Anheuser-Busch to spend $1B on hard seltzer, sustainability in US plants - Food Dive

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Dive Brief:

• Anheuser-Busch will invest more than $1 billion in its U.S. facilities during the next two years, the company said in a statement. As part of this investment, the brewer, part of AB InBev, said it will spend close to $400 million in 2021 at its 12 major Anheuser-Busch breweries. 
• Of this total, Anheuser-Busch will spend more than $50 million this year on new seltzer brewing capabilities, and more than $100 million for new lines to produce cans, which have increased in demand as people consume more at home during the pandemic. During the next two years, Anheuser-Busch said it will spend nearly $100 million on sustainability projects, including solar-panel installments and water treatment.
• The fast-growing hard seltzer category is one of the bright spots for the beer industry, which has struggled as consumers drink less beer than previous generations, and turn to other alcoholic offerings more frequently. Nearly every major beer company with a presence in the U.S. has introduced at least one hard seltzer offering.  

Dive Insight:

While Anheuser-Busch was relatively late to the hard seltzer trend, it is spending big money and rolling out a slew of offerings to attract consumers across many of its most popular brands.

It joins other major brewers upping production to keep pace with the booming hard seltzer category. Molson Coors announced last December it was increasing production capacity for seltzers and popular innovations by more than 400%. The beer giant said sales of Vizzy, Coors Seltzer, Blue Moon LightSky and other offerings continue to soar nationwide.

Anheuser-Busch, part of AB InBev, has invested heavily in hard seltzer in recent years, introducing Bud Light Seltzer, Natural Light Seltzer, and cocktail-inspired hard seltzers. Earlier this year, Anheuser-Busch launched Michelob Ultra Organic Seltzer, the first-ever national USDA-certified offering in the category, targeting the mature hard seltzer consumer who is 35 to 54 years old. Each product is aimed at different areas of the alcohol market, a factor the company believes will give it a competitive advantage. 

"As we continue to grow in [hard seltzers] and that segment continues to expand, we need to make sure we are investing in our facilities to keep up with the demand from consumers," said Cesar Vargas, Anheuser-Busch's chief external affairs officer. "We are really doubling down on investing and making sure we have the capacity to grow and lead in this exciting new seltzer segment."

So far, Anheuser-Busch's move into hard seltzer seems to be paying off. Evercore ISI reported last month that seltzer sales are strong to begin 2021, with Mark Anthony Brands' White Claw and Truly, owned by Boston Beer, collectively holding 75% of the market, according to Seeking Alpha. Bud Light Seltzer had 9.7% market share, with no other seltzer brand above 3%.

With its early success and the hard seltzer category showing no sign of slowing down, Anheuser-Busch no doubt wants to capture as much growth as it can. The fact that Anheuser-Busch and Molson Coors are spending millions in order to meet future demand speaks to the sustainability of the category.

In addition to the products, Anheuser-Busch plans to spend close to $100 million on sustainability projects during the next two years. A survey released last April by global management and consulting firm Kearney found the number of consumers who take the environment into consideration when making purchases has increased — even since the pandemic started. In 2019, 71% considered the environment at least occasionally when making a purchase. This past April, after several weeks where most people stayed at home to deter coronavirus spread, 83% of consumers said they considered the environment when purchasing.

With this in mind, any sustainability measures that companies such as Anheuser-Busch take could carry over into product sales — meaning a $100 million investment now not only pays off in terms of helping the environment but it also could help the company's bottom line later on. AB InBev, which requires large amounts of land to grow its rice, hops and barley, and uses large sums of water, has been particularly active in aiming to reduce its impact.

Committing "to a healthier planet is a fundamental aspect of making sure that we can sustain our own operations, our own business for the future," Vargas said. 

AB InBev partnered with miner Rio Tinto to deliver new sustainable aluminum cans, and it pledged that by 2025 all Budweiser beers brewed globally will use 100% renewable energy. The brewer also is curtailing water use by improving site-water runoff and water flow off the lot at its rice mill in Jonesboro, Arkansas. It also has partnered with universities to create a technology that curtails water use by up to 30%.

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February 04, 2021 at 11:39PM
https://www.fooddive.com/news/anheuser-busch-to-spend-1b-on-hard-seltzer-sustainability-in-us-plants/594480/

Anheuser-Busch to spend $1B on hard seltzer, sustainability in US plants - Food Dive

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