Heineken Financial Statement Analysis

Major competitors in light beer are Anheuser Busch, Miller Brewing, and Adolf Coors, representing 74% of beer shipments in Mountain Man’s region.

The soft drink industry is one of the most highly profitable industries in the USA. Also, the competitive market is a very large market. Americans consumed about 53 gallons of soft drinks per person a year in 2000 by $ 60.3 billion!! Comparing with the market in 1990, since it was 47 gallons. In recent years, the market growth has slowed.

By 1980 Anheuser-Busch, Miller Brewing, Pabst, and Stroh’s were the main four that made up nearly 80% of the market. By the mid-nineties it was down to three major players: Coors, Miller, and Anheuser-Busch. The beer industry includes packaging manufacturers, shipping companies, agriculture, and other businesses who depend on brewing. The American brewing industry employs approximately 1.66 million Americans today. There are generally three tiers of beer suppliers in the United States: domestic giants like Anheuser-Busch and Miller, importers, and craft brewers.

Boston Beer Company (BBC) has enjoyed much success with their craft beers with Samuel Adams as their main focus. Being the leader of this segment, overtopping five of their competitors combined (Exhibit 1), the company now must decide how to take advantage of the light beer market. Boston Lightship, their current light beer, had been a small contributor in BBC’s product line. Currently, it is facing dwindling sales with product volumes down from 12 000 cases per month to 3000 cases per month.

Capital Structure. Boston Beer Company is financed almost entirely by shareholder’s equity. The company only had one note payable which was set in June 2012. The note payable is a grant to improve road traffic of the company’s Pennsylvania Brewery. As of December 27, 2014, the total debt, including notes payable, current portion of long-term debt, and long-term debt, was $583,000. According to the company’s balance sheet, as of the end of fiscal year 2014, there were 13,069,730 shares of outstanding common stock, and the price of the stock was $295.74. Thus, the market value of shareholder’s equity was $3,865,241,950 (Boston Beer Co. Inc. and YCharts). The capital structure of Boston Beer is 0.015% debt and 99.985% equity.

- The recent market position of Samuel Adams beer is very strong, as well as growth prospects.

Budweiser and Bud Light are the No.1 and No. 2 best-selling beers in the world. Miller, their closest rival maintains 22.1% of the market share. The following chart illustrates market share in 1999 for the nation’s leading breweries.

Beer has a long history. In 2000 B.C.E., Sumerians had prepared eight different beer types, ranging from “strong,” “red brown,” and “good dark” (Mauk, 2013). Breweries have created their own recipes, brewed their own beers—some with alcohol, some without. Over the past few years, craft beer gained steady market share away from the national and international breweries (Murray & O 'Neill, 2012). Separating one beer from the next is the product itself, and what the product has to offer. Competition is ferocious due to more informed, sophisticated consumers, as well as globalization and the spread of technology (Murray & O 'Neill, 2012).

The category is dominated by 5 major brands (94% of dollar sales), with Red Bull far above the pack with a 43% dollar sales market share. The other 4 are in close competitions with

Anheuser-Busch is best known for the world’s two top-selling beers, Bud Light and our flagship brand Budweiser. Operating 12 breweries within and 15 breweries outside of the United States, Anheuser-Busch brews more than 40 varieties of beer and alcohol beverages.

As the world’s largest brewer, AB Inbev has the ability to compete in new and foreign markets as a strong threat. Due to their enormous capital and expansion-based strategy, they can enter any market as a challenger and shutdown competition to become the leading brewer in this market. As an aggregated note we can also see this in domestic or already dominated markets because due to economics of scale they can achieve differentiated products at a low cost.

2》 Other beer brands have occupied large market capacity, market share of Carlsberg and Budweiser far exceeds that of Tsingtao beer

Although sales of premium brands have fallen in a steady response to the growing popularity of the craft beer. The industry revenue has been stable over the past 5 years. As a result, from 2011 to 2016 the industry revenue is expected an increase and growth annually at 6.7 percent over the five years,with a total of $39.5 billion . (IBISWorld iExpert) In the long-term, these numbers are expected that grow 0.9 percent annually within the next five years. The potential growth will be seen in the traditional and premium beer sector. As a response, the giant companies in the industry Anheuser-Busch InBev and MillerCoors look forward into the merges and acquisitions as a strategy to maintain market dominance. The strategy is based on the

Despite the dominance of Carlsberg, in its annual report BGD could lay claim to being the largest Scandinavian beer exporter. This was because Carlsberg placed emphasis on licensing agreements or local production for its foreign markets, while BGD’s strategy was export led: ‘Eighty-three out of every hundred bottles of beer that we produce are sold in foreign markets.’ By 1995 the percentage of export sales by region of the world was as follows: western Europe 63 per cent, the Americas 10 per cent, eastern Europe 22 per cent, others 5 per cent. The development of BGD’s operations in some of these markets is now reviewed.

|The global beer industry is dominated by large corporations who have merged with rivals to increase their global and domestic market share. |