Dive Brief:
- Anheuser-Busch InBev NV announced it would invest more than $1.5 billion in its U.S. operations by 2018, including "an estimated $850 million on brewery and packaging expansion projects, $220 million on product innovation initiatives and $720 million in sustaining and increasing efficiency of its existing footprint," according to a statement.
- This investment follows the more than $1 billion the company spent in the U.S. from 2011 to 2014, which covered expenditures such as "resources to maintain state-of-the-art brewing processes, advance environmental projects, and install equipment for new products and innovations," according to a statement.
- Two notable expenditures in this most recent round of investments are a $150 million expansion project in St. Louis, where it plans to increase production of Bud Light aluminum bottles, and $11 million for product innovation, development, and integration, including Bud Light MIXXTAILs and Oculto tequila-flavored beer, across multiple breweries.
Dive Insight:
AB InBev hasn't had the smoothest sailing back home, where falling volumes in the U.S. led to a 1.2% drop in sales volume in fiscal Q1 2015. In November, AB InBev cut U.S. jobs, by an undisclosed amount, but estimated in the hundreds, in addition to reorganizing and consolidating its sales force and reducing its number of sales regions. AB InBev's latest investment announcement could recoup some of these lost jobs as breweries, product development, and other operations are expanded throughout the country.
Craft beer has been one target for AB InBev's U.S. investments. Over the past five years, AB InBev has moved to acquire four craft breweries, including announcing it would acquire Elysian Brewing Company in January. Another craft acquisition, 10 Barrel Brewing Co., came in November, and less than a year later, AB InBev has already set the goal to double production within the next 12 to 18 months, said Pete Kraemer, AB InBev's vice president of supply.