For college students, Americana might look something like this: apple pie, baseball and Bud Light. But after recent business developments, the great American party beer may be no more.
Although the acquisition will not be legally completed until the end of 2008, the recent announcement that Anheuser-Busch was acquired by InBev, the Belgium-based leading global brewer, has left some students wondering what will become of their Bud Light beer balls. But experts say there is nothing to worry about, because while the brewery’s owners are changing, little else will.
“The merger won’t have an effect on the American beer industry in the short-term,” said Michael Power, an information, operations and analysis lecturer at Northeastern. “In the long term, it depends what InBev does. If they move production of Anheuser-Busch products to somewhere outside the US, then it will have a very negative effect.”
Anheuser-Busch was the leading American-owned brewery with 48.5 percent of the market share of total U.S. beer sales. It brews iconic American beers, including the world’s best-selling beer, Budweiser, on which the company has built its reputation, according to published company data.
When the two companies combine, into Anheuser-Busch InBev, Budweiser will expand globally, becoming the company’s flagship brand, according to a press release.
“There has already been push-back from some customers,” Power said, “but if the level of quality is maintained, sales should not be affected.”
The apprehension from some customers is visible on Facebook, where some college students are showing the beer industry how they feel by creating Facebook groups like “Fuck InBev.” The group was started by Alex Christian, a student at the University of Missouri, and already has more than 500 members who are concerned about the loss of the iconic American brewery.
“It doesn’t change the quality of the beer, but it’s just disheartening to know that the beer you have in your hand was made by a company that is now owned by Belgians and not Americans,” said Ted Zimmerman, a member of the “Fuck InBev” Facebook group and a student at the University of Missouri. “It’s still ‘The Great American Lager,’ but it just doesn’t feel as unique to America anymore.”
But some Northeastern students say they aren’t as concerned.
“InBev’s acquisition won’t have any effect on Bud Light as a staple for huge parties and barbecues,” said John Rigby, a junior criminal justice major who said he had been following the acquisition. “InBev isn’t going to fool around with the recipes or the marketing juggernaut that supports the [Anheuser-Busch] name, and in another few weeks the public will move on and forget all about the acquisition. So unless InBev does something stupid like discontinues all of [Anheuser-Busch’s] community service initiatives, everything will settle back to business as usual.”
All of the US breweries will stay open, and the distribution and sales system for Anheuser-Busch’s products in the United States will remain unchanged, according to an InBev press release. Many of InBev’s current brands, including Stella Artois, Beck’s and Bass, will expand their US markets via Anheuser-Busch’s current distribution system.
Anheuser-Busch and InBev currently have no plans to change their marketing, according to the release.
“They want to keep their marketing consistent to limit the impact on customers,” Power said.
Anheuser-Busch is not the first American-owned brewery to be acquired by a larger global brewery. South African Breweries PLC acquired Miller Brewing Company in 2002, forming the world’s second largest brewery, SABMiller.
In October 2007, SABMiller and Molson Coors Brewing Company announced they were combining their US operations of Miller and Coors, respectively. MillerCoors is the result of the joint venture.
Although Anheuser-Busch was not the first American-owned brewery to be acquired by a foreign company, some students still view it as a betrayal.
“By selling out to InBev [Anheuser-Busch] has betrayed the American public they have served for almost 130 years as the premier American beer company,” Christian said in an interview. “I personally am opposed to the merger because, in my opinion, this is just the first step in Europe’s reclaiming of American business.”
Some competitors, like Pabst Brewing Company, see InBev’s acquisition of Anheuser-Busch as an opportunity to lure customers whose loyalty to Anheuser-Busch has been disturbed, since it is no longer the largest American-owned brewery, analysts said.
“Pabst Brewing Company will be the last of the famous iconic US brewers to be fully independent and American-owned,” according to a release from the Pabst Brewing Company.
Pabst is currently conducting market research to determine if they should rebrand their products to incorporate the fact that it is now the largest American-owned brewing company, according to the company’s website.
While Pabst is the largest American-owned brewery, it is a virtual operation, having their beers made and bottled at other breweries, according to Hoovers, an international business research company. The Boston Beer Company, which produces Samuel Adams beer, is the current largest American-owned brewing company that owns its own breweries.
“On the news recently, the founder of Sam Adams, Jim Koch, was laughing at the fact that they are now considered the largest American brewery,” Power said. “I definitely think they will take advantage of it in their marketing.”
The merger affects more than just Anheuser-Busch, its competitors and the beer industry, Power said. The merger is just one example of a larger trend of globalization.
“Customers want a high quality product at a low price. Anheuser-Busch did not have much of a choice,” Power said. “Costs kept rising domestically, so they took the opportunity to merge with a global brand and expand their product internationally.”