The world’s biggest brewer, InBev, is looking to sell its U.S. domestic beer brand Rolling Rock after struggling to revive the iconic brand over the last decade, sources close to the matter said on Wednesday.
Belgium-based InBev, brewer of Stella Artois and Beck’s, is keen to resolve its poor U.S. performance, and new Brazilian Chief Executive Carlos Brito wants to focus InBev on being a strong player in the U.S. import beer sector, they added.
InBev says it has decided to concentrate its U.S. sales and marketing resources on imported brands such as Bass, Brahma and Labatt Blue, as well as Stella Artois and Beck’s, and is examining all options for the future of Rolling Rock.
“The company has started examining opportunities both inside and outside InBev to determine how to optimize the full potential of Rolling Rock and the Latrobe Brewing Company ... No final decision has been made at this time,” an InBev spokeswoman told Reuters.
One option is to keep the Rolling Rock brand and sell off the brewing facility at Latrobe in Pennsylvania -- InBev’s only brewery in the United States -- but there is a lack of big buyers for the brewery, the sources added.
“Rolling Rock is on the block, but it is difficult to see any obvious buyers, apart from some of the smaller U.S. brewers,” one source close to the situation said.
The sources said InBev U.S. had seen a poor performance, with volumes down in recent years, and they estimate the brand and the brewery together could be worth $50-100 million, depending on any cost-saving synergies available to a purchaser.
Rolling Rock is unlikely to attract bids from the top three U.S. brewers Anheuser-Busch Cos Inc, SABMiller Plc or Molson Coors Brewing Co, but might attract attention from smaller players, such as Samuel Adams-brewer, the Boston Beer Co. Inc., they added.
Rolling Rock has been brewed since 1939 at Latrobe, 50 km east of Pittsburgh, and with its long-necked green bottles and painted labels has a strong following among beer drinkers in the northeast of the United States.
It is the official beer of Heinz Field, home of Super Bowl champions the Pittsburgh Steelers.
InBev acquired Rolling Rock with its purchase of Canada’s second-biggest brewer Labatt in 1995, but its U.S. beer volumes declined 2.7 percent in 2005, and fourth-quarter volumes showed an even worse fall of 3.2 percent.
The biggest U.S. brewer, Anheuser-Busch, which has half the U.S. beer market, is unlikely to be allowed to buy Rolling Rock, while SABMiller already has overcapacity, and Colorado-based Coors’ weakness in the northeastern United States was partly resolved by last year’s merger with Canadian brewer Molson to form Molson Coors.
InBev’s Brito has experience of the North American beer market as he ran the region after InBev was formed in August 2004 until he was made Chief Executive in December 2005, and in those 16 months had initiated cost-cutting programs in Canada.
InBev was formed when Belgium’s Interbrew took over Brazil’s AmBev, and Brito was AmBev’s last Chief Executive for the eight months up to August 2004’s takeover and formation of InBev.
Brito’s appointment, coming after fellow AmBev executive Felipe Dutra became InBev’s Chief Financial Officer in January 2005, is seen by analysts as evidence of greater influence over the group by the three Brazilian founders of AmBev, Jorge Paulo Lemann, Marcel Telles and Carlos Alberto Sicupira.
Brito and Dutra, the proteges of the AmBev founders, are leading a program of cost cutting, largely in Europe and North America, to revive profit growth in the mature beer markets.