sales in 2010 fell by 1.5% in America and 2.3% in western Europe, says Nomura, a Japanese bank
Over the past decade they have bought or merged with local brewers, thereby gaining access to their all-important distribution chains. A $52 billion tie-up in 2008 between Anheuser-Busch, the American brewer of Budweiser, and InBev, a Brazilian-Belgian firm, saved a fortune.
But although consumption per mouth in poorer countries has far to go to catch up with the West (see chart), growth is set to slow, predicts Nomura.
Worse still, emerging markets are not nearly as profitable as rich ones. Anheuser-Busch InBev (ABI), now the global leader, sold a third of its beer in North America in 2010 yet reaped 46% of its profits there
Since the margins in supermarkets are thinner than those in bars, that spells trouble for brewers.
Their dream is to sell beer like premium-priced detergent, using uniform global marketing campaigns organised from head office.
Shoppers can easily buy the supermarkets’ cheaper own-label beer instead of costlier brands
Few drinkers might want to be seen in public necking such downmarket stuff, but in the privacy of their own homes, who can tell the difference, especially after five or six?
To retain their price advantage without losing sales, the brewers will need to market their brands as heavily as soapmakers do
Yet the big brewers have been parsimonious in their marketing budgets, typically investing just 10% or so of their revenues, compared with around 15% at companies like Unilever and Procter & Gamble. They will need to spend more just to stand still
Brewers are hoping that, as incomes continue to rise in India and China, drinkers will abandon moonshine, tea and other poisonous muck, and upgrade to premium beer
SABMiller has been talked of as a potential buyer for Molson Coors, Australia’s Fosters, Efes, Turkey’s largest brewer—though it might find itself in competition with Heineken. ABI, it is said, may seek to take full control of Groupo Modelo, Mexico’s number-one beermaker, of which it already owns half.
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