Anheuser-Busch Incorporated/InBev: Do they still hold the crown for the “King of Beers?”

Shawna L. Bendinger

International Business MT3000

Dr. Carl W. Proehl

August 23, 2015

Abstract

The Anheuser-Busch Company, Incorporated was once described as one of “America's greatest well-liked Corporations” by the Magazine of Fortune and were positioned one hundred and forty-two in the Fortune Five hundred. From its beginning as well as historical indicators, to its multiple products, prohibition, their trademark Budweiser, the Budweiser Clydesdales, and the Budweiser Frogs, to its financial issues, the acquisition, to their controversies such as the “ethical aggravation, Spykes juvenile, marketing of Alcohol, environmental documentation, and the Budweiser statement.” Plus, the company’s most recent controversial marketing strategy appearing in April of this year, “Up for whatever.” Add the shenanigans and controversial court rulings of alleged vehicular homicide and negligent homicide charges of two separate women against August Adolphus Busch IV, has the ‘King of Beers’ lost its crown, has the ‘Prince’ turned back into a ‘Frog’?

Outline

I. History

A. Established

B. Prohibition

C. Acquisition

1. 1852, St. Louis, Missouri, Eberhard Anheuser, Adolphus Busch

2. From 1920 to 1933, under the Eighteenth Amendment of the Constitution prohibiting alcoholic beverages

3. July 13, 2008 Belgian-Brazillian brewing company InBev purchased Anheuser-Busch at $70 for each and every share as well as created the fresh corporation to be given name as Anheuser-Busch.

II. Marketing

A. Domestically

B. Globally

1. Advertising domination in the United States

2. Lack of competitive marketing strategies internationally before InBev acquisition

III. Controversies

A. Questionable advertising strategies

B. Facing possible bankruptcy

C. August Adolphus Busch IV

1. Most recently, “Up For Whatever”

2. Pre-acquisition

3. Accident or Murder?

IV. Future

A. Can AB/InBev hold onto the “CROWN”?

B. Is it possible for them to be dethroned? To the Prince, or even the Frog of Beers?

History

As much as we see in advertising today, how often do we take the time to thoroughly research a product we consume or use? While some of the following research paper facts about Anheuser-Busch Incorporated/InBev (ABInBev) are common knowledge and this student was aware, many others I found extremely interesting and surprising. With that said, we will dive into the history of the company, how it became established, what happened during Prohibition, the acquisition, their marketing domestically and internationally, the shocking controversies, and finally, what the future holds for the “Crown Holder?”

When looking into the history of ABInBev, one might think Wikipedia would be the most valuable resource. However, personally I do not completely trust all the information on the website so instead I went straight to the source and the first link when you Google “the history of Anheuser-Busch”. Obviously I am speaking about the AB website, the company heritage, its history, its mission and responsibility, lest we forget, its BEERS!

During the mid-1800s a substantial representation of the German immigrants disembarked on the city of St. Louis, Missouri seeking refuge from the political eruption in Bohemia and Germany in 1848. Those new pioneers popularized an unfamiliar technique to brewing called what we know today as Lager. “The word Lager comes as of the German expression “lagern”, signifying ‘to relax’. Lager needs much time as well as care whenever preparing.” They saved the beer in timbered kegs, in “underground caverns and caves”. More than 50 of these creative breweries were said to be operating in the area by the mid-1800s.

I would like to introduce you to Eberhard Anheuser. As a skilled soap producer, the German immigrant crafted his way towards St. Louis as of Cincinnati then ultimately became the biggest “soap and candle company” in the city. Quite the entrepreneur, not knowing anything about the brewing industry, Eberhard purchased a portion of the Bavarian Brewery which had become established and began selling their beer in 1852. He seemed to be a man on a mission because by 1860, he had purchased the entire company from its stockholders and renamed it to E. Anheuser & Co.

