<table border="0" align="right" width="210"><tr><td><img src="http://adage.com/images/random/0507/3-ABGraph-052807.jpg" border="1" align="right"></td></tr></table>A-B Branches Out, but Wall Street's Still Not Satisfied
After Analysts Encouraged Brewer to Expand, Some Say It Has Too Many Brands
By Jeremy Mullman
AdAge.com
May 28, 2007
CHICAGO - Anheuser-Busch just can't win.
As consumers stampeded to imports, craft beers and spirits, the brewer was forced to diversify its portfolio. It has snapped up at least 16 import brands during the past two years, becoming the nation's third-largest beer importer and pleasing analysts who were worried it was too dependent on the Budweiser franchise. But now investors are criticizing A-B for having too many brands.
The Clydesdale company's brand stable now includes Rolling Rock; Stella Artois and Bass Ale (for which it owns the import rights); and dozens of small-distribution, local craft and seasonal brands. It's even dabbled in energy drinks and spirits.
Analysts should be applauding the move, right? But some of them aren't. "The concern is they're trying to do too much at the same time," said Citigroup analyst Bonnie Herzog, who has been encouraging investors to sell A-B's rising stock. "It's a lot of change in a little time for a very big company."
<b>Juggling act</b>
Analysts and A-B executives agree market trends necessitated that the brewer broaden its portfolio. But doubts persist over whether it can keep sluggish core brands such as Budweiser and Michelob -- which account for the bulk of its sales volume -- growing while also learning how to market smaller but more profitable import and craft brands, which tend to require more hand selling and less media spending.
Full story in Advertising Age