Anheuser Busch Inbev NV (ADR) (NYSE:BUD) is planning to attract local beer drinkers by adopting a new beer label strategy for its Budweiser brand.
The company aims to produce limited-time-only labels for its Budweiser brand to tap into the local beer trend and the overall aim is to attract more local sales. The firm has breweries in 11 states and the new strategies also seek to recognize these states. The strategy is not expected to significantly boost sales though it highlights the fact that the company which is currently the biggest brewer has been addressing the changes in the beer industry. The changes in the beer landscape are as a result of the craft beer revolution.
“The demise of the craft beer industry has been greatly exaggerated,” stated a recent Motley Fool report.
The industry has been characterized by slowing growth
The U.S craft beer industry has been experiencing very slow growth. The industry registered only 6 percent growth in 2016, which was a far cry from the double digit growth it had registered in the previous year. The slowed trend can be attributed to a combination of factors. The industry continues to experience growth. However, there are more than 5,200 breweries currently in operation in the U.S. This is the highest number of craft breweries that have ever existed in the country. The massive number means the growth margins for each firm are smaller now than they were a few years ago.
The massive number of craft brewers in the industry has been negatively affecting major brewers such as Molson Coors Brewing Co (NYSE:TAP). Anheuser-Busch has also been affected but the firm has also been acquiring other craft brewers. Major craft brewers such as Boston Beer Company Inc (NYSE:SAM) have also been feeling the effect. The latter has been experiencing slowed shipments to retailers and distributors. Shipments and sales to distributors are also known as depletion. Boston Beer stated in its latest quarterly earnings report that depletion dropped by 3 percent year over year.
Anheuser Busch stock closed the latest trading session on Friday at $120.03 after a 0.20 percent growth compared to the previous close.