US: Beam Inc to eschew M&A for brand building - analyst
Beam is expected to focus on building brands, such as Skinnygirl, this year
Beam Inc will spend the rest of this year focusing on brand building rather than getting involved in more M&A activity, an analyst has forecast.
The Illinois-headquartered spirits firm last week reported a rise in profits and sales, driven by demand for its Bourbon brands and Skinnygirl. The group has been steadily expanding the Skinnygirl range since it acquired it in March 2011, helped by high profile promotions.
Analysts at Nomura noted that the group's planned rise in A&P spend reveals a "strong commitment to building brands and innovation". "With net debt/EBITDA post-Pinnacle (acquisition, in April) over 3x, we see a big focus now on developing existing brands rather than further M&A," it added.
Beam is expected to deliver more "balanced" revenue growth in the next few quarters, according to Nomura, as pricing increases. In Q2, 75% of Beam's sales growth was due to high volumes.
The note added: "We indicated that we saw an acceleration in spirits momentum, driven by premium brands growing faster. This appears to be particularly visible in the key US market."
In this, the third part of Euromonitor International's preview of the year ahead, senior alcoholic drinks analysts Jeremy Cunnington and Spiros Malandrakis turn their attention to the global spirits c...
While there has been huge focus in the spirits sector on emerging markets in recent years, a new report from Euromonitor International suggests prioritising development in these up-and-coming regions ...
- Focus - Edrington's FY Performance by Brand
- Where Beer is Brewed Can Leave a Bad Taste
- Pernod relies on Indian whiskey to crack Africa
- Analysis - Storm clouds lift over Diageo Towers
- NPD: The Clear Soft Drink Trend is Back
- Comment - Diageo CFO to North America? Do the Math
- Diageo CFO Mahlan to head up N America
- Former Bacardi exec takes De Kuyper CEO role
- Diageo lining up Gleneagles sale - report
- Diageo sells "non-core" Gleneagles
- Global liqueurs insights - market forecasts, product innovation and consumer trends research
- The IWSR Company Profile 2014 – Remy Cointreau
- Diageo plc (DGE) - Financial and Strategic SWOT Analysis Review
- Edrington Group in Spirits (World)
- Global Tequila insights - market forecasts, product innovation and consumer trends research