Anheuser-Busch InBev (BUD) (ABI.BR) continues to feel the heat in its US business volumes. In the second quarter ending June 30, 2015, the company’s consolidated volumes in the US were down 1.9% to 28.4 million hectoliters. Organic volumes, which exclude the impact of acquisitions and divestitures, declined by 1.1% on a year-over-year basis. This compares to a 6.0% decline in 1Q15.
Impacts on the US business
Americans are increasingly showing their preference for craft beer and imported brands. Plus, wine and distilled spirits, or liquor, are also eating into beer’s market share. Aside from the US volumes of Anheuser-Busch InBev, volumes of rival MillerCoors have also been weak. In 1Q15, sales to wholesalers (or STW) volumes of MillerCoors declined by 2.3%. MillerCoors is a joint venture between Molson Coors (TAP) and SABMiller (SBMRY) (SAB.L).
Constellation Brands (STZ) is riding high on the growing demand for imported beers. It has the rights to sell some of the top Mexican beer brands in the US, including Corona Extra, Corona Light, and Modelo Especial. The rights to these brands were sold to Constellation Brands in 2013 by Anheuser-Busch InBev in order to gain regulatory approval for the Group Modello acquisition.
Initiatives to improve volumes
In June 2015, Anheuser-Busch InBev announced an investment of over $1.5 billion toward product development and sustainability efforts in the US. The company is also investing in marketing programs to boost the sales of its popular brands. To capture the growth in the craft beer category, the company also acquired craft brewers like Elysian Brewing, Blue Point Brewing, and 10 Barrel Brewing. The company is also promoting its above-premium brands like Michelob Ultra, Stella Artois, and Goose Island.
The company expects industry volumes to improve in fiscal 2015, compared with the previous year.