MillerCoors and Busch announced that they are both going to be increasing prices this fall according to this article.. What I find interesting is the following quote from the article.
“The price increases are part of a strategy by the companies to protect profits rather than market share, said Harry Schuhmacher, editor of the trade publication Beer Business Daily. Consumers should expect to pay more because ‘retailers will not eat the price increases.'”
So the big boys are going to be giving up some market share in order to keep their profits the same. To me that sounds like a bad idea in that their sales have remained flat over the past several years. They are unlikely to gain that market share back once it is gone.There are so many micro or craft breweries out there today just waiting to get a bigger piece of the pie.
I’m not saying that the big beer prices are going to come up to a craft or micro level, but the closer that gap is, the better it is for the small breweries. I was talking to my buddy Pete the other day and we discussed the article and some of the implications. He told me about a business professor at some hoity-toity college that was predicting the downfall of one of the big companies. I don’t know if that would be a good or bad thing but the implications would be interesting.
Maybe the big companies are like the O’Doyle family who have a strong arm and can use it, but are heading for a major downfall. I you don’t get that reference watch the video below.
Of the big companies I see Busch as the biggest innovator. They have put several new beers out to the market that attempt to emulate craft beers, but for a larger share of the market. What have Miller and Coors done recently? I could be totally wrong as I don’t look at any of those breweries much, but that’s how I see it. What do you think of the beer price increases and/or the survivability of the big boys.