anheuser-busch 2004AR_DomesticBeerOperations

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anheuser-busch 2004AR_DomesticBeerOperations

  1. 1. fresh. Barley: The soul of beer. There are two basic types of barley malt used in brewing beer – two-row, which produces a smooth, mild-taste, and six-row, which produces a crisp flavor.
  2. 2. domestic beer operations fresh ideas Fresh ideas were generated in every department at Anheuser- Busch in 2004. By thinking fresh about the industry and the competition, the company has positioned itself for 2005. Domestic Beer Continued Competitive Advantages image of beer through new packaging, new volume in a Challenging Industry Environment products, and new marketing initiatives. The millions of barrels In 2004, Anheuser-Busch increased its U.S. company plans to give adult consumers new 103.0 beer volume to an all-time high – 103 million and exciting product choices that challenge 102.6 barrels, more than 2.5 times the volume of the the established perceptions of beer. In short, second-largest U.S. brewer. Domestic market Anheuser-Busch is trying to add excitement to the 101.8 share was 49.6 percent in 2004, and Bud Light, beer industry and expand it over the long term. the No. 1 brand in the United States, grew by 1.5 million barrels. Bud Light maintained a 2- Fresh Products to-1 lead over the No. 2 light beer and racked Consumers have changing tastes, and Anheuser- 02 03 04 up its 21st consecutive year of growth. Busch aims to satisfy their preferences by introducing a variety of new products designed Combined, Bud Light and Michelob ULTRA grew to target a wide range of traditional and non- Domestic Beer by 2.7million barrels, and Anheuser-Busch increased traditional adult consumers. New products pretax profit its share of the light beer market to 41.6 percent in introduced into test markets in 2004 included millions of dollars $3,279.4 2004. In 2005, the company also won USA Today’s BE and Budweiser Select. As a result of strong Super Bowl Ad Meter for the seventh straight sales and consumer acceptance, the company $3,118.7 year and captured two of the top five slots. launched these brands nationally in 2005. In 2004, Anheuser-Busch also introduced two $2,919.2 Anheuser-Busch’s revenue per barrel, a key financial new Bacardi Silver low-carb line extensions: measure, increased by 2.5 percent in 2004. This Low Carb Black Cherry and Low Carb Green sixth consecutive year of 2.5 percent or higher Apple. These brands were the first low-carb 02 03 04 growth in revenue per barrel reflects a continuingly flavored malt beverages in the marketplace. favorable industry pricing environment. As the industry leader, Anheuser-Busch was the first major To meet beer industry challenges, Anheuser-Busch has brewer to infuse beer with caffeine, guarana and ginseng. embarked on a course to generate growth by enhancing the BE, a distinctive new product for contemporary adults, is well 9 _ 2004 Annual Report
  3. 3. domestic beer operations Fresh new products were a key part of Anheuser-Busch’s strategy in 2004. In 2005, expect to see some of these brands move from test market to national distribution. Following Prohibition, Budweiser was reintroduced and balanced with select hops and the aromas of blackberry, raspberry made available in cans. Also at this time, the first non- and cherry. BE is designed to appeal to those contemporary returnable bottles were used. The Bud Jr. 7-ounce bottle adults who are looking for beer with something extra. was introduced in the 1950s followed by the introduction of the Hi-Cone plastic wrap carrier for cans in the 1960s. The newest member of the Budweiser family, Budweiser Twist-off crowns that don’t require a bottle opener were Select, is a premium American-style lager with a crisp also introduced in the 1960s, and the end of that decade taste and a clean finish. Budweiser Select has 3.1 grams saw the first pull tabs for cans. Just a decade later, Budweiser of carbohydrates and 99 calories per 12-ounce serving. was being packaged in nondetachable tab-top cans. It continues the tradition of quality and great taste associated with the King of Beers and is brewed with Today, Anheuser-Busch is taking a fresh approach to two-row and roasted specialty malts for a rich color. packaging with the introduction of applied plastic labels on all Bud Light bottles. This marketing initiative, which The company’s two new Bacardi Silver products, Bacardi enhances the premium image for the brand, has