Thursday, January 19, 2006

Warren Buffett on Anheuser-Busch

The decision to buy the stock took about 2 seconds. I've been reading Anheuser-Busch annuals for 25 years. (I've owned 100 shares of the stock, as I have many other stocks, so I can get easy access to their annual reports.) Beer sales in the U.S. have been flat for several years. Wine and spirits have gained market share at the expense of beer. Miller has been rejuvenated to some degree, as well. So Anheuser has had to spend more lately to maintain market share, and has had to engage in promotional pricing. But the business is easy to understand, and Anheuser's business in particular is still extremely strong. The story of the U.S. beer business over the past 50 years is fascinating. Right after World War II, Storr's had over 50% of the market in Omaha. But the large, national players have steadily consolidated the business. In the 1970s, Schlitz was the biggest-selling brand nationally. The beer business won't grow significantly in the U.S., but Bud's popularity is growing worldwide. Bud will be strong. The company's earnings won't do much for some time-but that's ok with us.

Notes From The 2005 "Woodstock-of-Capitalists"


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