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President Makes Cryptic Comments at Industry Conference

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CHICAGO ( -- The president of beer giant Anheuser-Busch said at an industry conference yesterday the company contemplated buying its way into the spirits business, according to executives who attended the meeting.
August Busch IV said there has been a lot of internal dialogue about making an acquisition outside of beer.

Internal dialogue
In response to a question, August Busch IV said there has been a lot of internal dialogue about making an acquisition outside of beer, according to executives at the conference. No deal is imminent.

In his online newsletter "Beer Business Daily," editor and publisher Harry Schumacher wrote, "When asked if A-B would ever consider acquiring a spirits brand, August said that it wasn't in the short-term plan, but that nothing is off the table."

"Beer Business Daily" sponsored the conference.

Might develop own products
An executive who attended the conference said Mr. Busch did not identify any potential targets. Mr. Busch also said the company might go into higher or lower alcohol products on its own but didn't elaborate, the executive said.

A March 1 note from UBS analyst Caroline S. Levy said: "We believe a transaction makes strategic sense, but expect the challenge to A-B will be finding an affordable transaction, as other spirits companies can likely bid higher due to synergies.

"That said, we do not believe a deal is imminent," the note said.

An A-B spokesman didn't immediately have a comment.

Rising spirit sales
Mr. Busch's remarks come as Anheuser-Busch and other brewers struggle to grow while spirits sales are on the rise. Spirits have taken share in bars and nightclubs.

Anheuser-Busch has retaliated by stepping up bar promotions –- a key part of spirits marketing -– and rolling out new products. One of them, pronounced "B-to-the-E," is a caffeine- and ginseng-infused brew aimed at 20-somethings who imbibe vodka-and-Red Bull drinks and sweet cocktails.

Separately, Mr. Busch said Anheuser-Busch will emphasize the "clean finish" message in its advertising for the newly launched Budweiser Select beer, according to the report. Wholesalers were worried ads hyping the beer's lack of aftertaste would cast a pall on other Anheuser-Busch beers.

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