Next let us meet Adolphus Busch. Adolphus worked as a clerk along the Mississippi River in St. Louis at the age of 18. Also entrepreneurial, by the age of twenty one years, Adolphus was the partner in the supply chain for brewing. During this period, he met Anheuser Eberhard together with his daughter Lilly. By 1861, Adolphus and Lilly became man and wife; he went to work for Eberhard, buying half of his company and becoming partner.

Unlike today, the majority of the beer that was brewed in St. Louis was also sold in St Louis. The idea of exporting or importing was practically a foreign concept, especially in the brewing business; Adolphus was determined to change that. Before he perfected the pasteurization in brewing process he needed another marketing strategy to sell this American beer. “To make a brand which would rise above the custom of local brews as well as fascinates the taste for various individuals”? He recruited his friend Carl Conrad, partnering with him to create the “American-technique lager beer which accomplished anyone’s prospects”. He described it “Budweiser” saying, “the forename Budweiser shall fascinate German settler like himself, however could effortlessly

be well-defined in Americans.” He probably could not have imagined that over 150 years later his company’s “flagship brand” would still be as successful today.

Adolphus Busch was not only entrepreneurial; he was a man ahead of his time. Creative, intelligent, and innovative he took pasteurization to a brand new level being the “first American brewer to use pasteurization”. It made it possible to export beer to communities outside of St. Louis without it harming the beer. He also pioneered “synthetic refrigeration, refrigerated railcars, as well as rail-plane icehouses” through the mid-1870s as well as early 1880s. These innovations made it possible for the company to expand-and expand they did, becoming the very first American brewing company to supply beer all over the state, having Budweiser being the “initial national brand of beer, launched in the year 1876”. Busch made Michelob to be known, “America’s original forte beer” twenty years later. He was old fashioned in his marketing methods, using demonstrated selling techniques. However, he was innovative with his organizational skills and his direct, no nonsense approach with his competitors. Besides all that, “he established the usage of giveaways as well as payments, and utilized his brewery like the showplace in favor of the community to stopover.”

To observe Adolphus’ achievements, the firm was given another name as the Anheuser-Busch Brewing Association in the year 1879. In the year 1880 Eberhard Anheuser passed away, and Adolphus took the chair of president. Unprecedented for the time, he sold over one million barrels of beer in 1901, becoming it the nation’s leading brewery. After his passing in 1913, his son August A. Busch, Sr. took the reins as president of the brewery that same year.

Marketing -Domestically

The company’s manufactured goods are of a long string of achievements as well as blends that was started when Jorge Paulo Lemann as well as partners took management of Brazilian brewer Antarctica in 1989. A long cord of contracts followed that began in 1999 when Antarctica was amalgamated with Brahma to form Ambev. Consequently this corporation amalgamated with Belgian brewer Interbrew in 2004 to create Inbev. In 2008 Inbev made an offer for American-grounded Anheuser-Busch hence the present corporation was born. In 2013 as well as 2014 the procurements of Grupo Modelo in Mexico in addition to Oriental Brewery in South Korea followed. The outcome of this process is a corporation that over a comparatively short period turns out to be the biggest as well as the most profitable brewer globally. It is similarly one of the leading customer branded products corporations in the world with a huge collection of sixteen diverse billion dollar brands. When observing closer at the corporation, it becomes manifest that its strong point is mostly focused on the American region with important market share locations in numerous important markets which include the United State of America, Mexico, Brazil, Canada as well as Argentina, in the midst of several world's most commercial beer markets. (Louis, 2009).

