AB InBev posted EPS of $1.06 versus the consensus estimate of $0.91 and revenue of $9.33 billion against a consensus estimate of $9.36 billion. EPS was 75% higher than the same period a year ago. Molson Coors Brewing Co. (NYSE: TAP) is expected to post EPS of $0.42 on revenue of $703.83 million for the first quarter, down a penny from the same period a year ago. Boston Brewing Co. Inc. (NYSE: SAM) is expected to post EPS of $0.40, up from $0.28 a year ago, on revenue of $112.13 million. SABMiller PLC (OTC: SBMRY.PK) is expected to haul in EPS of $1.89 on revenue of $19.23 billion for the 2012 fiscal year.

AB InBev’s outlook is weighing on the share price this morning. The company front-loaded US shipments in the first quarter, and anticipates “softer shipments in the US in 2Q12 as a result.” The company also expects a boost in the minimum wage in Brazil, its second largest market, to “accelerate industry beer volumes. The company also forecasts revenue to “grow ahead of inflation.”

The less-good nes is that cost of sales is expected to increase by “mid single digits,” and AB InBev’s distribution expenses are expected to rise “by mid to high single digits.” The company plans to “continue to drive top-line performance by investing behind our brands.” To investors, that all sounds like running hard in order to remain in the same place.

AB InBev’s shares are down about -0.7% this morning at $72.12 in a 52-week range of $49.05-$74.31.

Paul Ausick

A joint venture between Molson Coors Brewing Co. (NYSE: TAP) and SABMiller (OTC: SBMRY.PK), dubbed MillerCoors LLC, is getting ready to spend big on advertising in the next few months to try to convince drinkers to come back to the light stuff. Anheuser Busch InBev (NYSE: BUD), brewers of Bud Light, hasn’t announced a new ad push, but clearly the company also has something to protect. Brewers are losing share, and shelf space, to wines and craft beers and need somehow to halt the slide.

A report at Bloomberg News notes that four of the top five selling beers in the US are light beers, which would seem to be good news. But that’s only part of the story:

Still, as consumers turn to more exciting alternatives, U.S. beer sales volumes have dropped for three straight years, including a 1.5 percent decline in 2011, according to the Beverage Information Group, a Norwalk, Connecticut-based researcher. Coors Light — the only Top 5 U.S. beer still growing — posted a 1 percent increase last year, the same as in 2010.

Advertising made Miller Light and Coors Light the phenomena they became. Now it has to pull off the same trick again, to breathe some new life into a product whose time may be past.

Paul Ausick

The acquisition should also give a boost to Altria Group Inc. (NYSE: MO), which owns a 27.1% stake in SABMiller from Altria’s sale of Miller Brewing to SAB in 2002. Molson-Coors Brewing Co. (NYSE: TAP) and Boston Beer Co. Inc. (NYSE: SAM) are both much smaller than either InBev or SABMiller, and could be additional targets for the Big Two as the beer business continues to consolidate.

SABMiller derives about 80% of its revenue from emerging markets, with China’s Snow brand the largest seller in the world and China the biggest consuming nation in the world. US consumption was about half that, but still the second-largest beer consumer.

Chinese beer drinkers downed nearly 12 billion gallons of brew last year, topping the world beer rankings. InBev’s Bud Light and Budweiser and Brazilian brew Skol followed.

But the outlook for beer in emerging markets is getting softer, and SABMiller wanted to make an acquisition in a developed market, and Foster’s is the largest brewer in Australia. Foster’s also has a significant presence in Asia, so SABMiller gets to increase its footprint on two continents.

US beer consumption is growing in the craft beer and high-priced beer segments, and imported beers have also seen increases. Import sales remain about -11% below pre-2008 levels. Overall, though, there are some big losers in beer sales.

Beer industry growth has been increasing since the very slow days of 2009, when growth was a meager 0.4%. In 2010 that figure grew to 1.6%, and is expected to reach 2.5% this year. Europe and the US contribute about 1% growth each, and the emerging nations of Asia, Africa, and the Middle East contribute up to 5% of the growth.

Brewers also got a break this year on barley prices. The cold wet spring in North America and some of Europe delayed corn planting long enough that some farmers planted barley because prices at the time were over $350/metric ton and expected to rise. But the strong crop yields have pushed barley prices down below $250/metric ton in Canada, one of the largest barley growing regions in the world.

Foster’s fought off a $9.2 billion offer from SABMiller earlier this year, and the company’s patience paid off to the tune of about $1 billion. The deal looks like a winner for both sides.

Paul Ausick