Print

Mail

wiki links

InBev brewing up plans to bring Bud to the world

InBev may be based in Belgium and have strong ties to Brazil, but the brewing giant has grand plans to sell Budweiser — what it calls America in a bottle — to the world.

But InBev and its ambitious Brazilian chief executive Carlos Brito face a huge challenge to convince the world that it wants the iconic US brew as they try to make their US$52 billion takeover of Budweiser-owner Anheuser-Busch pay off.

“Budweiser brings the great America in a bottle. That’s what consumers love,” Brito told journalists last week as he announced InBev’s planned takeover of Anheuser-Busch.

During the month-long takeover battle for Anheuser-Busch, Brito sought to win over the skeptical board at his US rival by promising to make Budweiser the merged company’s flagship international premium brew.

Using InBev’s extensive international distribution network, he said he envisaged Budweiser following in the steps of other well-known American consumer products that ventured beyond US shores.

“When I look at other American companies that have done this before — like McDonald’s, like Pepsi, like Coke, like Frito-Lays, so many companies that have expanded abroad — I’m very excited,” Brito said.

However, consumer analyst Mike Hughes at market research group Datamonitor said that bringing an iconic US product to the global market might not be as easy in the age of globalization with countless products vying for consumers’ attention.

“The thing to remember about a lot of brands like Coca-Cola is that they were introduced decades ago when there wasn’t the choice we have today,” Hughes said. “It’s a lot more difficult to replicate than 30 or 40 years ago.”

InBev, which has some 200 brands in its portfolio, has already tried to catapult brands such as Stella Artois, Beck’s and Brahma into the international premium beer market.

Although InBev has had limited success, analyst Kris Kippers at Belgian brokerage Petercam sees better prospects for transforming Budweiser into an international brand of choice for beer lovers.

He said Budweiser was already such a well-known brand globally that simply by making it available in stores and pubs through InBev’s distribution network would “make a big difference.”

“The question now is cannibalization between the brands that are pointed out as global brands will be somewhat different,” he said. “I don’t know if Beck’s and Budweiser can live next to each other on the same shelf. It depends on how consumers react.”

While also optimistic that InBev will be able to transform Budweiser into an international premium beer, JPMorgan analyst Mike Gibbs said it would take a lot of money to do it.

“Even with high awareness and distribution clout, building a real presence for Bud in many markets is going to require substantial marketing investment,” he said in a research note.
This story has been viewed 660 times.