NEW YORK -- A Goldman Sachs analyst predicts that the top beer brewers could face major headwinds for the foreseeable future, even as overall trends in the industry improve, said the Associated Press.
In a research note, Judy E. Hong said that the outlook for the beer industry has gotten "a bit sunnier as thirsty consumers reach for craft beers and imports and as the switch from beer to wine and spirits moderates.
But the healthier outlook may not mean brewers will see dramatic improvements to the bottom line. "We remain skeptical [image-nocss] that the large traditional brewers can successfully offset slower growth in their core brands by entering [the] craft and imported beer segment," Hong said.
She conceded, however, that the outlook for the sector overall is picking up. "The pace of share declines for beer actually moderated in 2006 versus the prior year, and distributor channel checks support our expectation that improved trends are sustainable," she said.
Hong also said brewers should be able to raise prices to keep pace with inflation, and distributors seem optimistic about the industry's prospects.
But, she said, the big three domestic brewersAnheuser-Busch, Molson Coors Brewing Co. and SABMiller PLCmay still struggle in the next few years since craft beers have had the most success recently. The exception, she added, is Blue Moon, Molson Coors' popular wheat beer.
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