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AB InBev’s Anheuser-Busch is financing a $16 million expansion of its Los Angeles brewery.
With this investment, the company aims to increase its capacity to produce “beyond beer” beverages, such as ready-to-drink canned cocktails Cutwater and Nütrl vodka seltzer. The Bud Light brewer said it will also increase production capacity for 25-ounce cans as consumer demand for the product increases.
The investment also includes facility upgrades to enhance water conservation efforts and reduce emissions, the company said.
“This is a very important moment for Los Angeles breweries.” Eric Gutierrez, general manager of the facility, said in a press release. “These investments give us a unique opportunity to stay at the forefront of brewing excellence and innovate in new ways to meet consumer needs.”
The brewery has been in operation since 1954 and is one of 14 breweries owned by Anheuser-Busch in California.
AB InBev is making strategic decisions about its manufacturing capabilities as it navigates the changing mainstream landscape. Last August, the company announced that it would close its Anheuser-Busch plant in Medford, Massachusetts, this November, which would result in the loss of nearly 200 jobs.
AB InBev’s investments in ready-to-drink (RTD) products other than beer show that the company views this category as increasingly profitable. Earlier this year, CEO Michel Doukeris noted on an earnings call that double-digit sales growth in canned cocktails like Cutwater and Nütrl helped offset declines in beer sales. When asked by investors on the company’s most recent earnings call whether RTD was competing with beer, Doukeris pointed to Circana data showing that 75% of Cutwater and Nütrl’s sales were with spirits and wine, not beer.
