Dive Brief:
- AB InBev’s Anheuser-Busch will invest $20 million in its flagship St. Louis brewery and a Missouri can plant to produce its top-selling beer brand Michelob Ultra.
- The beer giant said the funding will go toward upgrading brewery and packaging equipment at the St. Louis brewery and a can plant in the suburb of Arnold. The investment will also be used to open a new technical skills training center in the flagship brewery.
- The project is the first to be announced since Anheuser-Busch said it would double its investment in U.S. manufacturing to $600 million.
Dive Insight:
Bud Light owner AB InBev is investing to maintain its top position in beer as it outperforms the rest of the alcohol industry, which is struggling with a decline in consumption and a shift to nonalcoholic alternatives.
Michelob Ultra became the top selling beer by volume last fall, posting strong results alongside Busch Light. Both brands were the top two volume share gainers in the first quarter, executives said.
"We are gaining share on the key markets that we operate and the choices we made to invest for the future portfolio are gaining momentum and paying off," Michel Doukeris, AB InBev’s CEO, said on an earnings call last month.
Anheuser Busch's manufacturing investments have spanned facilities across the country. The latest $20 million is the second time the brewer has invested in its flagship brewery in the past year. It committed to spending $15 million on the plant last August.
Anheuser-Busch has expanded its manufacturing investments as executives remain hopeful that sales declines have bottomed out, especially with sporting events including the FIFA World Cup set to boost demand.
“At the end of the day, beer is big, it is growing, it is gaining share," Doukeris said on the call. "It's a category that's part of people's life for every moment of celebration for more than 5,000 years and it's not going anywhere, to be honest.”