been Silver Low Carb Black Cherry and Bacardi Silver Low Carb enthusiastically received by consumers. Rollout of the new Green Apple, have the lowest carbohydrates and calories of Bud Light labels began in 2004 and should be complete any flavored malt beverage in the industry. These new in early 2005. Budweiser Select will also have an applied premium malt beverages complement the existing line: plastic label featuring the Budweiser crown icon. Bacardi Silver, Bacardi Silver O3, Bacardi Silver Raz, and Bacardi Silver Limón. Another exciting package is the 16-ounce aluminum bottle. The new look, announced in 2004, is targeted for Innovative Packaging Budweiser, Michelob, Michelob Light, and Anheuser Anheuser-Busch has a long history of thinking fresh about World Select. The sleek new packaging is being its packaging. In the early 1870s, Anheuser-Busch used in high-end restaurants and bars to became the first U.S. brewer to use pasteurization generate awareness among contemporary adults in packaging its beer. During this time, the and retailers. company also put its trademark A&Eagle on its beer packaging and developed a paper label to The Budweiser brand will also give consumers a replace embossed labels. hands-on feel for the long-standing heritage of the brand. In 2005, the brand will introduce In the late 1800s, the company acquired its a limited-edition series of three vintage/retro first glass company, and other packaging cans. The first is a replica of the original can acquisitions followed. In 1901, Anheuser-Busch produced in 1936, the second is from the began capping its beer bottles, instead of using 1950s, and the third is from the 1960s. costly and unreliable corks. Anheuser-Busch Companies, Inc. _ 10
  4. 4. Dale Earnhardt Jr., who drives the #8 Budweiser Chevrolet in the NASCAR NEXTEL Cup Series, won the Daytona 500 in 2004. The Budweiser 8-pack was introduced in limited distribution in October 2004. It will be available in all race markets in 2005. Competitive Advantages Stronger was on Sept. 9, when Anheuser-Busch delivered Day Fresh and More Important Than Ever Budweiser and Bud Light to 200 cities across the United In 2004, Anheuser-Busch was – once again – the undisputed States to kick off the NFL season. leader of the U.S. beer industry, with 49.6 percent of the market. Being the industry leader for more than 45 years has No one can match Anheuser-Busch’s product freshness and allowed the company to develop strong competitive advantages. consistency. This is a tremendous competitive advantage in the beer industry in both the on- and off-premise marketplace. One key advantage Anheuser-Busch has over competitive The company will continue to leverage this advantage by U.S. brewers is its system of 12 breweries strategically located communicating the fact that fresh beer truly tastes better. Beer across the country. This network not only reduces freight that isn’t fresh tastes stale, and it has a strong aftertaste. The costs, but also gives the company a second competitive hallmark of Anheuser-Busch beers are their drinkability. advantage: the freshest beer of any major brewer. On average, Bringing America’s adults Day Fresh Beer would not be Anheuser-Busch beers are 14 days fresher than the possible without the dedication of Anheuser-Busch’s nearest competitor’s. This has led to one of the most wholesalers, another competitive advantage. With 69 successful consumer campaigns in the domestic beer percent of Anheuser-Busch volume going through industry: Day Fresh Beer, beer that has been packaged exclusive wholesalers, Anheuser-Busch has a and delivered for consumption on its born-on date. powerful strategic advantage that other brewers cannot come close to matching. This system, A key part of Anheuser-Busch’s marketing efforts in combined with additional resources the company is 2004 and beyond will focus on the company’s devoting to the on-premise market, gives Anheuser- freshness initiative. Last year, more than 5 million adult Busch a powerful team prepared to address on- beer drinkers tasted day-fresh Budweiser and Bud premise challenges and to pursue new opportunities. Light during freshness promotions. One key event 11 _ 2004 Annual Report
  5. 5. fresh. How to pour your beer properly. Step 1: Crack open a fresh, crisp Budweiser. Step 2: Pour directly down the center of the glass to produce a collar of foam, which will release the proper amount of carbonation. Step 3: Enjoy the best-tasting, freshest beer available.
