Beer: Drunks All Over the WorldBADM 381 – September 16, 2008

Jessica Schmitt

Eva Lindsay

Kyle Giglio

John Miller

Top Beer Companies in the World

InBev (once buyout is completed) Bass, Stella Artois, Beck’s, Budweiser….

SABMiller Icehouse, Leinenkugel, Miller, Peroni….

Heineken International Heineken, Amstel, Newcastle

Most Popular Beers

Stella Artois is InBev’s most profitable beer

93% of Anheuser-Busch’s net sales are in USA

Most Popular Beers

IRI Top 30 Beer Brand Performers in 2007: Total US Supermarkets

Blue Moon Belgian White Ale

Samuel Adams Seasonal

Heineken Premium Light Lager

Stella Artois Lager

Newcastle Brown Ale

Coors Light

Bud Light

Yuengling Traditional Lager

Miller Lite

Samuel Adams Boston Lager

Keystone Light

Corona Light

Tecate

Guinness Draught

Samuel Adams Variety Pack

IRI Top 15 New Beer Brands in 2007: Total US Supermarkets Miller Chill Bacardi Silver Mojito Landshark Lager Bud Light Chelada Smirnoff Ice Pomegranate

Fusion Mike's Hard Light Cranberry

Lemonade Michelob Ultra Lime

CactusCM Parrot Bay Pineapple

Colada Budweiser Chelada Michelob Ultra Tuscan

Orange Grapefruit Mike's Cocktail

InBev Merger

EVENT July 13, 2008 – InBev agreed to buy Anheuser-Busch for a

total value of $52 million and create a new company Anheuser-Busch InBev.

The deal is still pending approval by shareholders and regulatory agencies.

The Companies

InBev Founded in 2004 in merger between Interbrew and

Ambev Operations in 30 countries and sales in 130 countries Important Brands: Stella Artois, Bass, Brahma, Leffe,

Hoegaarden, Beck’s

Anhauser-Busch Largest brewing company in the U.S. Important Brands: Budweiser, Busch, Michelob, Bud

Light, Natural Light

Implications of Acquisition

The Anhauser-Busch and InBev merger would create the a combined world sales that would surpass current number one brewer SABMiller

Other mergers may be forced in order to compete

Top 5 International Brewers could increase control of world market from two-thirds to nearly 85%

Beer Drinkers Fight Back!

A group of 10 beer drinkers filed a federal lawsuit against the InBev’s purchase of Anhauser-Busch claiming that it woud violate U.S. antitrust law if complete as planned Concern over monopoly creates would create a reduction

in competition Both Anhauser-Busch and InBev claim the lawsuit has no

merit

Class Survey

When you throw a party, what kind of beer do you buy?

If money or distance wasn’t an issue, what beer would you buy?

Beer & National Pride

-Beer used to foster national pride

-Small or poorer countries are proud to have their own beer

-Creates jobs

-Beer companies involved in

sports, art, music, leisure,

and the community

The Caribbean

Every country has its own beer

Each country’s beer has become a national icon Controls up to 99% of the local beer-drinking

markets

Some partly or fully foreign owned, but locally managed and people still prefer the local brand

Dominican Republic:El Presidente

“Whether it is the taste of the beer, or the simple fact that the beer represents a national icon for the demonstration of national pride, Presidente beer is undoubtedly an important part of the Dominican cultural make-up.” -DR1

Dominican Republic: El Presidente

Sponsors cultural events:

The Music Competition at the National Theater, Carnaval celebrations, The Cassandra Awards (Arts, Entertainment, and Journalim award), The Latin Music Festival, The Winter Baseball League, and the Athlete of the Year Award

El Presidente

“Elaborada en la Republica Dominicana”

Most important sponsorship: Sports Events

People connect with sports

brings national pride

beer sponsors events

Budweiser and the Superbowl

Budweiser Superbowl Ad

“Ecuatorianamente Refrescante” “Refreshingly Ecuadorian”

•Pilsener Cup for soccer

•Brags to be “Orgullosamente Ecuatoriano” “Proudly Ecuadorian”-

Marketing Differences

American beer companies Rarely coordinate advertising efforts In USA, sponsor NASCAR In England, sponsor English Premier League Product Placement in country-specific films