Marketing- Globally Externally, the company has constructed a big presence in Asia which is presently the largest brewer in that continent. In Europe the corporation is moderately weak but it traces Heineken as well as Carlsberg by a very wide margin with only some pockets of strength with Belgium leading followed by Netherlands. AB Inbev has no important presence on the African continent which is conquered by SABMiller as well Heineken. What leads to AB Inbev attractiveness is the reality that it completely dominates the American continent, which contains some remarkably money-making beer marketplaces (Rienzo and Targowski, 2004). This has permitted the firm to attain extremely great margins; much greater than Europe-based Heineken as well as Carlsberg for example and profoundly greater than UK-based SABMiller too. Product development is another way of marketing the company employs. In order for the firm to grasp the maximum number of consumers as well as increasing their incomes, it is significant for them to carry on in developing new products. They have lately carried out this by producing the products MixxTail as well as Oculto. The firm has distributed these produces with the aim of targeting the youthful generation of alcohol customers, between the ages of twenty-one and thirty, who are well known to fancy hard alcohol. Oculto is a tequila spiced beer. Though the product itself does not really contain any tequila but it is prepared using similar plant used to make tequila, agave. Oculto is also mixed with beer that has been matured in tequila tubs in order to add it the divergent taste. Oculto also has six per cent alcohol content, although the average American beer comprises about five per cent alcohol.
Mobile application is another market strategy used by Anheuser-Busch. From the contribution element to their marketing call to Action, they have executed an empirical application known as Charity Beer. This is to help in connecting with the idealistic generation. The company’s determination is that a mobile application could be the supreme efficient way to involve their aimed demographic. Through this application, the firm encourages the company social responsibility required by their optimistic market by making use of a point system glued to the quantity of Anheuser-Busch good bought by the consumer. Each and every Anheuser-Busch products bought from the supply centers will have an exclusive, five digit code that can be scanned using the application; ➢ For bottled brews the code will be positioned under the cap. ➢ For boxed packages, the code will put under the cardboard fold. Every point relates to the quantity amount bought. For instance, if the customer buys a case of thirty cans of Budweiser, the code scanned will record on the application as thirty points.
Advertisement
Busch Anheuser is most excellent normally recognized for diverse categories of beer which they manufacture. Several individuals are never aware of the other items which are available in this firm. Together with its refrain recreational areas, Busch Anheuser possesses its automotive, recycling, and casing, in addition to media corporations. The company similarly vends several merchandises associated with their beer, for instance garments. Initially, Anheuser-Busch's duty opinion is to offer the consumers with eminence beer. Nevertheless, Anheuser-Busch is the firm which offers the comprehensive variety of activities within varied aspects of the corporation. These distinct factions have to be together towards making the end output. These includes: Anheuser-Busch company which is firm's brewing auxiliary, Anheuser-Busch which is the corporation's global beer subsidiary, Busch Agricultural Resources that delivers extraordinary excellence brewing raw substances as well as services towards Anheuser-Busch's fermenting processes, then finally Busch Media Group who does every media development as well as purchasing for Anheuser-Busch's promotion. The countless deals of determination alongside synchronization by these factions is the mode by which eminence Anheuser-Busch goods like Budweiser might be available at any grocery in an inexpensive price with gorgeous packaging (Thomas,2003)
Anheuser Busch is a tremendously great company that functions globally. Budweiser is the merchandise of Anheuser Busch which is presently the number one vending beer in the world. The company’s marketing approach creates this feasible Anheuser Busch characteristically promotes their goods in the period of sports occurrences. The sport spectators are big viewers which naturally comprises of individuals that possess similar general outlook concerning matches they do watch. Thus a target markets is available for Anheuser Busch due to this reason. Budweiser is advertised extremely during the course of the football time of year. This shows that their target marketplace during football time of year are naturally loud as well as obnoxious men ranging from the ages of eighteen to forty-nine who are weighty thus having a basic sense of humor. This is prodigious since a large section of the USA population does fit this profile. Its marketing strategies make this supremacy of the beer manufacturing possible. The good thing concerning beer is that it does not have a substitute. Thus a better or else more effective product will never substitute beer. Provided that Anheuser-Busch efficiently advertises their manufactured goods to the customer multitudes, they will still dominate the beer manufacturing sector.

