Anheuser-Busch InBev plans to invest more than $1 billion in its U.S. facilities from 2011 to 2014, a figure that is less than half of what Anheuser-Busch Cos. spent before its sale to InBev in 2008.
Tuesday's billion-dollar investment announcement means the brewer will spend, on average, at least $250 million for its U.S. facilities. In 2007, Anheuser-Busch Cos. spent $554 million in capital expenditures for its U.S. beer operations.
That reduced level of investment spending is driven by flat or declining U.S. beer sales, said Stifel Nicolaus analyst Mark Swartzberg.
"The category is not expanding," Swartzberg said, adding that A-B's capital expenditures projection is in line with his expectations.
And even those dollars are being shifted away from traditional brewing operations. Swartzberg said A-B will likely invest more in areas with higher growth potential, such as the craft beer segment.
"I think one objective is to show their commitment to the U.S. beverage market," he said.
Swartzberg also noted A-B InBev is known for its efficient use of capital, which lowers the amount it needs to invest. "They're known for getting a higher return out of a dollar of capital than other brewers."
Anheuser-Busch declined to elaborate on its lower investment spending levels, but the brewer did indicate that the amount was adequate. "We've always been committed to investing to assure we have the best facilities, which maintains our quality and heightens productivity ... So nothing has changed on this front," Peter Kraemer, A-B's vice president of supply, said in a statement.
The new $1 billion investment by Belgium-based A-B InBev will support ongoing process improvement projects at its 12 breweries around the country and other facilities.
Since last year, A-B has already spent $60 million at its St. Louis brewery for multiple upgrades, including a utilities overhaul to conserve fuel, electricity and water. It said these efforts and others helped reduce water use at its breweries by 34 percent over the past three years.
The brewer wouldn't disclose how much of the $1 billion investment plan would go to the St. Louis brewery.
Todd Frankel of the Post-Dispatch contributed to this report.
