anheuser-busch BUD07_Annual_Report_InterBeerOper


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anheuser-busch BUD07_Annual_Report_InterBeerOper

  1. 1. 14 ANHEUSER-BUSCH COMPANIES, INC. 2007 ANNUAL REPORT I N T E R N AT I O N A L B E E R O P E R AT I O N S Budweiser and other Anheuser-Busch brands are sold in key beer markets worldwide through Anheuser-Busch International, Inc., the company’s international beer subsidiary. In 2007, international sales volume including equity volume was 57 million barrels, a 5.2 percent increase over 2006. Net income for the international segment has grown an average of 20 percent per year since 1999 and was up 13.4 percent for 2007. Anheuser-Busch has a presence in a number of important international markets. MEXICO ABOVE: Anheuser-Busch sells Budweiser and other Mexico is a market with both solid volume growth and good profitability. The company’s 50 percent brands in leading beer equity investment in Mexico’s leading brewer, Grupo Modelo, represents the majority of Anheuser-Busch’s markets around the world. international profits. Modelo’s flagship brand, Corona, is the fifth best-selling beer in the world, and the In addition to its wholly owned Budweiser and company maintains a 56 percent share of the Mexico beer market. Modelo is the exclusive importer of Harbin operations and Budweiser and Bud Light, with Bud Light being the No.1 brand in Mexico’s rapidly growing import its alliances with Tsingtao segment. Sales of Budweiser and Bud Light were up 27 percent in 2007. and Grupo Modelo, the company has licensed brewing and distribution In addition to Modelo’s strong contribution to Anheuser-Busch’s earnings growth, Modelo’s cash dividend agreements with some of to the company was $403 million in 2007, an increase of more than $160 million. The market value of the world’s leading brewers. Anheuser-Busch’s investment in Modelo is now worth approximately $10 billion, compared with the original $1.6 billion investment. CHINA Anheuser-Busch has a strong foundation in China, the largest and fastest-growing beer market in the world, having successfully operated in the country for more than 12 years. Through its wholly owned Budweiser and Harbin operations, plus a 27 percent equity stake in Tsingtao, Anheuser-Busch is well-positioned to capitalize on the long-term growth opportunity in China. Budweiser is the No.1 super-premium brand in China, and as part of the company’s growth strategy, the company is expanding it into 100 new markets by 2010, allowing the brand to reach an incremental 250 million new consumers.
  2. 2. 9.9 % + Net Sales 5.2% + Volume 12.8 % + Equity Income
  3. 3. 16 ANHEUSER-BUSCH COMPANIES, INC. 2007 ANNUAL REPORT 2 0 07 H I G H L I G H T S F R O M AROUND THE WORLD CHINA Anheuser-Busch began importing Corona in China. On July 7, Budweiser launched a monthlong, nationwide bike riding tour in China to celebrate the one-year countdown to the Beijing 2008 Olympic Games. INDIA Anheuser-Busch partnered with Crown Beers International, Ltd. to brew and distribute Budweiser and local brands in southern India. Budweiser production began in May in a new brewery. CANADA Bud Light volume grew nearly 30 percent in 2007 with support from innovative marketing programs and sponsorships such as the National Hockey League, Toronto Blue Jays and Wakestock — Canada’s largest action sports festival. PANAMÁ Anheuser-Busch and Cervecería Barú Panamá, owned by Heineken International, signed a license agreement to brew and distribute Budweiser in Panamá. It is the first time in Budweiser’s 130-year history the brand will be brewed in Central America. COLOMBIA Anheuser-Busch and Heineken International de Colombia S.A. signed an agreement in February for Heineken to import, distribute and market Budweiser. UNITED KINGDOM In mid-March, Anheuser-Busch began importing Estrella Damm Barcelona, the flagship beer brand of Grupo Damm, to the United Kingdom. RUSSIA Anheuser-Busch continues to expand distribution for Bud throughout the top-10 markets in Russia, including Moscow and St. Petersburg. ARGENTINA Budweiser grew at a double-digit rate for the fifth straight year in Argentina.
  5. 5. 18 ANHEUSER-BUSCH COMPANIES, INC. 2007 ANNUAL REPORT To support this growth, in April 2007 Anheuser-Busch announced it would build in Foshan, China, its first international greenfield brewery. It is scheduled for completion in late 2008. The Beijing 2008 Olympic Games is an important event for China and with Budweiser as its official international beer sponsor, provides an excellent vehicle for reinforcing Budweiser’s super-premium global beer image. Anheuser-Busch’s ownership of China’s oldest brewer, The Harbin Brewery Group, Ltd., which was acquired by the company in 2004, has enabled the company to compete in the fast-growing Chinese premium segment with a well-known brand. Since purchasing Harbin, Anheuser-Busch has expanded the Harbin premium brands to more than 70 new markets outside northeast China, the company’s traditional stronghold. Anheuser-Busch also has an important strategic alliance with Tsingtao Brewery Co., Ltd., one of China’s oldest and largest brewers. Tsingtao beer is the No. 1 brand in the domestic premium segment and the No. 2 brand in the super-premium segment behind Budweiser. The premium and super-premium segments are the fastest-growing segments in the Chinese beer industry. Tsingtao had an excellent year, with increased volume and profits. INDIA In India, Anheuser-Busch and Crown Beers International, Ltd., formed a joint venture to brew, market and distribute Budweiser and other brands in India. The joint venture includes a new state-of-the-art brewery in the southern city of Hyderabad that was completed in March 2007. In June, the first locally produced Budweiser became available in southern and western India, just after the introduction of Armstrong, the joint venture’s new premium strong beer. India, with its strong economy, large population and a growing middle class, offers good long-term potential for Anheuser-Busch. UNITED KINGDOM While business in Asia saw significant growth, in the United Kingdom Anheuser-Busch faced diffi- cult industry conditions in 2007. Several factors — including excise tax increases and new bans on smoking in pubs and restaurants, combined with unfavorable weather — affected volume, which was down 9.6 percent for the year. The company is taking measures to reduce its cost structure while introducing fresh marketing to capitalize on Budweiser’s strong image in the country. CANADA In Canada, Anheuser-Busch has a very successful partnership with Labatt Brewing Company, Ltd. Anheuser-Busch and Labatt first partnered in 1980 and today have a licensed brewing, distribution and joint marketing agreement. Budweiser is the No.1 beer in Canada, and Bud Light is the country’s fastest-growing beer and seventh best-selling beer brand, with Bud Light volume growing 30 percent in 2007. The company continues to build its business and pursue growth internationally. Anheuser-Busch is well-positioned to sustain growth in its overseas operations. Anheuser-Busch International sells Budweiser in more than 80 countries.
  6. 6. 19 ANHEUSER-BUSCH COMPANIES, INC. 2007 ANNUAL REPORT Budweiser is brewed locally in 12 countries outside the United States under the direct supervision of Anheuser-Busch brewmasters.