Am Inbev Case

Beer growth has slowed since the 1990's with the exception of the low-carb and low calorie drinks, due to the increased health consciousness of consumers. Last year, four out of the top 5 selling domestic beers are light-beers and in 2010, Bud Light became the world's top-selling beer, surpassing Budweiser. Beer companies are hurriedly jumping on this bandwagon. Miller Coors released MGD 64 as their low-calorie product, and Molson Coors of Canada launched Molson Canadian 67, along similar product lines. What has AB InBev done to profit on this trend? Early this year, they launched their new product, Select 55, with only 55 calories and 1.9 grams of carbohydrates. Another trend is the growing popularity of craft beers. Craft beers are defined as beers produced in microbreweries and which are made with 100% malted barley. These have risen in popularity against global, mass produced lagers such as

Budweiser and Bud Light. To use this trend to their advantage, AB InBev launched Bud Light Golden Wheat, which is a premium light unfiltered wheat beer that targets the tastes of the craft beer drinkers.

AB InBev is in a good position to tackle these trends. International growth is more feasible now with the merger of the two companies, allowing for more growth globally. AB InBev continues to have a presence in emerging markets such as China and Mexico, which should prove very profitable in the long run. Also, new product releases are helping AB InBev ride the popularity of light drinks and craft beers.

Anheuser-Busch InBev had far lower current and quick ratios than their competitors in 2010 but outperformed them in 2011. The low amount of current liabilities was mainly due to the absorption of the debt of Anheuser-Busch. The new firm decreased a large amount of their liabilities and now stands in far better shape. We see this as a good sign of their commitment in reducing debt. There is still room for AB InBev to improve both ratios as they still lag behind the industry median.