Budweiser has remained the world's successful selling beer since nineteen-fifty seven; hence it is dispersed in more than seventy countries. Budweiser over rides the United State of America’s finest beer category, overtaking all other national premium beers put together. The records shows that, one in nearly every five beers vended in the United States currently is a Budweiser, because of this, Anheuser-Busch is a highly money-making as well as financially steady corporation (Budejovicky, 2015).
Controversies
Anheuser- Busch has been sponsoring LFL league as one way of supporting the community. There occurred a controversy during the process for instance; AB InBev answered earlier this month, articulating disapproval as well as dissatisfaction toward both important players such as Ray Rice as well as Adrian Peterson in addition to the general way the NFL has managed the condition so far. The company said that; “We are dissatisfied as well as progressively troubled by the current events that have outshone this National Football League season hence we are not yet contented with the way the league handled behaviors which so plainly go against our own corporation culture as well as moral code. We have talked about our worries as well as prospects with the league”. It is still relatively likely that some customers will be irritated that AB InBev did not respond more keenly as well as cancelling their support of the National Football League fully. Nevertheless, it would possibly cause a larger amount of dissatisfaction from intransigent football fans if they really had withdrawn their support fully. Withdrawing significant support from the National Football League is not a thoughtful action that the most of the United States could take flippantly, in any case, it would result into sales reduction for Anheuser-Busch. But like the arguments of an advanced investor at a shareholder’s summit, this tactic seems the greatest even-keeled method to reserve partnerships while statically advocating for main changes as well as being heard.

Future plans to hold on the Crown The Anheuser-Busch company has introduced various technologies to ensure they hold on the crown for instance, Beacon Technology. This creates a strong hold on the product supply opportunities. Through this technology, the company uses their wide range of geographical locations as well as the scope to target the customer wherever they are located globally. This technology is an eccentric means to alert a customer of deals, opportunities, as well as stores nearby to grasp a brew. Beacon technology is a current innovation that uses Bluetooth to sense when a consumer is in near proximity to Beacon transmitters. This is a comparatively new inventions that is will have to be embraced by numerous large brands, and it rapidly gain traction by vendors. This technology permits the corporation to track the route of the customer in stores or else send notices to them alerting them of distinct offers or else promotions. Anheuser- Busch would attain benefit from this technology by also coming up with a free application which directs push notices to the user as long as they are nearby an AB Beacon. These notices could include vouchers for discounted beer at the warehouse, bar, or else restaurant they are at present. It would also inform them of any forthcoming promotions for example happy hours. So as to avoid the application from being too invasive with its notices, consumers would have the choice to snap which brands they are attracted to as well as the locations they want to obtain notices. (Megan and Raquel, 2015) Brand Ambassadors Bud Light is another method used by Anheuser- Busch Company to ensure it remains in the top crown. This increases significantly the benefits gained from a brand ambassador package. This process would entails hiring university students who are twenty-one years and above to carry out promotion on the Bud Light brand at campus bars as well as during parties. These students are referred to as campus representatives. They would not receive any payment upfront but on the other hand, they would have the occasion to receive cash rewards for influencing friends as well as classmates to download the AB application on their phones as well as tablets. They would also obtain free t-shirts, labels, as well as other Bud Light curtain to continue promoting the brand. This program would have to be prolonged to the Budweiser brand too, even though it is not as popular among campus students. This is an unlimited opportunity to advance develop a networks with the idealistic population as well as comprehend their feelings, views, as well as motivations.

References

Thomas, T. (2003). Diversity at Anheuser-Busch. Retrieved

From.www.anheuser-busch.com/overview/diversity.html

Rienzo, T, & Targowski, A. (2004) .Enterprise Information Infrastructure.

Kalamazoo: Paradox Associates press, New York.

Megan, H. &Raquel, A. (2015) .Brewing Up Controversy: A Case Exploring the Ethics

Of Corporate Tax Planning. Issues in Accounting Education In-Press.

Lee University.

Louis, M. (2009). Anheuser-Busch Inc. PricewaterhouseCoopers LLP Report.

. Budejovicky, B. (2008). Anheuser-Busch Inc. Budejovicky Budvar publication PNP. USA

Adam, H. (2014). Growth- Dealing with market shifts. Accessed

From http://www.forbes.com/sites/adamhartung.html