#3 InBev: Branding brews from sea to shining sea

InBev is a company where good things come in threes. The company has spent the last couple years climbing up our list of beverage packagers to hit the No. 3 spot. Its three long-term objectives-which focus on execution in the marketplace, brand-building and consumer insight-generated innovation-are intended to strengthen its standing.

Based in Leuven, Belgium, the brewery backed up these objectives by introducing new products within many of its established brands, including Quilmes Stout, Alexander Keith’s Red Amber Ale and Hoegaarden Rosée. This last product, a raspberry-flavored Belgian white ale, showcases the red beverage. With a  single raspberry image on its minimalistic label and a matching red crown closure, Hoegaarden Rosée introduces an unusual color on beer shelves.

Keeping in mind the increasing negativity toward sugary beverages, H2OH!, available in Argentina and Brazil, sold more than two million hectoliters in 2007. The lightly-carbonated, natural lemon flavored beverage contains zero sugar, making it popular among consumers who want flavor and refreshment without the sugar.

2007 saw the company strike a deal with Busch (A-B) to distribute its two globally-recognized brands, Stella Artois and Beck’s, in the U.S.

Outside the U.S. and Western Europe, demand is increasing, too. The company began production in Oct. 2007 at a new plant in Angarsk, Russia, to meet increasing consumer demand in the East. It also acquired Ontario’s Lakeport brewery, the Golden Key brewery of China’s Fuijan province and two additional plants as part of its acquisition of Cintra. And it extended production capacity at three major South American plants.

Stella Artois has picked up strongly in these six premium worldwide markets: Russia, Ukraine, U.S., Canada, Brazil and Argentina. It’s the leading international premium brand in Buenos Aires and was the first to innovate Russia’s super premium segment.

Though 2007 saw Stella Artois lose volume in the UK, Beck’s picked up strongly there, beginning with the introduction of Beck’s Vier, a new product brewed with four natural ingredients and containing only 4% alcohol content. Plus, InBev successfully introduced several new flavors: Beck’s Green Lemon, Beck’s Gold and Beck’s Chilled Orange.

In 2007, the company’s Latin America North operations started the Clean Development Mechanism project, the first of its kind for a beverage company, as well as the first to be approved by the Brazilian government. The project focuses on introducing more renewable resources, such as the replacement of oil by solid biomass from rice husks for steam generation, which is expected to reduce CO2 emissions by 188,000 tons over the next seven years. The company is also proud to boast that 97% of its waste and by-products are recycled, with individual plants achieving even higher rankings, including the Stella Artois brewery in Leuven, which has a 99% recycling rate.

As of May 2008, the company was reported to be in talks to acquire Anheuser-Busch, with some sources speculating a deal of $46 billion. This news, on top of last fall’s merger of Molson Coors and SABMiller’s U.S. operations, which could be the catalyst for more brewery mergers worldwide. At the end of May, London’s Finanacial Times reported that SABMiller may be open to other deals, including one with InBev if talks with A-B break down.  F&BP