We will briefly examine the history of some of these companies to analyze the reasons for their success and failure.
Anheuser-Busch is the number one beer company not only in the U.S.A. But in the world. The company was founded more than 150 years ago by a German immigrant, Adolphus Busch. Its flagship product -- Budweiser beer was introduced 120 years ago. The company has survived such traumas in its history as the prohibition years, increase in taxes by the government, changing trends in customer tastes as well as continuing competition from domestic as well as international beer companies. After the second quarter results of 2001, the company declared record earnings and sales. This was their eleventh consecutive quarter of double-digit growth. In terms of beer volume, the company shipped 62.6 million barrels of beer in 2001, up 2.1 million barrels or 3.5% over the previous year. A summary of the company's sales and income in the last two years is given below:
Year ended June 30
Diluted Earnings per Share
Source: Anheuser-Busch Web site: Financial Results for Second Quarter, 2001
The company's domestic beer market share in 2001 was 48.1%, up 0.4% from the previous year. Apart from its core business of domestic beer sales, the company is involved in the international beer market where its beer is exported, as well as produced. Its operations also include overseas equity investments, a packaging segment and an entertainment section. All its businesses are running successfully with the international beer segment showing the strongest growth in recent years.
The company cites solid values -- family tradition, vision, courage and integrity as well as hard work, commitment and a passionate belief in quality as the reasons for the company's success. This may well be true, but the company has also combined professional management, product diversity and clever marketing techniques to maintain its No. 1 position in the beer industry.
Jack Daniel's Whiskey
The Jack Daniel's whiskey was started more than 150 years ago by Jack Daniel in the small town of Lynchburg (population: 361). The straight 90 proof (45% alcohol) Jack dniel's whiskey has been categorized as "Tennessee Whiskey" that cannot be duplicated outside of Tennessee. It uses a unique filtering process (perfected by Jack Daniel) through 12 feet high vats using finely ground sugar-maple charcoal. The slow filtering process takes 10-12 days and mellows the whiskey's taste that differentiates it from bourbon. Jack Daniel's whiskey is then aged in charred oak-barrels for a minimum of four years. The water used in making Jack Daniel's whiskey is also unique -- iron-free water that comes from a cave-fed spring. Small wonder that Jack Daniel' is still considered by many to be one of the finest whiskies available and it is one of the best selling brands in the U.S.A.
As can be expected apart from many notable successful liquor and beer companies, countless others have fallen by the wayside. For example, if we compare the list of the top ten U.S. beer makers in 1980 to the ones today, we will find that only five of these companies are still operative. The ones that have either closed down or been absorbed by others since 1980, include Jos Schlitz Brewing Co, G. Heileman Brewing Co, Olympia Brewing Co., Falstaff Brewing Co and C. Schmidt & Sons.
Alcoholic drink (or booze in the vernacular) has been in existence in most societies of the world since times immemorial. Attempts have been made at different times in history to place restrictions on the sale and consumption of alcohol. In most instances, such restrictions have been unsuccessful -- except in some Muslim countries. The beer and liquor industry has also progressed to become an important part of the economy in several countries the last few centuries. As long as serious social problems do not crop up due to excessive drinking, the future of the beer and liquor industry seems assured. In the U.S.A., however, an aging population, increased health consciousness, and the presence of several watch-dog organizations such as MADD indicate that growth in the domestic liquor and beer market is not going to be dramatic. The overseas markets, particularly China and Russia seem to offer the best growth prospects for the U.S. beer and liquor companies.
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