Anheuser-Busch's Motto in 2015: Can't Beat'em? Buy'em

30 Dec Anheuser-Busch’s Motto in 2015: Can’t Beat’em? Buy’em

Posted at 18:45h in Uncategorized by Justin Knepp 0 Comments

By Mathew Muncy for Indiana On Tap

It’s no secret that Anheuser-Busch InBev has been losing market share in the United States thanks to the resurgence of the craft beer industry. Craft beer is up 6.6 percent in market share since 2009 (4.4 to 11 percent), taking a bigger cut out of AB InBev’s sales than they probably anticipated. To combat craft beer’s rise, AB InBev has taken the stance of, “If you can’t beat’em, buy’em.”

2015 has been arguably a huge year for AB InBev, at least in terms of their future. To start the year, AB InBev acquired Seattle-based Elysian Brewing Company in January. AB InBev then took a shot at the same market they were moving into by creating a commercial for the Super Bowl mocking those who drink, “Pumpkin Peach Ale.” The hypocrisy of the commercial did not go unnoticed, as Elysian Brewing makes a peach pecan pumkpin beer, according to an Adage.com article.

After their commercial backfired, the beer behemoth stayed quiet, pondering their next move, one that would rock the beer industry across the world.

In September, AB InBev made an offer to rival SABMiller in an attempt to merge the two largest beer corporations in the world. SABMiller played hardball though, pushing the purchase price up along the way. While the two beer titans discussed their merger, AB InBev continued working on another craft brewery acquisition: Golden Road Brewery.

Unlike the Elysian acquisition, where AB InBev made the initial move, Golden Road Brewery started the acquisition talks with AB InBev, according to John Verive of the L.A. Times. Golden Road would become the fifth craft brewery to join the High-End division since 2011, but the purchase was a drop in the bucket compared to announcement AB InBev would make just a few weeks later.

On October 13, AB InBev and SABMiller came to terms on a merger to the estimated to be between $104 to $108 billion. As of writing, the merger has not been officially completed, but both sides continue to sell off certain beers to make the deal more acceptable as they seek to gain regulatory approval in several countries.

AB InBev’s 45 percent market share in the United States will remain unchanged as they plan to sell the Miller brand to Molson Coors Brewing. The merger ultimately helps them gain a strategic foothold in countries like Africa, Asia, and Central and South America, while bringing their global market share to roughly 30 percent.

Even though they were working on one of the largest mergers in the history of business, AB InBev maintained their aggressive purchasing of craft breweries.

On December 18, AB InBev purchased Arizona-based Four Peak Brewery. Three days later they added UK-based Camden Town. And on December 22, they struck a deal with Colorado-based Breckenridge Brewery. None of these deals are expected to be completed officially until January 2016, but acquiring three craft breweries in four days definitely sent a message to the rest of the craft beer industry.

All seven craft breweries that AB InBev has acquired in the United States had a production rate of 40,000 barrels or more, meaning they were some of the biggest craft breweries in the country. While that hurts the craft beer industry and their market share, the good news is more craft breweries are opening every day. As of November 2015, there were a record amount of breweries in the United States and you can bet many are ready to take the place of these former craft breweries.

AB InBev won’t be happy until they regain the market share they’ve lost to craft beer, and since they can’t beat’em, you just buy’em, right?