A series of aggressive acquisitions in a rapidly consolidating market has made AB InBev the world's biggest brewer by a considerable margin. The process began in 2000 when Belgian company Interbrew bought two of the UK's biggest beer marketers as well as a collection of German brands including Beck's. Added to the group's existing European flagship Stella Artois, and a strong portfolio of regional beers, these gave the company the right to describe itself as the "world's local brewer" by 2003, with a leading position in virtually every country in which it had a presence. This was followed in 2004 by what was in effect the takeover of Interbrew by South American brewer AmBev to form a new global giant under the name InBev. That deal gave the enlarged group a far more extensive global profile than its main rivals of the time, Anheuser-Busch and SABMiller, but it still lacked a significant presence in the US, the world's biggest beer market. That changed dramatically in 2008 when InBev succeeded in acquiring American giant Anheuser-Busch for a whopping $52bn. The resulting group, now Anheuser-Busch InBev, widened its lead further in 2013 with a deal to acquire the shares it didn't already own in Mexican partner Modelo. This steady expansion reached its crescendo in 2015 with a deal to acquire nearest rival SABMiller for an extraordinary $104bn.
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Adbrands Weekly Update 2nd Aug 2018: AB InBev announced several changes to its management team to take effect from January 2019, including the appointment of Pedro Earp as global chief marketing officer, and also head of the group's venture capital arm ZX Ventures. He will take over from Miguel Patricio, who has been named as chief of special global projects. Another key marketer, Lucas Herscovici, will become chief non-alcohol beverages officer, tasked with building the group's small but significant portfolio of soft drinks. Region Europe CEO Stuart Macfarlane will step down from the group at the same time, to be succeeded by current North Europe chief Jason Warner.
Adbrands Weekly Update 21st Jun 2018: Cannes Lions 2018. The first batch of winners were announced from Cannes Lions 2018. (See the full run-down, including all the Gold, Silver and Bronze winners at the Cannes Lions 2018 website). Halfway through the week and AB InBev had already collected two Grand Prix. In Print & Publishing, DDB's Africa Sao Paulo won Grand Prix as well as two Golds for its cheeky Tagwords campaign for Budweiser. AB InBev was also the top winner in Radio & Audio as well with a social responsibility campaign for Carling Black Label from Ogilvy South Africa. This adapted the words of the country's most popular soccer anthem to highlight the issue of domestic violence. Incidents of gender-based assault spike dramatically after football games, fuelled principally by alcohol. The agency arranged for a choir of mothers and daughters to appear on the pitch before the country's biggest soccer event singing the national football anthem. Halfway through the lyrics were altered: "His team lost and he's been drinking. What excuse will he give if this ends in a fight?"
Adbrands Social Media 11th Jun 2018: "Mas Unidos Que Nunca". This stunning spot from MullenLowe's SSP3 outpost in Colombia for AB InBev's Aguila beer is more World War 3 than World Cup 2018. But it certainly grabs your attention. The underlying concept is to offer a rallying cry to the Colombian nation to put aside their own deep political divisions and join together - to be "more united than ever", suggests the slogan - in support of the national team's upcoming bid for glory in Russia. Incidentally, before all you England fans out there take offence, that red cross on white isn't intended to represent our own St George's flag; it's just one of Colombia's two opposing political parties, whose respective red and blue colours are drowned in a sea of yellow. It's Aguila beer raining from the heavens!
Adbrands Weekly Update 8th Mar 2018: Challenges remain in the global beer market, and especially North America. AB InBev reported record volumes of 613m hectolitres for 2017, but on a comparable organic basis (including equivalent prior year volumes from acquired SABMiller), the figure was up by only 0.2%. In two of the group's most important markets - North America and Latin America North - volumes were down year-on-year. Indeed, in the US, they fell by a worrying 3.5%. However international growth was strong, especially for InBev's three lead brands. International Budweiser revenues were up almost 11% (no figure was disclosed for the struggling US market), Stella Artois global revenues up almost 13%, and Corona by 20% overall and by an extraordinary 40% outside Mexico. Group revenues of $56.4bn jumped by 24% on a reported basis, but a more modest 5% on a comparable basis. The main factor was higher pricing. Net attributable profit soared sixfold to just under $8.0bn, but net debt remains sky high at a staggering $104bn.
Adbrands Weekly Update 2nd Nov 2017: Brewing giant AB InBev's numbers were mostly positive, with revenues and profits both up on growth in emerging markets, but the group is still struggling with declines in the US, where underlying sales fell by more than 5%, and volumes by more than 6%. Local leader Bud Light continues to lose market share against Corona Extra and craft brews, even if it is in no danger of surrendering its position as the country's top-selling beer anytime soon. Budweiser too was down.
Adbrands Weekly Update 5th Oct 2017: AB InBev completed its mammoth global media review, sharing out responsibilities among four of the top marketing groups. The biggest winner is Dentsu Aegis Network's Vizeum, which retains duties in Europe while also adding the cornerstone North America account. Biggest loser is Mediacom, which surrenders the US and several other markets, but gains or retains most of Latin America. Starcom is another winner, keeping or gaining key Asia markets including China, South Korea and Japan, and some Latin American territories. Omnicom's PHD joins the roster with Australia (from Mediacom), India and Vietnam. Departing the roster is Interpublic's UM which had managed Canada and some Latin American markets.
