Dive Brief:
- AB InBev’s U.S. subsidiary Anheuser-Busch has acquired non-alcoholic beverage maker Hiball, according to acompany press release。Hiball plays into two of the fastest-growing beverage categories — energy drinks and sparkling juices — with brands like Hiball Energy and Alta Palla.
- "The combination of Hiball's category-leading organic energy drinks and Alta Palla's organic sparkling juices and sparkling waters together with our network and operational know-how will create tremendous growth opportunities for these brands...Our goal is to deliver Hiball products to new markets, while preserving their culture and brand identities,"Anheuser-Busch president and CEO Joao Castro Neves said in therelease。
- Founded in 2005, San Francisco-based Hiball Energy is a small-scale buy for AB InBev. The beverage maker’s annual sales are estimated to be around $40 million.
Dive Insight:
Looking for acquisitions outside its core beer business makes a lot of sense for AB InBev. Mainstream beer demand, and with it production, has fallen flat in recent years as consumer preference shifts toward craft beers, wine and spirits.
According tostatistics from the U.S. Treasury Department, Americans' thirst for beer and U.S. production levels have dropped in recent years. In 2013, the U.S. produced 191.1 million barrels of beer. That slipped to 189.2 million barrels in 2016. Anheuser-Busch's top-selling brew — andAmerica’s most popular beer brand—Bud Light has seen market share slip from 19% to 16% since 2010.
Meanwhile, the market for better-for-you non-alcoholic drinks and sparkling juices and water has been bubbling up lately. These categories indeed are high growth and high margin — just what Neves said the company is after.
Bottled water category volume grew 9% in 2016,overtaking carbonated soft drinksas the largest beverage category in volume in the U.S. But specialty waters with sparkling, mineral and functional applications are the category’s biggest winner,growing 75% between 2014 and 2016。Research firm Mintel anticipates growth will continue at this lofty pace through 2020.
AB InBev has taken steps — albeit baby ones — to broaden its U.S. portfolio in recent years. It recently acquired craft beer makerWicked Weed Brewingto take advantage of explosive growth in that segment. Last year, the company’s venture arm, ZX Ventures,acquired two homebrew ingredient and supply companies。它's alsomoved into the digital publishing business byinvesting in websites that cover the beer industry。
而不含酒精的饮料代表13%的AB号ev's total global sales, its U.S. portion of the business is negligible. Don’t expect the acquisition of a $40 million company to tip the scales much either — at least not right away. But it’s a start.
In addition to deep pockets backing the nascent brands' growth, Anheuser-Busch has a lot of market knowledge and other assets — operational know-how, distribution systems, wholesale networks and retailer relationships, among other things — to leverage as it fosters growth of the Hiball Energy and Alta Palla brands.
