Big brewers searching for a brand old time, says analyst

By Neil Merrett

- Last updated on GMT

Related tags Brand management Trademark Brand

As speculation mounts over the future of US brewer Anheuser-Busch
amidst rumours of a possible takeover bid from rival InBev, it is
not the brewer, but the brands that are expected to drive
consolidation and growth in the market.

Graham Page, a beer-industry expert for analyst group AC Nielsen, told that major deals such as a potential move for the US brewer and the recent purchase of Scottish & Newcastle reflected the changing culture of global beer production. Page says that it is reasonable to expect further consolidation as companies clamber to claim the most prominent beer labels to boost their own market share in both emerging and established market places. Retail pressures ​ With the decline of the larger vertically-integrated brewers that produce and then sell their products at their own bars and pubs, major retailers like supermarket and off-license chains now dominate beer sales, Page said. This has led to the industry having to focus on pushing their bigger name beers and lagers onto the market. Taking the UK market as an example, Page said that brewers were moving to offload tertiary brands, or produce them at other breweries under license to focus on the key labels by which they are known as a result. "These days, brewers live or die on brand strength,"​ he stated. "The capacity [for beer makers] to establish themselves must therefore be made through acquisitions or in some cases through licensed brewing by other companies." Emerging markets​ Beer sales in the markets of the Western world are increasingly being seen as stagnant with little long-term growth expected by many in the industry, Page said. Any potential move by InBev for Anheuser-Busch would therefore grant the brewer two of the leading beer names in both the mature and established US and emerging Chinese markets for the products. These include the group's flagship Budweiser brand in the US and its Harbinrange inChina. ​Markets such as China, India and Russia offer significant potential for both established and up and coming beer brands to grow, according to Page. "The cheque books of these big brewers are being specifically targeted at these markets to launch and acquire brands,"​ he stated. Harbina good time ​ This has been particularly true for Anheuser-Busch, a company predominantly known for focusing on its domestic US operations. Last year, Y R Cheng, the brewer's managing director for China, told sister publication that the country has become a highly significant market for the group's global operations. Although the race in China to build a truly national beer brand continues, regardless of the company's future, Cheng was confident that Anheuser-Busch is in a strong position to finish first. "WhileChinaremains a challenging market, we believe Anheuser-Busch has the right combination of product quality and taste, brand positioning, and long-term commitment to continue our success,"​ he added.

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