Global Beer Manufacturing
Industry Overview
Major Players
Primary Advertising Methods
Analysis
Recommendations
Industry
Overview
Industry Structure
HHI
Market Share
Anheuser-Busch
InBev
692.01
Four Firm
Concentration
SABMiller
18.0%
Heineken
48.3%
15.4%
Carlsberg
9.2%
48.7
3%
6.1%
Asahi
Other
IBISWorld.com
Industry
Overview
IBISWorld rates the
degree of barriers to
entry as:
High
Steady
Barriers to Entry
Barriers Include:
*Economies of Scale
*High sunk cost and capital requirements
 *Regulations
 *Tight control over distribution channels by existing
players.
 *High levels of brand loyalty.


Mitigating Factors: 1) Improvements in technology have
cut down on costs of establishing efficient breweries. 2)
Propensity to purchase imported beer/trying new beers
has led to alliances that cut down on competition
IBISWorld.com
Industry
Overview
Level of Technology
Change = Medium
Basic process is the
same, but turning to
more automation
Precision measurements
enhances quality control
Technology & Systems

Driver: Cost Reductions

Combining technology and
innovation to differentiate
 Example: Heineken’s Draughtkeg
Utilizing new techniques
developed by other food
industries
IBISWorld.com
Industry
Overview
Industry Performance
Life Cycle Stage:

D
E
C
L
I
N
E



Enterprise numbers are
declining
Industry value added growth
Only moderate technological
change occurring
Static per capita consumption
in key markets
IBISWorld.com
Industry
Overview
Industry Competition is:
Medium
Increasing
Competition


Key Means of
Differentiation:
*Brands
*Price
*Distribution networks
*Taste
*External competition

High competition within
national borders
Medium competition on a
global scale
Internal Competition versus
External Competition
IBISWorld.com
Industry
Overview
Globalization
Level of Globalization:

*Medium

*Increasing

Definition
Key multinational companies
Cross country mergers
 AmBev + Interbrew =InBev in 2004
 South African Breweries + Miller
Breweries = SABMiller in 2004
 Anheuser Busch + InBev =
Anheuser Busch InBev in 2008
IBISWorld.com
Industry
Overview
Key Success Factors





Market research and
understanding
Using data to shape new
product development,
consumer targeting, and
branding activity
Global expansion
Portfolio of brands
Establishment of brand names
IBISWorld.com
Beer Consumption 2002-2008
2960
2940
Millions of 2.25 Gallon Cases
2920
2900
2880
2860
2840
2820
2800
2780
2760
2002
2003
2004
2005
2006
2007
2008
Beer Handbook
Revenue Growth Chart
Revenue Growth Rate Chart
IBISWorld.com
*Customs & Traditions
*Disposable Income
*Geography
*Demographics
*Regulations
*Special Events & Weather Conditions
*Advertising
IBISWorld.com

Cultures
 Middle East – Less per capital alcohol
consumption compared to Ireland
 Germany: Beer > Wine
 France: Wine > Beer
Retail Dollars by Beverage, 2008
120000
$ Millions
100000
80000
60000
40000
20000
0
Beer Handbook
Share of Alcohol Beverage
Consumption by Category
Chart Share of Total Alcohol
Beverage Retail Dollar Sales
6%
9%
33%
Beer
Beer
Wine
Wine
53%
Distilled Spirits
85%
14%
Beer Handbook
Distilled Spirits
Share of Total Beer Consumption by Category
3% 3%
8%
Light
8%
Imported
Premum
Super Premium, Craft & FMBs
52%
13%
Popular
Ice
Malt Liquor
13%
Beer Handbook
Frequency of Drinking
Occasions
Average Number of Drinks
Consumed in the Past Week
6
5
Everyday
7%
About once a week
10%
9%
29%
<once a week
Only on special
occasions
Never
# of Drinks
32%
4
A few times a week
13%
3
2
1
0
2000 2001 2002 2003 2004 2005 2006 2007 2008
Beer Handbook
Income Distribution of Beer Consumers
9%
8%
75K & up
60K-75k
8%
48%
50K-60K
40K-50K
30K-40K
8%
20K-30K
Under 20K
8%
11%
Beer Handbook
Gender Distribution of Beer Consumers
38%
Male
Female
62%
CITATION
Education Level Distribution of Beer Consumers
11%
11%
Graduate
3%
Attended Graduate School
17%
Graduated College
30%
Attended College
Graduated High School
28%
Attended High School
CITATION
Age Distribution of Beer Consumers
13%
7%
20%
21-24
15%
25-34
35-44
45-54
55-64
65+
23%
23%
Beer Handbook
Race Distribution of Beer Consumers
12%
3%
9%
White
Black
Asian
Hispanic
76%
Beer Handbook
Share of Total Beer Sales by Month, 2008
November
September
July
May
March
January
0
2
4
6
8
Share of Sales (%)
Beer Handbook
10




