InBev beers, particularly Budweiser and Bud Light, are not selling in Grocery stores. Walk down the beer isle at many grocery stores across the nation and you will see 24 packs of InBev beverages stacked up in front of the Beer Cooler. So, what's going on here? I'll try to explain:
- The fallout from the Bud Light Tranny-Beer ad is bad. Not just a little bad, but earth-shatteringly bad. Bankruptcy bad. That's how bad it is. People are leaving boxes of tampons on top of Budweiser Beers.
- Now, this space in front of the Beer Cooler is expensive grocery store space. So, why are stores doing this? Why not return the beer or leave it in the warehouse?
- Budweiser Beer distributors need to move product. However, they cannot discount their product - not just yet. They need to push product out to the grocery store beer isles all across the nation. That's step 1.
- Distributors are paying for grocery stores to stack InBev product in the Beer Isle. These "promotional payments" do not show up in the gross sales numbers for the Distributors or for InBev. InBev is funding these promotionals through the distributors. Right now it is being funded by huge credits for free or discounted products in the future.
- The grocery store shelf life for beer is about 2 months. After that, they can still sell it, but they will need to discount it to move it.
- The Tranny-Budweiser storm isn't going to blow over - InBev realizes this now. But, they still need to move beer before it goes out-of-date. They need this stuff in the isles of Grocery Stores. They are PAYING for placement right now.
- The Grocery Stores will discount this beer, incrementally, until they get rid of it. This will be paid for by InBev.
- Whatever doesn't sell by the sale date will be repurchased by InBev through its distributors, if.....IF the companies are still profitable.
Much of the way this is being paid for by InBev is to make it look like its sales numbers haven't really been impacted in the upcoming quarterly reports. They will tag these huge payments in a line-item under "promotions". The most important thing for InBev to do right now is try to make it look like none of this has impacted its sales.
Just remember -
you heard it here first!