  6. 6. Anheuser-Busch has supported about 400 community- In 2004, Anheuser-Busch met with its wholesalers to discuss based and national Latino organizations and special events new objectives and standards for on-premise marketing. with contributions of more than $45 million over the past These standards include an increase in on-premise sales call two decades. The company focuses on values that are visits and marketing activities, while maintaining a steadfast important to Latinos, such as education, leadership focus on draught beer service and product quality. development, economic empowerment, public advocacy, The company also announced plans to fund new and the arts and culture. In the last 22 years, the company marketing efforts on-premise. This initiative will has helped raise more than $22 million to provide more include adding staff in key markets where on-premise than 18,000 college scholarships to deserving Latinos. opportunities have been identified. In the African-American market, the company’s Budweiser Further plans call for adding excitement to the company’s and Bud Light brands combined have more than 30 brands through increased product sampling and more percent market share. Plans for this market include sports, support for on-premise chain customers. This process has music, and lifestyle advertising and sponsorships. 2.5 already begun in select casual dining chains. times the volume To think fresh means to look at the marketplace differently. For Anheuser-Busch, the process began when the company Anheuser-Busch sold more than started looking at its sales force differently. The changes to 2.5 times the volume of the second-largest U.S. brewer. its on-premise sales force will address improved retailer service, help enhance the image of beer, and position Anheuser-Busch’s portfolio of brands as the perfect beverages for all occasions. For more than a decade, Anheuser-Busch has supported the country’s largest annual African-American music celebration, Fresh Marketing and Sponsorships the Budweiser Essence Music Festival. The Bud Light Lounge While Anheuser-Busch continued its mainstream marketing enlists the hottest urban and hip-hop artists to host private programs in 2004, the company also mapped out plans to parties for adult consumers in various markets. Both revitalize its ethnic marketing programs. Anheuser-Busch has Budweiser and Bud Light sponsor First Fridays, the largest developed a fresh approach to enhancing its ethnic market gatherings of African-American professionals in the United leadership. For the Latino market, where Budweiser and Bud States that take place on the first Friday of each month. Light combined have more than 40 percent market share, the company’s marketing plan includes television, outdoor and Challenges Provide Fresh Opportunities print advertising, and music and sports sponsorships. As always, Anheuser-Busch continues to look for fresh ways of doing business. The company will address off-premise Noche de Pasion combined the hottest local and national Latin needs through its Seamless Selling initiative and pursue music acts with 3-on-3 soccer in 2004. For 2005, Esta Noche cost reductions through the Brewery of the Future program. Toca, a Latin version of Budweiser’s 1 Night Stand concert series, will feature artists such as Latin Grammy-winner Bacilos Seamless Selling is an excellent example of Anheuser-Busch in intimate settings. In addition, Anheuser-Busch’s Budweiser innovation. By working with its wholesaler team, Anheuser- and Bud Light brands sponsor parties for viewing the Mexican Busch is meeting the growing needs of its chain customers. National Soccer Team and FIFA World CupTM Qualifier games. Seamless Selling offers all retail customers greater value through improved inventory management, data-based Anheuser-Busch’s support for the Latino community dates selling, electronic transactions and more effective account- back more than a century. In the 1880s, the company level planning and service. delivered the first Spanish-language sales catalogs to Anheuser-Busch will continue to reduce costs through retailers and businesses in Texas, Arizona, and New Brewery of the Future, as it has since the program was Mexico. In the late 1890s, the Escalada Brothers of instituted in 2002. This initiative is raising the efficiency and Nogales, Ariz., were the company’s earliest Hispanic effectiveness of overall brewing operations. For 2005, business partners and beer distributors. Anheuser-Busch’s Anheuser-Busch plans to continue to maintain the high level commitment to the Latino community is an integral part of quality and consistency that is a hallmark of all its brands. of its business tradition. 13 _ 2004 Annual Report

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