Budweiser - Mexico

Marketing Differences

Foreign Beer Companies Guinness advertising highly coordinated Similar ads used across borders Americans want foreign feel

More highly valued

Marketing Differences

Recipe Changes Guinness Alcohol By Volume (ABV)

U.S, Australia, Japan 6% Canada 5% Ireland, UK, Europe 4.3%

Corona w/ Lime Lime used as disinfectant and method of keeping flies

out In America (more health standards) make lime a

necessary accessory

Beer Industry $$$ in Ads

Superbowl known for it’s pricey advertisements

30 second spot cost: $2.7 million in 2008 Expects $3 million in 2009

(Reuters)

11% of Advertisements were from the beer industry alone

(AOL Sports)

http://www.youtube.com/watch?v=HAwi2J1J5GE

Beer Industry $$$ in Ads

“Anheuser Busch spent $782,700,000 on advertising (advertising and promotional costs) (Anheuser-Busch 10k)

Molson Coors spent $754,738,000 on advertising (media, tactical, promotional) in 2007 (Molson-Coors 10K)

Importing in the US

 

• Main ideas are to come away with are:

• Importing appears to be on the decline ( - 3.1%) through June

• Overall imports in 2007 were 29,691,000 barrels

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TOTAL

 2008 1.841 2.082 2.434 2.708  2.8 2.756 11-Sep 10/10  13-Nov 11-Dec 13-Jan 11-Feb

 2007 2.355 2.137 2.334 2.462 2.963 2.831 2.869 2.706 2.13 2.316 2.304 2.284 29.691

2006 1.865 1.953 2.463 2.563 2.711 2.524 2.592 2.634 2.398 2.708 2.459 2.449 29.319

% Change 07-08 -21.80%  -2.6  4.3%  10.0%  -5.5%  -2.7%            

 % Change 06-07  26.30%   9.4%   -5.2%  -2.9% -9.30% 12.1%   10.70%   2.7%

 -11.1%

 -14.5%   -6.3%  -6.7 

(Beer Institute)

Exporting from the USJan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TOTAL

2008 197.6 219.9 191.5 213.7 269.5 268.8 9/11  10/10  11/13  12/11  1/13  2/11   

2007 182.6 172.8 208.2 239.4 238.7 222.1 265.3 212.4 210.8  252.7 205.1 234.8 2,392.20

2006 216.4 166.6 226.1 177.4 218.9 241.5 209.9 190.4 154.9  180.1 179.1 189.5  1,981.20

% Change 07-08 8.20%  27.3%  -8.0%

 -10.7%  12.9%  21.2%              

 % Change 06-07

 -15.6% 3.5%  -7.9%   35.0%  9.1% -8.2%   26.4%  11.6%  36.1% 40.3%   14.5%  23.9%  

 

Main ideas are to come away with are:•Exporting appears to be on the rise (+21.2) through June •Overall exporting in 2007 were 2,392,200,000 barrels

WE ACTUALLY EXPORT 80X MORE THAN WE IMPORT BEER

(Beer Institute)

Beer Market Shares

Increased exports should lead to an increase in global market share

Asia’s growth from 26% to 30% in 5 years has helped them catch up to a seemingly unmatchable Europe

Possibly to Europe’s higher consumption level?

(Beverage Marketing)

References

http://articles.latimes.com/1998/jun/28/business/fi-64375

http://dr1.com/articles/presidente_1.shtml

www.wikipedia.org

www.foxnews.com

www.bloomberg.com

References Cont’d. http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSN0644484220080506?rpc=64 

http://www.youtube.com/watch?v=HAwi2J1J5GE 

http://www.beveragemarketing.com/globalbeerbw.htm

http://content.mahalo.com/images/5/52/Bud_Light_Breathe_Fire_Super_Bowl_Ad.png

http://sports.aol.com/nfl/superbowlads

http://www.beerinstitute.org/statistics.asp?bid=198 

http://phx.corporate-ir.net/phoenix.zhtml?c=101929&p=irol-financialreporting

http://www.anheuser-busch.com/FinancialReports.html 

http:/www.thebeermall.com/images/home_page_pic.jpg

http://www.just-drinks.com/store/product.aspx?id=61761