Open States/Control States
“Moderation” campaigns
Bureau of Alcohol, Tobacco, Firearms, and
Explosives
Advertising and Marketing Code
 Key Guidelines
IBISWorld.com
Global Scale
Anheuser Busch InBev
Heineken
SABMiller
Carlsberg
Asahi
18% Market Share
Belgian roots
Portfolio of over
300 brands
1880
Commitment to
innovation
Advertising
success over the
past 150 years
1982
http://www.anheuser-busch.com/historyOfMarketing.html
9.2% Market Share
Roots in the Netherlands
Over 200 international
premium beer and ciders
Brand strategy focuses on
building local and
international brands
1864
2000
Also manufactures wines,
spirits, and soft drinks
Beer accounts for
approximately 75% of their
revenue
http://www.heinekencollection.com/pages/content/S2/historytimeline_nl.aspx
15.4% Market Share
Portfolio of over 150 brands
Brands International
Presence in 75 countries
•Grolsch Premium Lager - The Dutch premium
quality lager
Diversified: One of the
largest bottlers of CocaCola in the world, makes
wines, spirits, and juices
*Miller Genuine Draft – The original cold-filtered
draft beer
*Peroni Nastro Azzurro – Italian style in a bottle
Competes mostly in the
premium sector of beers
* Pilsner Urquell – The Pilsner from the original
source
http://www.sabmiller.com/files/pdf/corporate_presentation.pdf
6.10% Market Share
Sold in over 150 countries
Portfolio of over 500 brands
Roots in Denmark
Focuses on Western European,
Eastern European, and Asian
markets predominately
Strong revenue growth due to
acquisitions of businesses previously
owned by Scottish and Newcastle
The Old Brewery, 1847
http://www.carlsberggroup.com/Experience/Footprints/Valby/Pag
es/TheOldBrewery.aspx
3% Market Share
Founded in 1889
Largest brewer by value in the North Asian region
Diversified into other liquor categories, though majority of revenue comes from beer
sales
http://www.asahibeer.co.jp/english/companye/enterprise.html
National Scale
Anheuser Busch In Bev
Heineken
SABMiller

