Thursday, May 29, 2008

The Big are Getting Bigger

So, if you're in the brewing or distribution industry, raise your hand. OK, you can put them down. If you're an afficianado, raise your hand. OK, thanks, you can put them down, now. If you've randomly stumbled across this site and will be leaving soon, raise your hand. Oh, already left. Right. Well, not that it matters, I can't see you anyway. I was just trying to gauge whether anyone actually cares about this whole InBev-AB thing.

If you're wondering who "InBev" are and what "AB" is, you can find out here and here, respectively. Needless to say, this aggregation would create the largest brewing entity in the world and the fifth largest consumer products company in the world. The news broke about this beast of a transaction early last week and I've put off commenting about it for now.

But, now it appears that SABMiller is getting in on the action. While Bud is mulling its options, Miller has said they would welcome a "partnership" with InBev [cite, via the omnipresent Brew Blog], and InBev appears to be taking this seriously. It appears that this SAB-InBev move may just be a play to force A-B's hand; surely such a merger would be dark days indeed for Bud. Or at least on an international stage.

And, that's an interesting dilemma for Budweiser; by foregoing this merger, Anheuser-Busch would basically be saying "Damn globalization. We are OK with the American market and we think anything more would dilute our brand. The rigors of being under InBev's bland-marketing thumb would sully our reputation. We have a reputation for quality product and quality service and we are unwilling to compromise that reputation for the prestige of a larger global identity. We are perfectly happy being the number one brewery for the number one country in the world, and we think that's good enough." Because the fact is everytime InBev takes over a brewery, they cut marketing budgets in that organization in favor of a centralized marketing system that emphasizes the niche that each brand can fill. I suspect Budweiser's niche would be the "hard working, beer as sustenance, male" niche. Which, granted, is filled all over the world, not just here in the U.S.

It's funny because I'd never really thought much of Budweiser. I've never really liked Budweiser, and while I went through a brief "Bud Ice" phase, I've mostly been an MGD person for my swill of choice, though lately it's been PBR and/or High Life. But I was talking with an ex-tavern owner over the weekend, and he made an interesting comment. He told this story about a friend of his who had stopped managing his own tavern and took up with the Budweiser distributor. This friend would ride along when the distributor was dropping off the A-B products and would talk to the various tavern owners and managers. The guy would ask how things were going, whether the distributors were treating the tavern owners alright, whether the managers were happy with how the product was selling. Typical tavern chit-chat. And then, three times a year the tavern owner would get a survey from Budweiser asking many of the same things. If anybody marked any response with a "3" or lower (on a 5-point scale) Budweiser would call and ask why; they at least listened like they cared. I thought that was interesting. But what I found most interesting was this: A-B was the only one doing it; not Miller; not Coors; not Pabst. The tavern owner I was talking to said he sold primarily Bud for that very reason; he told the other brewers and distributors that if they would do that, he would be happy to sell, but that alone showed a dedication to customer satisfaction that none of the others seemed interested in pursuing.

Of course, that's hearsay as far as all of you are concerned. But, it does make this point: Budweiser will no longer provide that kind of dedication to customer satisfaction if they are purchased by InBev - and that's a shame.

But that's also a lesson to be learned for all of the craft breweries. It is a way to differentiate yourself. Customer service that the big guys are simply too big to provide. Go on ride-alongs with your distributors and talk with your retailers. Get out to the pubs and talk with the people drinking your beer. Get out to the grocery stores and thank your buyers for purchasing that six-pack. Support your community events. Many of the craft brewers I talk to here in Wisconsin are already doing this and that's why I think we have such a strong and vital brewing industry here. Not only is it a state that has an innate desire to drink local, but it's further ingrained by the breweries here being active in their communities and giving back as much as the communities give to them. The More You Know.

Well, heck, this was kind of an old-school post - it got pretty far from where I thought it would go when I started writing it, but that's alright. This point is perfectly as good as the one I was going to make about the need for small breweries to band together in informal, or formal, organizations and pool resources to help each other where they can. For example, a buying group to buy in bigger bulk to get price discounts and reserved quantities for grains and hops that all of the members need to buy anyway. For example, an advertising group to place general advertising that benefits the group (e.g., "Milk it does a body good." or "Pork, the other white meat." or "Wisconsin craft beer, we aren't just Leinenkugel's anymore.") I'll write some other time about how I'm amazed that the craft breweries aren't doing this stuff.

By the way, sorry for posting a day late - while I was able to get a post up on Monday, the holiday threw off my schedule. See you tomorrow, too!

1 comment:

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