Finally,
no Beverage Forum would be complete without a few
words from Wall Street. Financial analysts told an
audience at Beverage Forum 2005 during the session, “Money
Matters,” that the beverage industry continues
to be undergoing dramatic change.
“In
the six years that I’ve been closely looking
at the beverage industry, I’ve never seen this
kind of transformational change going on,” said
Marc Greenberg, director, Deutsche Bank. “The
level of activity around M&A is enormous, especially
in the beer and spirits space locally.”
Caroline
Levy, managing director, UBS Investment research,
said companies were at the same time being challenged
by a difficult operating environment. “Costs
are going up for the first time in many years and
there are certain companies that have been well able
to manage around it, with Pepsi being a very good
example of being able to deliver consistent growth
despite some cost pressures.”
She added, “Pepsi took a lot of criticism in the past
for diversifying away from carbonated soft drinks and I think
it’s turned out to be an excellent move.”
Looking
additionally at the specific beverage sectors, Greenberg
said when it comes to beer he likes some of the smaller
players. “In the US, one of the names that
we like here a lot is Boston Brewing, Sam Adams. … Some
of these niche players are finding a nice little
way here. And it looks as though, from a stock selection
standpoint, that that can continue.”
John
Faucher, managing director, equity research, US Beverage,
US Household Product and Personal Care, had some
advice for that sector, which is being challenged
by wine and spirits: “What the beer sector
shouldn’t do is beat each other up over price
in terms of simply taking short term market share. … Obviously
what we’re seeing now in my view is a consumer
shift in terms of looking for variety, and that helps
spirits and it helps wine. The question of relevance
comes up consistently.