Bud Bridge
Wildlife & Habitat Conservation
Recycling
Conservation Partners
Renewable Energy
Scary Movie 2
Bud light Porn
MILLER LITE = TASTE. BUD LIGHT = DRINKABILITY
Miller light vs bud light
2009
2008
2007
2006
2005
AB InBev
4,992,000,000
3,350,000,000
3,140,000,000
2,792,000,000
2,307,000,000
2,281,000,000
3350,760,000
2,262,000,000
1,797,000,000
1,521,000,000
2,223,000,000
1,262,820,000
2,178,000,000
1,998,000,000
1,811,000,000
SABMiller
Heineken
MergentOnline & Annual Reports
2009
2008
2007
2006
2005
4%
14%
15%
16%
17%
12%
16%
12%
12%
12%
10%
6%
12%
13%
14%
AB InBev
SABMiller
Heineken
MergentOnline & Annual Reports
Beer Industry Advertising Expenditure by Media Per Year
450
400
350
$ Million
300
250
200
150
100
50
0
Magazines
Newspapers
Outdoor
TV-Network
TV-Spot
TV-Cable
Radio-Network
Radio-Spot
Beer Handbook
Ad Expenditure by Media Type
1%
25%
Total Print
Total TV
Total Radio
74%
Beer Handbook
0.9
% Expenditure by Media Type
0.8
0.7
Percentage
0.6
0.5
% Print
0.4
% Broadcast
0.3
0.2
0.1
0
Anheuser-Busch
Heineken USA
Miller
Beer Handbook
Dollars Spent on Network TV Advertising
600,000,000
500,000,000
$
400,000,000
300,000,000
200,000,000
100,000,000
0
Anheuser-Busch InBev
HEINEKEN NV
Sabmiller Plc
TNS-Media Intelligence
Ad Spending per Case of Beer
$0.80
$0.70
Ad Spending Per Case
$0.60
$0.50
$0.40
$0.30
$0.20
$0.10
$0.00
AB InBev
MillerCoors
Heineken USA
Beer Handbook
3000
Program Type - General
2500
Count
2000
Anheuser-Busch InBev
1500
HEINEKEN NV
Sabmiller Plc
1000
500
0
Sports
TALK
Drama/Slice-of-Life
Comedy
TNS-Media Intelligence
700
600
500
400
300
Anheuser-Busch InBev
HEINEKEN NV
Sabmiller Plc
200
100
0
TNS-Media Intelligence

Anheuser-Busch: Superbowl $6
million for 30 seconds

Heineken: NFC Football
Championship game $1 million

Miller Light 1.2 million for NCAA
basketball championship game
TNS-Media Intelligence
1400
Channel
1200
1000
Count
800
Anheuser-Busch InBev
HEINEKEN NV
600
Sabmiller Plc
400
200
0
ABC
CBS
FOX
NBC
TNS-Media Intelligence
1200
Time of Day
1000
Count
800
Anheuser-Busch InBev
600
HEINEKEN NV
Sabmiller Plc
400
200
0
Daytime
Early
Night
Prime
TNS-Media Intelligence
1400
Days of the Week
1200
1000
Count
800
Anheuser-Busch InBev
HEINEKEN NV
600
Sabmiller Plc
400
200
0
SUN
MON
TUE
WED
THU
FRI
SAT
TNS-Media Intelligence
2500
Weekend/Weekday
2000
Count
1500
Weekend
Weekday
1000
500
0
Anheuser-Busch InBev
HEINEKEN NV
Sabmiller Plc
TNS-Media Intelligence
900
Most Popular Times
800
700
Count
600
500
Anheuser-Busch InBev
Heineken NV
400
Sabmiller Plc
300
200
100
0
Late
Prime
Saturday
Afternoon
Saturday Early
Sunday Afternoon
Sunday Early
TNS-Media Intelligence


21-24 & 65+ Are least loyal
Most loyal: 45-54 year olds. Retention!
Mintel

Recent Merger
AnheuserBusch
Goodwill
Heineken
52125 Million 8610 Million
SABMiller
8734
Milliion
Mergent

+ Net Income of 3.1 Billion in 2009
Yahoo Finance

+ Net Income of 1.9 Billion in 2009
Analyst Recommendations and Revisions
Current 1 month ago 2 months ago 3 months ago
BUY
4
3
4
4
OUTPERFORM
3
4
4
3
UNDERPERFORM
3
3
3
4
SELL
1
1
1
1
Yahoo Finance & Reuters

+ Net Income of 1.3 Billion in 2009
Analyst Recommendations and Revisions
1 Month 2 Month 3 Month
Current
Ago
Ago
Ago
BUY
8
8
8
8
OUTPERFORM
5
7
8
8
UNDERPERFORM
SELL
3
1
1
1
1
2
1
2
Euroinvestor & Reuters

Recall
 for online and 46% for
TV

Likability
 26% online and 14% on
TV.