Brewer consolidation is shrinking the beer world, but more import brands in
fewer hands is a mixed blessing for retailers and consumers.
By Michael Sherer
I
Modelo it didn't already own.
That handful of deals has changed the brewing landscape in the U.S., as well as the picture for imports. Indeed,
even the definition of an imported beer may be changing
(more on that in a bit). In 1971, for example, four brewers
controlled nearly 70% of the U.S. beer market by volume.
Three of them—Schlitz, Falstaff and Schaefer—have been
out of business for decades. In 2010, according to data compiled by the Beer Handbook and Beer Marketer's Insights,
A-B InBev and MillerCoors controlled almost 80% of the
U.S. market by volume. Crown
Imports, Heineken USA and
Diageo/Guinness accounted for
another 10.5%, with the remainder
coming from all others.
Globally, A-B InBev and
SAB/Miller continue to snatch up
small breweries, adding new brands
and local brewing capacity to their
portfolios. On one hand, the proliferation of brands is good news for
consumers. In theory, globalization
of the industry means that consumers, whether they live in Peoria
or Poughkeepsie, can get brews
from all over the world that were
formerly out of reach. In theory…
f the beer industry was a Disneyland attraction, you
might hear "It's a Small World After All" playing at
the entrance, but the ride would be more like "Pirates
of the Caribbean," big, fast ships full of rapacious
pirates sailing the Seven Seas, plundering and pillaging as they go. With all of Captain Jack Sparrow's charm,
of course. But it isn't. This is business, big business.
The past decade has seen beer companies brew up a
half-dozen of the largest industry
deals in history. Following South
Africa brewery SAB's purchase of
Miller in 2002, Molson and Coors
merged in 2003; SAB/Miller then
put together a deal with Molson
Coors to form MillerCoors, a conglomeration of their U.S. business;
and a joint venture of Carlsberg
and Heineken purchased Scottish
& Newcastle in 2007.
The biggest deal so far, in
2008, was Belgian brewer InBev's
$52 billion hostile takeover of
Anheuser-Busch (and InBev itself
was a merger of Brazilian brewer
AmBev
with
the
Belgian
Interbrew). In 2010, Heineken
Leading import brand Corona
purchased Femsa in a bid to ward Extra, and its sibling Corona Light,
off the competition from the latest feature an extensive marketing
deal, AB InBev's recently approved program for Cinco de Mayo and the
purchase of the 50% of Grupo summer selling season.
42 • Beverage Dynamics • www.beveragedynamics.com • May/June 2013
Ups And Downs
P
roliferation, while great from
the standpoint of offering
consumers more choices, also