AB InBev’s Anheuser-Busch is funding an expansion of its Los Angeles brewery worth $16 million.
With the investment, the company aims to boost its capacity for “beyond beer” beverages like Cutwater and Nütrl vodka seltzer, two ready-to-drink canned cocktails. The Bud Light brewer said it will also improve its production capabilities for 25-ounce cans as the consumer demand for that size has increased.
The investment also includes facility upgrades that aim to build up its water conservation efforts and decrease emissions, the company said.
“This is a pivotal moment for the Los Angeles brewery,” said Eric Gutierrez, the facility’s general manager, in the press release. “These investments equip us with the unique opportunity to stay at the forefront of brewing excellence and innovate in new ways that meet consumer needs.”
The brewery has operated since 1954, one of 14 Anheuser-Busch owns in California.
As AB InBev navigates a shifting alcohol landscape, it’s making strategic decisions about its manufacturing capabilities. In August, the company announced it will close its Anheuser-Busch plant in Medford, Massachusetts this November, which will result in the loss of nearly 200 jobs.
AB InBev’s investment in its ready-to-drink (RTD) products outside of beer shows that the company views this category as increasingly profitable. Earlier this year, the CEO, Michel Doukeris, mentioned on an earnings call that the double-digit volume growth of canned cocktails like Cutwater and Nütrl helped offset declines in beer sales. When asked by an investor during the company’s most recent earnings call if RTDs are competing with beer, Doukeris referred to Circana data which revealed that 75% of Cutwater and Nütrl’s sales were alongside spirits and wine, not beer.
