According to Anheuser-Bush, the beer industry declined 0.6% in 2014, after a 1.8% decline in 2013. In 2015, l beer sales for AB were still weak. Anheuser-Bush’s top beer brand sales to distributors and retailers continue to drop as the demand for independent craft beer increases. According to Brazilian entrepreneur Ricardo Guimarães, beer sales in Brazil are still strong although Anheuser-Bush market share position in that country is weak. Brazilians love their domestic beer and replacing their favorite brand is not going to happen anytime soon, according to Mr. Guimarães.
Anheuser-Bush recently introduced a distributor incentive plan in the United States that could put more than $200,000 on a distributor’s bottom line. AB is willing to reimburse distributors half of their display and marketing costs if they promote AB InBev craft beer brands. Mr. Guimarães is a soccer fan and a beer drinker/investor, and he thinks the AB InBev plan will hurt American consumers. He bases his opinion on the Brazilian market. For years, the Brazilian government did not allow foreign beer in the market because the government owned a piece of the top brewery in Brazil.
When distributors only push beer from one brewery, consumers suffer and the small breweries are faced with bankruptcy. Guimarães is the president of the BMG Bank and the bank is the biggest sponsor of soccer clubs in Brazil. Soccer fans drink a lot of domestic beer and he thinks the AB InBev incentive plan will hurt sports fans that want their favorite beer at different sports events. The incentive plan will restrict consumer choices. The Department of Justice knows about the AB incentive plan. The DOJ may agree with Guimarães once they complete their investigation.
The beer market, like all the other markets in the United States, is going through a metamorphosis as a new generation takes over as the target consumer market. Old brands like Bud, Bud Light, Miller and Miller Lite don’t appeal to young beer drinkers and Anheuser-Bush is trying to protect their bottom line with the new incentive plan. But in spite of plans, the new generation of American consumers will decide want they want to drink. Young beer drinkers will find their favorite brew in spite of incentive plans. Beer drinkers have always made sure their brand is available at retail because that’s what beer drinkers do.