Market Overview

Why Did Anheuser Busch Buy A Supplier Of DIY Beer Equipment?

Why Did Anheuser Busch Buy A Supplier Of DIY Beer Equipment?
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Anheuser-Busch InBev SA NV (ADR) (NYSE: BUD), the $200-billion plus global beer giant, quietly bought a company called Northern Brewer for an undisclosed amount.

According to Bloomberg, Northern Brewer is the largest supplier of do-it-yourself beer kits, allowing customers to make beer from scratch in their home.

The process of making beer at home is quite easy and straightforward. A supplier, much like Northern Brewer, can sell DIY beer makers all the equipment needed to create beer from scratch, including grains, malt, hops, yeast, fermenters and other necessities.

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Bloomberg noted that novice beer makers can get started with a small kit that can brew one gallon of beer for $15 and up.

Logic Of The Move

So why is the maker of Budweiser interested in this market? As noted by Bloomberg, it is likely that a DIY-beer maker opts for a beer made by one of the thousands of craft brewers than a Bud Light.

The answer could be simple. Bloomberg suggested that by owning Northern Brewer, Anheuser Busch gains a new layer of research and development.

Robert Sherrill, a manager of the Brooklyn craft beer bar, told Bloomberg that by tapping into the DIY-beer market, Anheuser Busch could identify any trends in the beer market and get ahead of the curve.

With an estimated market of 1.2 million homebrewers in the U.S. that produce two million barrels of beer a year, Anheuser Busch could be looking at a trove of valuable data.

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