In this day and age, we take the existence of beer juggernaut AB InBev for granted. Even with the rise of the American Craft Beer scene, the perennial giant continues to flourish, growing strongly yet steadily in recent years. (Figure 1 below shows this trend.)
Yet AB InBev started out like any other firm: small and with an uncertain future. Certainly, Anheuser-Busch, which in a way follows the tale of the classic rags-to-riches/American–Dream storyline, had humble beginnings. For all the innovation and hard work Adolphus Busch, Eberhard Anehuser, and Carl Conrad invested in creating their famous American-style lager in 1876, they probably didn’t expect that not only would Budweiser would still exist 140 years later, but that, (in 2012) over 100 million cases of Budweiser would be sold worldwide, resulting in total sales reaching just past two billion dollars. Moreover, Budweiser would be just one of sixteen different brands owned by AB InBev worth over a billion dollars.
The company started by these German immigrants did not become what it is today by accident. Adolphus Busch was the first American brewer to implement pasteurization to his brewing process. This, combined with the then-new artificial refrigeration technology, allowed the ambitious brewers to sell their beer on a national, macro level. Budweiser was the first American beer to carry this characteristic.
As Americans, we often forget that Anheuser-Busch is not truly synonymous with AB InBev. In fact, AB InBev stems from the merging of three macro brewers: Anheuser-Busch, Interbrew (from Belgium), and AmBev (from Brazil).
AmBev’s history contrasts sharply with Anheuser-Busch’s. Formed in the late 1990s as a result of the merging of two of the oldest Brazilian brewers, AmBev expanded aggressively to partner with PepsiCo, Lipton Iced Tea, and Gatorade. Meanwhile, Interbrew formed in 1988 following (unsurprisingly) the merging of Piedboeuf and Brouwerij Artois (of Stella Artois fame). Interbrew would merge with AmBev in 2004, creating InBev, sporting a hulking 13% global market share.
In 2008, InBev and Anheuser-Busch merged, creating AB InBev as we know it today. AB InBev not only boasts a 25% global market share in the beer industry, but is also one of the top five consumer goods companies in the entire world.
However, it seems the merging may not be done. AB InBev stands posed ready to merge with SAB Miller in order to gain wider access to the burgeoning African markets. The $108 billion dollar deal has begun the extensive paperwork process in order to meet all regulatory and anti-trust concerns. This deal would not only increase AB InBev’s already large global market share, but position it to grow extensively in the coming years as well.
This potential merger leaves consumers with many questions. How will this affect beer prices? How will the other macro brewers respond to this? Will recipes change, affecting quality? Will availability change? Will new factories open while old ones close, affecting freshness in some regions? Perhaps only time will tell.