More Craft Beer Can't Help Big Brewers
The idea seems sound enough... on the surface. Consumers love craft beer, so Molson Coors Beverage (NYSE: TAP) is acquiring a small-scale craft brewer called Atwater Brewery. The move offers instant, bolt-on growth that's desperately needed at this time. In step with 2019's industrywide sales slump, Molson Coors is on pace to report slightly lower revenue for the recently completed fiscal year. Earnings are set to slide by a more alarming 15%.
Investors who believe buying exposure to the craft beer market is the best path forward, however, may ultimately be disappointed. The craft beer business, much like its bigger mainstream-beer brother a few years ago, is bumping into a serious headwind of its own.
A little over a decade ago, craft beer's time had finally come. Tiring of the predictable brands like Anheuser Busch Inbev's (NYSE: BUD) Budweiser or Molson Coors' well-established Coors label -- beers their parents enjoyed -- younger consumers demonstrated more discerning tastes for something unique. Craft beers were the answer, driving an explosion of the market beginning in 2005 that didn't slow down until 2014. And even then, craft beer's sales and its share of the United States beer market continued to inch forward through 2016.
Source Fool.com
