Ambev
Rising inflation in Argentina and increased advertising costs took a toll on the 3rd quarter profit of Ambev SA, Anheuser Busch InBev’s Latin American business. The company posted a higher-than-expected net profit of $774 million in the period, but EBITDA (earnings before interest, taxes, depreciation, and amortization) was $1.2 billion, well below forecasts. The drop in EBITDA was due, according to the company, to the adoption of hyperinflationary accounting methods in Argentina, in accordance with international standards. Inflation in Argentina is expected to end the year at 44 percent, according to a central bank poll.
Asahi
The growth of craft breweries in Australia catering to the preferences of the younger generation has pushed large corporate breweries to change their marketing message. Asahi, for example, is moving away from the image of the “grass to grain” product shot to establishing an emotional connection with beer drinkers. The company hired Sydney-based ad agency The Monkeys to create the new image, eventually delivering an ad for Asahi Super Dry that amounts to “a dramatic ode to Japanese film and culture,” taking viewers “into a dystopian world where technology and traditional collide with scenes featuring a giant squid, robot geishas, fierce warriors and loyal salary men.” Early testing found the ad resonated with younger beer drinkers, a demographic increasingly shifting to craft beers.
Brands
To commemorate the year 2019 in the Chinese zodiac calendar, Suntory Spirits Ltd. announced a limited-edition whisky to be sold in a boar-shaped 'Year of the Boar' bottle." Baked in the traditional Mino ware style of central Japan, the bottles are decorated with pine, bamboo and plum flower patterns, which are considered good luck symbols. The company said there are already orders for 17,000 bottles from department stores and liquor shops. The suggested retail price for one 600-milliliter bottle is about $84.
Companies
Beam Suntory CEO Matt Shattock will step down in April 2019 and be succeeded by Chief Operating Officer and President – North America Albert Baladi. Shattock will remain a board member as non-executive chairman and a member of the Suntory Holdings board. Shattock has been CEO for 10 years, including five years since the Beam and Suntory merger. During his tenure, annual sales more than doubled to $4.3 billion. Baladi joined Beam Suntory in late 2017 from Yum! Brands. Baladi’s successor will be named in the coming months.
Japan’s Suntory, famous for its line of whisky brands, is expanding into the vodka and gin markets with the launch of Haku Vodka and Roku Gin. Made from 100 percent Japanese white rice and distilled before being filtered through bamboo charcoal, the vodka will be available exclusively in the U.S. Roku Gin will be sold in the U.S., and in other countries. Roku is made using six traditional Japanese botanicals: sakura flower, sakura leaf, yuzu peel, sencha tea, gyokuro tea, and sansho pepper. It also contains eight traditional botanicals that are infused, distilled, and finally blended.
Japanese brewer Kirin reportedly has hired Deutsche Bank and Greenhill Australia to find a buyer for its $1.8 billion Australian dairy and juice business, Lion Dairy & Drinks, after struggling with continuing poor financial results. Among the potential bidders – which include Coca-Cola Amatil, Saputo, and Bega Cheese – is beer industry rival Asahi Group Holdings. At this point there’s no certainty that Asah will make an offer for Lion, but it has hired investment bank Rothschild to explore the possibility.
Lotte
South Korea’s Lotte Chilsung Beverage Co. has acquired a 52 percent stake in Pakistan’s Lotte Akhtar Beverage after a business demerger of Lahore-based Riaz bottlers. The $52 million deal creates a joint venture to tackle the fast-growing beverage market in Pakistan. Lotte Chilsung Beverage will manufacture and distribute Pepsi-Cola, Seven-Up, Mirinda, and Aquafina as an exclusive Pepsi bottler for the Lahore region. The second-largest shareholder in the joint venture is Akhtar Group, whose businesses range from beverages to raw materials and textiles. Pakistan’s beverage market has been growing at an average rate of 12.7 percent per year since 2015.
Suntory
Whisky maker Beam Suntory released two new spirits – a gin and a vodka – in October that represent a significant departure from its traditional product line. After four years of market research, the company introduced a Japanese-inspired gin, Roku, that features a base of juniper berries plus a variety of traditional gin botanicals as well as six Japanese botanicals. The Roku bottle is hexagonal in shape to represent each of the six flavors. The suggested price of Roku is $27.99, available in a 750 ml bottle at 43 percent ABV in the U.S. The Japanese-inspired vodka, Haku, is made from 100 percent short grain Japonica rice, which is milled down to its 90 percent to purify the flavor. The rice is fermented with koji mold, also used to make sake, and the mash is distilled through pot stills, then distilled a second time through pot and column stills, then blended and filtered through bamboo charcoal.