Anheuser-Busch, MillerCoors executives dish on the changing beer industry; “Things are more up for grabs”
What is the future of the U.S. beer industry? Who has the upper hand? And do changes at Anheuser-Busch open the door for competitors? Well, why don’t we ask Anheuser-Busch AND its top competitor? As the Guinness guys say…brilliant!
Anheuser-Busch president Dave Peacock gave a wide-ranging interviewing recently to Michael Bellas of Beverage Marketing Corp. at a New York conference. It makes for interesting reading, especially in regard to changes - or non-changes - at Anheuser-Busch as new owner InBev makes its presence felt.
Beer Business Daily reported on the conversation. We quote:
One observation Bellas made was that A-B seemed to be focused on profits now more than market share, a notion that Dave seemed to bristle at: “We have a market share meeting every week….It’s the foundation for making money and getting scale,” he said.
We’re not surprised Peacock would take issue with folks who suggest that A-B would be okay with trading away some of its market share for bigger profits. Controlling about half of the U.S. beer market and fighting rivals for every tap handle and inch of shelf space has long been entwined in Anheuser-Busch’s corporate DNA. (Just as InBev’s reputation has been built on cutting costs.)
Here’s another reason A-B might be feeling a bit tetchy: its chief U.S. rival, MillerCoors, is publicly licking its chops at the possibility of grabbing market share. Tom Long, president and chief commercial officer at Chicago-based MillerCoors, made some eye-raising comments to that effect at the New York forum.
Long said “it’s clear that a fundamental reset is happening in the beverage industry, particularly here in America,” according to Beer Business Daily. “Things are more up for grabs than they’ve ever been.”
Why? According to Long, Anheuser-Busch’s “once unstoppable momentum has been disrupted” by factors such as the steady growth of craft beer and what he called the “rejuvenation” of Miller and Coors.
Long said MillerCoors senses an opportunity to “change the basics of competition,” and for “big market share swings.” (Quotes from trade publication Insights Express.)
Very interesting indeed. Will MillerCoors be able to deliver on the bravado? We’ll know soon enough. Anheuser-Busch is unlikely to cede anything easily to MillerCoors - even a “rejuvenated” MillerCoors.
Our question is: What will happen at Anheuser-Busch if chasing market share (with more marketing, more sales reps with “boots on the ground,” etc.) runs into conflict with the goal of boosting profits? The two goals are not mutually exclusive, but neither are they necessarily the same. Will one have to give way? Something to ponder. We return to the article:
Dave also talked about how A-B has simplified processes and reduced paper reports, which they “have shrunk that down considerably and have gone paperless.” Dave said the new A-B won’t get distracted with “ancillary data” and are “focusing hard” on the areas consumers are willing to pay for. Dave also said that InBev has taught them to be more of an “answer seeking” company rather than always demonstrating that you have all the answers. “That’s a different mentality for us.”
As we’ve said before, we really want to know whether the exchange of “best practices” is a two-way street, rather than simply a case of InBev dictating terms to its latest acquisition. Anheuser-Busch brewmasters say some of their new technology is getting picked up at InBev’s far-flung breweries, which is an interesting sign. Whether it represents a trend or a departure from the norm at the new Anheuser-Busch InBev is still up for debate.
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Jeremiah McWilliams is a native Virginian who came to the Post-Dispatch in early 2007 to cover beer and other consumer products. He previously covered manufacturing for the Virginian-Pilot newspaper in Norfolk, Va. He is a graduate of Washington and Lee University. 
A-B products suk!! Now that InBev owns them, no more reason to buy their cr*pp beer people! Buy Schlafly, or Boulevard, or S.A.
O’Fallon beer isn’t bed either. And guess what, they all have a TASTE to them as a bonus!
“How really cares. Beer is nothing but a sinful drink that has caused may heart breaks. Divorce, bankrupcty, bad health. etc. Remember, of you drink, Don’t drink and forget about driving also.” -Jim Allen
My god man, are you drunk or retarded? Please have someone translate that for you and have them post it.
^^^I’m going with retarded.
Yeah, Drunken Sailor, it indeed looks like our buddy Jim had way too many Schlaflys before he started typing.
I’m in the “Who Cares” camp. I never drank A-B swill once I got out of college and could afford real beer, and I certainly don’t plan to start now. This corporation is a testimony to the sad fact that the American public will buy and consume —- on a shingle if a slick enough ad campaign is behind it.
bluick - Do you even know what makes a vegetarian? Please do research on a topic before you use it as an arguement and show your ignorance. I am a vegetarian and eat more than veggies and tofu.
All - Just hit them in the wallet. The shareholders made a money grab and sold part of St. Louis’ soul to Europe. STOP BUYING AB PRODUCTS. That is the best way to show them. Try a Schlafly Pale Ale or a Hefeweizen. For a really bold flavor, the Coffee Stout is excellent! Not a Schlafly fan? There are a great deal of local, AMERICAN beers that actually have taste to them. I invite all to try them.
And to the AB employees - I REALLY feel for you and your families. I hope you can find better employment. I have friends and family there, but I cannot support AB.
Money and greed was the reason for A-B to sell out and is the reason for In-Bev to make “changes” to increase profits. I was a loyal A-B consumer, but I can’t support the greed of a once American icon company who decided more money was more important than loyalty to it’s consumers. Miller and Coors are no different. I have embraced the folks from Chippewa Falls, Wi by drinking their American made and owned beer, Leinenkugel’s Honey Weiss. Sorry A-B, you’re the creator of your future downfall. Beer drinkers are loyal to their country before their beer manufacturer.
What Dave Peacock has been saying sounds a whole lot more like what he believes Carlos Brito wants him to say than it does the thoughts of an A-B chief executive. InBev runs the show at One Busch Place, and the InBev corporate culture is about profit enhancement through cost reduction and “financial engineering.”
Would InBev invest in marketing or sales? I doubt it. InBev probably considers A-B bloated in that respect.
Will InBev keep its cost-cutters away from the A-B brewing processes? I doubt that, too. To InBev, there are no sacred cows.
One needs to look at what InBev has, and has not accomplished. Has the global reach and, more importantly, market share, of Brahma (InBev’s Brazilian flagship) expanded as Brito promised? How do the market shares of Stella and Beck’s compare to its competitors?
One thing I do know is that, in Canada, when InBev’s Labatt’s went head to head with Molson and Budweiser, Bud was a clear winner. That, however, happened under the old A-B and before the new sheriff rode into town.
That new sheriff appears to not only be interested in the bottom line first, last and only, but also to believe that the A-B way offers little to fully satisfy that interest.
Right now it does appear the biggest market opportunity is with MillerCoors.
o.k. the looking for answers comment was made by peacock not miller. i have seen what has happened to the former and present AB employee’s. i will NEVER drink there kool aid again. miller ponies and shaflys for me. i know i am talking job loses here, but they dont care so i dont either. STOP DRINKING A-B INBEV PRODUCTS. i believe the comment about brito not liking kids and dogs. he looks like a cat person (opening can of worms.) lazy and all about him self.just like a cat.
Grant’s Farm will be a cookie cutter housing development within the next 5 years. Say goodbye to tradition!
As long as American workers are being employed what’s the difference??