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Money: Here’s Big Beer’s five step plan to ‘crush the craft beer revolution’

October 19, 2015Keith Gribbins

AB InBev logo
Let us show you how this otherworldly beer bird hunts.

Anheuser-Busch InBev has a vision — it’s to grow its stature and profits as the biggest beer company in the world — and we can learn much by the way this beer giant executes its strategy. Ten years ago, the world’s beer industry was highly fragmented, and back then Anheuser-Busch’s 8.5 percent market share was enough to make it the global beer leader. What a difference a decade makes.

In 2015, AB InBev is reported to have about 21 percent of the world’s market share in beer, and this Belgian-based, world beverage mogul has recently just offered to buy its rival brewer, SABMiller, for a deal reportedly valued at $104 billion. Currently, SABMiller has a global market share of around 10 percent, which would give AB InBev a world-conquering 30 percent of the global market if the merger goes through. Thirty percent is bad, right? Well, it’s worse here. While the company should have to sell off many of its American assets to satisfy the U.S. Justice Department, the company is still approaching 50 percent market share in the United States.

While the SABMiller deal is largely a move to grow its international markets, AB InBev definitely has its Terminator eye clearly focused on the U.S. beer industry. In a market flooded in beer brands, the company is going to need a crafty strategy to grow its coffers, and Money magazine has narrowed that strategy down into a five-point plan.

#1. Create your own quasi-craft brands.
#2. Snatch up craft brews that’ll sell out.
#3. Defend macro brews, bash craft snobs.
#4. Control distribution.
#5. Merge and overwhelm the marketplace.

Let us add three more to that list: Crush your enemies, see them driven before you and hear the lamentations of their women. Also, we might put distribution at No. 1. The most concerning and secretive news lately seems to be AB InBev buying or strong-arming wholesalers to disrupt craft beer distribution; check out this story on the subject. Then check out this complete guide to all the Big Beer activity in the last 12 months:

The guide to craft beer mergers, acquisitions, ESOPs and liquidity transactions in the past 12 months

We’ve seen the five strategies above for years, but Money wisely simplified these tactical tentacles into list form. And because the domestic beer market has become so competitive, AB InBev will need to tie this strategy into a message, and having a big bankroll for advertising and marketing might be its greatest competitive advantage — directing consumer tastes.

There are many competitive advantages to creating one gigantic beer company too. Namely, advertising. According to a Marketplace report, AB InBev and SABMiller spend a total of $500 billion annually on sports sponsorships. But now that they’re not competing with each other for partnerships with, say, the Milwaukee Brewers or the Olympics, they’ll have more negotiating power and probably will be able to save some of that cash. “They will have a lot more leverage in the marketplace,” Chris Pearlman, executive vice president with Van Wagner Sports and Entertainment, explained. “Ultimately [they will] spend less than they would have had they remained separate.”

We suggest you read the entire article by Brad Tuttle.

AB InBev logo
AB InBev purchase of SABMiller is finally approved; here are the important modifications
Budweiser Coors Sam Adams Sierra Nevada
National Beer Wholesalers Association addresses the many perils of an AB InBev/SABMiller merger with Congress
SAB Miller cbb crop Miller 64
Release the lawyers! West coast brewers sue over AB InBev/SABMiller merger
Anheuser_Busch_InBev
AB InBev to buy SABMiller for $104 billion (a deal that largely does not concern the U.S. market)

Reader Interactions

Comments

  1. federicofiallos says

    October 22, 2015 at 2:46 pm

    Money: Big Beer’s 5 steps to Crush the Craft Beer Revolution https://t.co/HHR6YClZCZ

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  2. BlackcombLiquor says

    October 20, 2015 at 10:47 pm

    RT @bolstr: Money: Big Beer’s 5 steps to Crush the Craft Beer Revolution https://t.co/v8dZwcIRkS via @CraftBrewingBiz

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  3. E_Maroulis says

    October 20, 2015 at 5:56 pm

    RT @belgianbeerday: Money: Big Beer’s 5 steps to Crush the Craft Beer Revolution https://t.co/xIf5odggda https://t.co/jDdUhjX6xf

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  4. Rick van den Brink says

    October 20, 2015 at 5:52 pm

    Rick van den Brink liked this on Facebook.

