Budweiser drops to #4 beer in USA

A Professor's Perspective on Current Events

January 24, 2018 Professor's Perspective

Professor Michael Roberto, D.B.A.
By Professor Michael Roberto, D.B.A.

Budweiser drops to #4 beer in the USA. Consolidation has not helped the ‘King of Beers’ regain its crown. The ‘King of Beers’ needs help, and the solution won’t come from further deal-making.

This article originally premiered on Fortune.
Fortune reports that Budweiser is now the #4 beer in America. Thirty years ago, Anheuser Busch sold 49.2 million barrels of the core Budweiser brand in the United States, accounting for more than one in four beers sold. In 2016 the company only sold 14.4 million barrels of Budweiser. Today, Bud Light is the #1 beer in America, and the traditional Budweiser brand has fallen behind both Coors Light and Miller Lite.

 

Of course, Budweiser’s struggles are not unique.  Bud Light has lost volume as well over the past decade, as Americans turn to craft beers and imports.  According to Fortune, the top ten brands account for only 50% of the beer sold in America, whereas they once accounted for 2 out of every 3 beers purchased by consumers.

This article is part of our Professor’s Perspective series—a place for experts to share their views and opinions on current events.

The beer industry has consolidated dramatically in recent years, as brewers engaged in a wave of mergers and acquisitions.  While they have achieved considerable cost synergies, these mergers have not solved the fundamental growth problem that the mainstream brands have in the United States.  Consolidation often occurs when companies experience top line pressures.  That may help improve earnings in the short run, but often mergers do not recharge growth.  The King of Beers needs help, and the solution won’t come from further deal-making.

For more with Professor Roberto, check out his courses Wondrium!

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