A-B to Invest Up To $1.7 Billion by 2018

Anheuser-Busch is moving forward with a major investment campaign for its U.S. breweries that will eventually cost $1.7 billion according to the summary statement from the brewer in its media release. It remains unclear if budget will be spent to expand operations in recently acquired craft brands of Elysian, 10 Barrel and Blue Point brands, but the overall budget for brewery operations is $850 million. The announcement, which includes a mention of job creation, follows shortly after a renewed effort in Congress to reduce the excise tax for all U.S. brewers to help promote expansion and new jobs. A-B is also building a new brewery in Youcatan, Mexico. Here is the release:

ST. LOUIS, June 23, 2015 /PRNewswire/ -- Anheuser-Busch today announced it will invest more than $1.5 billion in its U.S. brewing, agriculture, packaging and distributing operations by 2018. These investments will support growth of its brands and reinforce the beer company's commitment to the U.S. communities where it operates through local spending and jobs. The leading beer company plans to spend an estimated $850 million on brewery and packaging expansion projects, $220 million on product innovation initiatives and $720 million in sustaining and increasing efficiency of its existing footprint. 

"Our beers lead their categories because we hold quality at the center of every beer we produce and invest in our brands through talented people, new innovation and advanced operations," said Joao Castro Neves, president of Anheuser-Busch InBev North America.  "We have demonstrated commercial success from recent investments which increases opportunity for future projects. When we make investments in our local communities it is good for all stakeholders, including employees, local legislators and community leaders – they are critical to our success."

From 2011 through 2014, Anheuser-Busch invested more than $1 billion across U.S. operations. These capital expenditures included resources to maintain state-of-the-art brewing processes, advance environmental projects, and install equipment for new products and innovations. During this time, Anheuser-Busch introduced several new products, expanding its presence in the flavored malt beverage (FMB) and cider categories and driving consumer interest in new packaging of its core brands, including:

Introduced the recloseable 16-ounce aluminum bottle in 2014 and 25-ounce can in 2013;
Expanded Bud Light Lime Lime-A-Rita family to become a 2 million barrel brand produced at three breweries; and
Rolled out new cider products including Stella Artois Cidre and Johnny Appleseed, gaining more cider market share.
Investments to modernize and add equipment at brewery and can plant facilities ensured the beer company could deliver these innovations. In addition, the U.S. facilities focused on continuous improvement and increasing efficiency.

"Upholding our high-quality brewing standards requires significant financial commitment for equipment, technology and skilled people," said Pete Kraemer, vice president of Supply for Anheuser-Busch. "In addition to investing in operations, we contribute to our local communities through environmental sustainability initiatives that drive our water conservation, energy savings, and recycling efforts."

In 2015, several projects are underway, including:

$150 million expansion project at the St. Louis-area Metal Container Corporation facility to increase production of the popular Bud Light aluminum bottles.
$45 million to build new can line and additional warehouse at Fort Collins brewery to produce the slim, 12-ounce can style.
$20 million in capital investments at the Los Angeles brewery to add new water efficiency and treatment capabilities.
$18 million in investments at the Columbus brewery, including a sustainability project that will reduce energy needs by recovering heat for use in fueling the operation.
$12 million invested in the company's historic St. Louis brewery for various improvements, including projects to conserve resources and support new innovations.
$11 million to develop and integrate new products, including Bud Light MIXXTAILs and Oculto across multiple breweries.
Future spending plans are based on no new or increased taxes or unforeseen events that would negatively impact Anheuser-Busch's business. The expenditures are consistent with Anheuser-Busch InBev's 2015 net capital expenditures guidance.