diversify its profit mix away from domestic beer segment. Will it choose spirits and wine and/or more international beer expansion?"