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A-B May Change 'Exclusivity'

Feb 25, 2008 - August Busch IV presented analysts with a positive outlook for 2008 despite the increasing price of production.

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Busch also indicated that A-B will look at a possible change to the "100 percent mindshare" program. The long-standing program was designed to entice A-B distributors to focus only on Anheuser-Busch brands. He said the program's current configuration may work against the brewer, because competing wholesalers were able to add more profitable beers. He did not give details of the planned changes.

Busch told analysts at the meeting last week that A-B is focused on raising U.S. beer sales and strengthening its core brands such as Budweiser, Bud Light, Natural Light and Busch beer.

The brewer plans to boost its total media spending by 10 percent this year. Together, Budweiser and Bud Light will get a 24 percent boost. Spending on digital media will jump by 55 percent this year.

"We believe we are adapting well to the changing landscape" of the U.S. beer industry, said Busch.

Faced with heavy cost pressures for barley and hops, A-B aims to wring out waste and inefficiency. "Project Blue Ocean," unveiled last year, could yield more than the originally planned $400 million in savings, Busch said. The cost-cutting and productivity program was first aimed at brewing operations and the supply chain, but has been expanded to other areas of the company, such as information technology.


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