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Free for all users | see full profile for current activities: Interbrew has the privilege of being one of the world's oldest brewers, tracing its roots back to the 14th century, when the Den Hoorn brewery in Leuven, Belgium, first began making beer. In 1717 that business changed its name after it was acquired by Sebastiaan Artois. His Artois brewery became one of continental Europe's most prosperous beermakers over the following two centuries. Its most successful brew, Stella Artois, was first brewed in 1926. After World War II, Artois began to expand its business beyond Belgium. It acquired control of Leffe in 1954, followed by Holland's Dommelsch Brewery in 1968, and Brasserie du Nord in France two years later. Stella took its first steps outside the French and Belgian market in 1976, when the company agreed its first licensing deal, with Whitbread in the UK.
Despite the success of Stella and other beers, Artois was denied the position of the most popular beer in its own country. Jupiler was introduced by Piedboeuf, a competitive family brewery which had been operating since the middle of the 19th century. Increasingly both companies were in danger of being squeezed out of the market by the relentless expansion of Carlsberg and Heineken. In 1987, Artois and Piedboeuf joined forces to create Interbrew. At the same time, the families who still controlled the respective businesses, handed over management to newly recruited executives (although they continue to have seats on the board).
The enlarged group continued to snap up smaller breweries and brands. Hoegaarden joined the portfolio in 1989, Belle-Vue in 1991. In 1995, the group made another major purchase, acquiring Canada's Labatt Brewing Company for around $2.9bn. This gave Interbrew an important foothold in the Americas and placed the company in the #3 position worldwide behind Anheuser-Busch and Heineken. The group was also adding a number of companies in eastern Europe to its collection. Interbrew acquired breweries in Hungary in 1991, Croatia and Romania in 1994, Bulgaria in 1995 and the Ukraine in 1996. As a result of its purchase of Labatt's, Interbrew also ended up with ownership of various Canadian sports teams and their stadiums, including baseball team the Toronto Blue Jays. It had been seeking a buyer for these assets for several years, and finally completed a deal to sell the Blue Jays to Rogers Communications for $112m in late 2000.
Interbrew acquired the UK's Whitbread brewery in 2000 for £400m. Whitbread's portfolio of owned brands was comparatively small, with only one major non-licensed brand, Boddingtons. But it was already the UK licensee for Stella Artois, as well as Heineken, which accounted for around a third of its business. However, competition between Heineken and Interbrew stopped the Belgian company from taking over the Whitbread's UK Heineken contract. Instead Whitbread was obliged to lease back from the Belgian company one of the breweries included in the sale and continued to produce Heineken under license until 2002. A month later Interbrew announced the purchase of Bass Brewers from what is now InterContinental Hotels for £2.3bn. This portfolio was dominated by the Carling lager brand, selling around 3.3 million barrels a year. The group also had a 55% stake in the Czech Republic's #3 brewery, Prague Breweries, makers of Staropramen beer and owned French vineyard Chateau Lascombes. Despite the fact that it was still awaiting approval of the takeover of Whitbread and Bass, the group impetuously announced it would give up private status in December that year, launching an IPO on the Belgian Stock Exchange. Also that month, Sun Interbrew, a joint venture in Russia with Sun of India, acquired Ukraine's #2 brewery Rogan.
However in January 2001, in a shock upset of Interbrew's UK ambitions, the company's acquisition of Bass Brewers was vetoed by government regulators. Interbrew had expected to be obliged to sell off some smaller brands, but had not anticipated a full block. The Competition Commission said the takeover would create an effective brewing and distribution duopoly in the UK between Interbrew and Scottish & Newcastle, and instructed Interbrew to sell Bass Brewers to a single approved bidder. The Belgian company responded by appealing against the decision, beginning a long campaign to break the business up instead of sell it whole. Finally, after several months of deliberation by regulators, Interbrew was granted improved terms for its Bass takeover. It was told to sell off the Carling, Caffrey's and Worthington brands, but allowed to keep Tennent's and Bass Ale, as well as breweries in Scotland and Northern Ireland. Carling was finally acquired by US brewer Adolph Coors for $1.7bn. Meanwhile, still chasing major acquisitions, Interbrew paid over the odds to snap up Beck's Brauerai, Germany's biggest beer exporter. The deal price was $1.56bn, making it one of the most expensive takeovers ever in the international brewing industry.
At the end of the year, a document was leaked to the British press showing plans for an imminent bid by Interbrew for South African Breweries. The brewer claimed that the document was largely forged, although parts of it were genuine, and stated that no such plans were being considered. (Instead SAB subsequently joined the frenzy of consolidation across the industry, acquiring Miller of the US). In 2002 Interbrew added a third Chinese brewer to its portfolio, paying $42m for a 70% stake in regional brewery KK Group, and acquiring a 24% stake in existing strategic partner Zhujiang. However the key deal was the merger with AmBev, announced in early 2004. The only potential complication involved in this deal was resolving the relationship between Labatt and Mexico's FEMSA Cerveza, a rival to AmBev. Even before Interbrew's purchase of Labatt, the Canadian company had agreed a strategic alliance with FEMSA, makers of Dos Equis, Bohemia and Sol beers. As a sideline to the AmBev deal, Interbrew agreed to sell back to FEMSA the 30% stake it owned, and also dissolved their North American distribution partnership. The company also reacquired US distribution rights to its own Bass Ale, previously distributed under license by Diageo.
In what was then its most ambitious acquisition, Interbrew announced in March 2004 a complex deal to merge with Brazil's AmBev, then the world's 5th biggest brewer, paying €3.3bn to acquire an effective 56% equity holding in AmBev. In return, AmBev absorbed Interbrew's interests in Canada and the US, represented by the Labatt Brewing Company. The deal closed in August 2004. see full profile for current activities
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