Anheuser-Busch (US)


Selected Anheuser-Busch advertising

Anheuser-Busch is best known as North America's King of Beers, as a result of its Budweiser and Michelob brands. But in a shock development in 2008, this American icon was acquired by Belgian-Brazilian rival InBev for a whopping $52bn. That deal created a mammoth new business, the world's largest brewer by a considerable margin. The combined company now operates under the name AB InBev, although its main US subsidiary is still known as Anheuser-Busch. It remains the clear leader in the US beer market, with more than 46% market share. Until recently, the business was also one of the largest theme park operators in the US (with Busch Gardens and Seaworld, among others), as well as as the #2 manufacturer of aluminium containers. The Seaworld business was sold in 2009, and the group has gradually reduced its exposure to materials manufacturing and recycling. 

Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 14th Aug 2014: Barred by regulators from owning Mexican beer Corona Extra in the US (though it has control of the brand elsewhere), Anheuser-Busch InBev is to test-launch its own challenger brand in selected markets next month. The new Montejo beer will go head to head with Corona - now owned in the US by Constellation Brands' Crown Exports - as well as Heineken's Dos Equis. It is being produced in the former Grupo Mondelo breweries in Mexico, which also produce Corona for InBev in the local market. Separately, Rob McCarthy is stepping down as global VP of AB InBev's top-selling Bud Light brand, to be replaced by Alexander Lambrecht.

Adbrands Weekly Update 24th July 2014: Lucas Herscovici has inherited responsibility for Anheuser-Busch InBev's substantial US sports and entertainment marketing operations, following the departure of Blase D'Sylva, who had held the role since 2011. Herscovici's title of VP, customer connections also encompasses oversight of traditional and digital media. 

Adbrands Weekly Update 16th Jan 2014: Anheuser-Busch InBev's top US marketer Paul Chibe will step down next month after three years in that role. Jorn Socquet, currently VP, marketing for Canada, moves south to take over the equivalent US role.

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Background

Free for all users | see full profile for current activities: Budweiser was the United States' first "national" beer, when it was launched in 1876. Founder Adolphus Busch was the son-in-law of successful St Louis businessman Eberhard Anheuser who had bankrolled a small local brewery in 1860. Adolphus joined the company as a salesman and proceeded to completely change the direction of the business. Budweiser was first launched in 1876, formulated to appeal to all tastes. In 1879, the brewery's name was changed from the Bavarian Brewery to the Anheuser-Busch Brewing Association, and Adolphus Busch became president the following year.

The biggest problem facing all brewers was how to distribute their freshly brewed product nationally before it spoiled. Busch created a network of railway icehouses to store beer en route, and designed the first fleet of refrigerated freight cars in the 1880s. To build on the success of Budweiser, the company launched Michelob in 1896, a darker beer, more European in taste. With a keen eye on marketing Busch began distributing high quality penknives to wholesalers, each carrying his portrait within a small peephole. In 1890 he came up with an even more successful giveaway, giving bar owners a free lithograph of the painting ''Custer's Last Fight'' as a point-of-sale item. It became one of the most successful promotions in US marketing history, with 18m distributed.

Prohibition almost destroyed the company in the 1920s, but Adolphus's son August Busch Sr quickly diversified into the production of bakerís yeast, ice cream, the soft drink Bevo and commercial refrigeration. In 1933, Prohibition ended and the company returned to beer, introducing canned Budweiser three years later. In 1955, the company introduced a third brand, low priced Busch. Also during that decade the company took two new turns, opening a fairground in Tampa Bay, Florida under the name Busch Gardens, and acquiring the St Louis Cardinals baseball team.

Despite diversification, beer remained the core of the business. By the early 1960s, Anheuser-Busch was producing more than 10m barrels of beer a year, and had overtaken Schlitz to become America's #1. The group finally began to move beyond North America in the 1980s, launching Budweiser in the UK, initially under license to Scottish & Newcastle, and in Japan in 1984. It was also time for further diversification. The company had added a second Busch Gardens in Williamsburg in 1975, but this remained a minuscule part of the business. In 1989 the group made a concerted move into entertainment with the purchase of the four Seaworld parks, making it one of the country's biggest theme park operators. (One of the parks, in Cleveland, was subsequently sold).

The group also flirted with foods, acquiring Campbell Taggart baked foods in 1982, and launching a range of snackfoods under the company's Eagle logo. These businesses were spun off or sold in 1995, as was the baseball team. In 1993, the group took a strategic stake in Mexico's Grupo Modelo, assisting indirectly as that company's Corona beer overtook Heineken to become the leading imported brew in the US. In 1995, Anheuser took back control of Budweiser in the UK, buying its London brewery from Scottish & Newcastle. It also took its first steps into China with the formation of what was initially a joint venture brewery in Wuhan. It gradually increased its shareholding to 97% by 2005. In 2002, a strategic alliance was formed with Tsingtao, and in 2004 the group launched a battle for control of the country's 4th largest brewer, Harbin, when it acquired a 29% stake in the business for around $138m. This put it into competition with rival SABMiller, which already owned a 30% holding in the business. Miller launched a bid for the remaining shares in Harbin later that year, but management gave its support instead to Anheuser, which acquired all the outstanding shares, including those of SABMiller for around $715m.

August Busch IV was appointed as group CEO in 2006, having previously served as president of Anheuser-Busch USA. At the same time, his father August Busch III retired as chairman, and was replaced by Patrick Stokes, the former group CEO. Following completion of the takeover by InBev, Busch IV remained a director of the enlarged company until 2011, one of two from the former Anheuser-Busch. Two of the group's longest-serving and most influential marketing executives also left the group following the takeover. Tony Ponturo had been VP, global media & sports marketing, responsible for building Budweiser's close relationship with various US sports, but especially football. He left at the end of 2008, and was followed in early 2009 by Bob Lachky, EVP, global industry development and chief creative officer. It was Lachky who oversaw the creation of such memorable campaigns as Wassup, the Budweiser frogs and Real Men of Genius. see full profile for current activities


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