Budweiser: King of Beers??

10Nov09

After analyzing some current trends within the beer industry, here are some key challenges that brands like Budweiser and Coors are now facing in recent months.

1. Distribution wholesalers are consolidating

• Fewer distributors means distributions have more negotiating power breweries

short-term solutions: negotiate and leverage your network

• Evaluate whether maintaining relationship is worth losing the value of the product

long-term solutions: invest in ownership of distribution network

• This way the beer companies can take ownership over prices

2. Commodity prices are increasing for barley

• Brewers across the world are hiking prices to compensate for lower sales volumes

Note : Combined with the strong preference for beer brands, the stronger the product’s equity with the consumer, the greater the ability to pass input- cost increases to the consumer. Since barely is affecting all of the beer brands, they are all likely to increase their prices.

-cc

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Tags: beer, budweiser, coors