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Dive Briefing:
- Anheuser-Busch, a subsidiary of alcohol giant AB InBev, plans to close its distribution facility in Medford, Massachusetts, according to a Worker Adjustment and Retraining Notification (WARN) notice filed last week. The decision will result in the loss of 193 jobs.
- The Bud Light brewery’s plant closure will take place during the first two weeks of November. The change is permanent and operations will be transferred to local wholesaler Quality Beverage, the company said in a statement to Food Dive.
- The company reported a 1.3 percent decline in beer sales in the most recent quarter, according to an earnings report released earlier this month.
Dive Insight:
Big names in the beer category are making strategic moves to cut costs amid sluggish consumer demand.
Simon Westenberg, AB InBev’s chief commercial officer for the Americas, said in a statement that the company’s decision to close the facility was made “after evaluating the operational foundations to ensure the overall system is positioned for long-term success.” He said shifting operations to other distributors would help continue to drive growth.
The move comes after a period of declining beer sales since early 2023, partly fueled by a mass boycott of Bud Light. Last year, the company laid off less than 2% of its workforce, and the company ceded market share in traditional beers to rivals like Molson Coors and Constellation Brands.
Despite these headwinds, AB InBev's recent earnings call saw CEO Michael Duqueris express optimism to investors about the industry's long-term outlook.
“We see good premiumization in the industry. We see beer growing steadily in dollars, and now in the last quarter, beer is gaining value share,” Doukeris said. “And when you combine that with RTD, we see very good momentum in terms of brewers capturing volume and dollars in the industry.”
AB InBev has also made strategic decisions to invest in growth outside of its main beer brands. Last year, the company spent $13 million on a project at Cartersville Brewery in the Atlanta area, which produces Kona Big Wave craft beer along with hard seltzer and canned cocktail brands. It also announced a $22.5 million investment in upgrading its Houston brewery in August 2023.
Across the food and beverage industry, companies are choosing to restructure their production strategies as they deal with a volatile economy amid years of inflation. Last month, cereal giant WK Kellogg Co and beverage giant Keurig Dr Pepper both announced the closure of production facilities, each affecting hundreds of jobs.
