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Commodities

Anheuser-Busch to invest $1 billion in production facilities in hard seltzer push

Cans of AB InBev's Bud Light hard seltzer are displayed in a fridge in Jewel-Osco supermarket in Chicago, Illinois, U.S. October 21, 2020. Picture taken October 21, 2020. REUTERS/Richa Naidu

(Reuters) - Anheuser-Busch said on Wednesday it will invest over $1 billion in its U.S. manufacturing facilities over the next two years, as the brewer looks to raise production of hard seltzers that have become widely popular in recent years.

The beverage, perceived to be healthier than traditional beer by some, is the hottest alcohol trend in the United States. Sales in stores have roughly doubled each year since 2016, and further accelerated during the COVID-19-led lockdowns as people stayed away from bars and drank more at home.

Anheuser-Busch, the maker of Budweiser beer, was late to the hard seltzer game, but plans on overtaking market leaders White Claw and Boston Beer Company’s Truly over time by ramping up the production and marketing of drinks such as Bud Light Seltzer.

“We need to build more seltzer capacity so we can attend the demand from consumers, which is a growing demand,” Anheuser-Busch Chief Executive Officer Michel Doukeris told Reuters, adding that the company’s new Michelob Ultra organic seltzer also requires “huge” investment.

The United States’ largest brewer and subsidiary of Belgium-based Anheuser-Busch InBev said it would inject nearly $400 million in 12 major breweries this year, while about $100 million would go to environmental sustainability projects.

The company also plans on spending more than $100 million in new can-manufacturing lines as it ships more single-use cans and bottles and fewer kegs and returnable glass bottles that are used in bars and restaurants.

Reporting by Uday Sampath in Bengaluru; Editing by Shinjini Ganguli

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