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  5. bolstr says

    October 20, 2015 at 4:00 pm

    Money: Big Beer’s 5 steps to Crush the Craft Beer Revolution https://t.co/v8dZwcIRkS via @CraftBrewingBiz

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  6. pena_zelem says

    October 20, 2015 at 5:59 am

    RT @DeVicVantStad: Money: Big Beer’s 5 steps to Crush the Craft Beer Revolution https://t.co/LVlauUF9e3 https://t.co/tdnQYCXJTS

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  7. Han J Lin says

    October 20, 2015 at 5:51 am

    Han J Lin liked this on Facebook.

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  8. Todd Parker says

    October 20, 2015 at 5:51 am

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  9. Rudpren says

    October 20, 2015 at 1:22 am

    RT @DeVicVantStad: Money: Big Beer’s 5 steps to Crush the Craft Beer Revolution https://t.co/LVlauUF9e3 https://t.co/tdnQYCXJTS

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  10. DeVicVantStad says

    October 19, 2015 at 11:00 pm

    Money: Big Beer’s 5 steps to Crush the Craft Beer Revolution https://t.co/LVlauUF9e3 https://t.co/tdnQYCXJTS

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  11. Jim Sung says

    October 19, 2015 at 9:51 pm

    Jim Sung liked this on Facebook.

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  12. Eddie Leon says

    October 19, 2015 at 9:51 pm

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  13. LifesABeer says

    October 19, 2015 at 9:27 pm

    RT @CaptainCheers: Money: Big Beer’s 5 steps to Crush the Craft Beer Revolution https://t.co/3WliGXQeeI https://t.co/KP9cDRibm0

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  14. Cerveza_KAF says

    October 19, 2015 at 8:50 pm

    RT @belgianbeerday: Money: Big Beer’s 5 steps to Crush the Craft Beer Revolution https://t.co/xIf5odggda https://t.co/jDdUhjX6xf

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  15. CaptainCheers says

    October 19, 2015 at 8:30 pm

    Money: Big Beer’s 5 steps to Crush the Craft Beer Revolution https://t.co/3WliGXQeeI https://t.co/KP9cDRibm0

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  16. belgianbeerday says

    October 19, 2015 at 8:16 pm

    Money: Big Beer’s 5 steps to Crush the Craft Beer Revolution https://t.co/xIf5odggda https://t.co/jDdUhjX6xf

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  17. Horia Ciocan says

    October 19, 2015 at 5:36 pm

    Horia Ciocan liked this on Facebook.

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  18. Eric Drabenstot says

    October 19, 2015 at 5:36 pm

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  19. John Miller says

    October 19, 2015 at 3:50 pm

    I do not believe they should be able to purchase Miller. Leaving only Coors and Pabst and themselves as the big commodity beers. It’s a sort of monopoly and it shouldn’t be allowed to happen. AB is also buying craft breweries. ..this is not good…

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  20. Adam Holtvogt says

    October 19, 2015 at 3:36 pm

    Adam Holtvogt liked this on Facebook.

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  21. Brews2014 says

    October 19, 2015 at 2:53 pm

    RT @CraftCrawler: Money: Big Beer’s 5 steps to Crush the Craft Beer Revolution https://t.co/dGPemiLcaE

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  22. CraftCrawler says

    October 19, 2015 at 2:53 pm

    Money: Big Beer’s 5 steps to Crush the Craft Beer Revolution https://t.co/dGPemiLcaE

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  23. LVRGLLC says

    October 19, 2015 at 2:16 pm

    #CraftBeer #CraftBrewing #Beer #BeerBiz Money: Here’s Big Beer’s five step plan to ‘crush the craft beer revolutio… http://t.co/qbnbKJq6iM

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Trackbacks

  1. Brewery Beatdown - KaTom Blog says:
    June 23, 2017 at 9:04 am

    […] craft beer companies to try to cash in on the trend. While this has sent some craft beer fans into a panic, we have yet to see if being bought out by larger companies will affect a craft brewery’s […]

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