Beverage Bites: News up to September 17, 2015

The reaction to AB InBev and SABMiller announcement: Beverage Bites special

By Rachel Arthur contact

- Last updated on GMT

Related tags: Ab inbev, Brewing, Coffee

The reaction to AB InBev and SABMiller announcement: Beverage Bites special
Yesterday AB InBev and SABMiller confirmed they are exploring a mega-brewer tie-up, which would create a force controlling an incredible 30% of global beer volumes. So what would this mean for the industry - and what are the challenges it could face? Here's your quick guide to the analysis and commentary surrounding the potential deal. 

"One beer maker to rule them all"

Prompted to respond to considerable speculation about such a deal, SABMiller yesterday confirmed AB InBev intends to make a proposal to acquire the company,​ but no such offer has yet been received. 

CNN Money says that, if the deal goes ahead, it would be the biggest merger in brewing history. Euromonitor data shows the new mega-brewer would own 18 of the world’s 40 most popular beer brands​ (by volume). These brands include Bud Light, Budweiser, Skol, Harbin, Brahma, Corona Extra, Miller Light, Antarctica, Busch and Sedrin. 

Rolling through the (long) list of beers the two companies would control, Fortune eyes up the creation of “one beer maker to rule them all.”

Meanwhile, The Wall Street Journal observes that this would see the two companies control 30% of global beer volumes.

The New York Times says "a deal would crown years of global consolidation of the brewing industry"​ and lead to "a climactic round of regional disposals, spins and amalgamations."​ It adds that, in the wake of antitrust concerns, mandatory disposals might bring opportunities​ for Heineken, Carlsberg and Diageo. 

But Bloomberg observes that life could get tougher for rival beer companies​.“The merged entity would force competitors to become more efficient,”​ it says, observing the combined force would be bigger than Procter & Gamble Co. and Nestle in market value. 

Creating a “$245bn hyper profitable brewing empire”​ would put antitrust authorities on high alert​,​ warns The Washington Post. 

Again referencing “an intense antitrust review around the world,”​ Crain’s Chicago Business asks if the tie-up would lead to the break-up of MillerCoors​ ​(the Chicago based joint venture between SABMiller and MolsonCoors). 

Buying SABMiller would strengthen AB InBev's hold in growing economies in Africa and Asia​,​ says NBC news. 

But the last word probably comes from The Grocer, which observes that the bid has a long way to go before becoming reality. “InBev’s acquisition of Anheuser-Busch took five months from initial bid to completion,”​ it says, referring to the 2008 deal. “This potential tie-up could make that deal look like a whirlwind marriage.​”

And in other news this week...

Jørn P. Jensen, deputy CEO and CFO of the Carlsberg Group, will depart the company by the end of the month.

Announcing the news yesterday, both Carlsberg and Jensen say it is ‘the right time for a change for all parties.’

Jensen, who has been with the company for 15 years, has agreed to make himself available over the coming months in order to finish existing projects, and hand over to a new group CFO.

Califia Farms welcomes $50m innovation investment

Califia Farms will use a $50m investment to boost further innovations in plant-based beverages and foods.

New York based private equity firm Stripes Group has announced a $50m minority investment in the company. The money will also help Califia develop production and distribution capabilities, R&D, new hires, sales and marketing. 

Based in Los Angeles, Califia Farms champions itself as one of the fastest growing natural beverage companies in the US, providing premium almondmilks, cold brew coffee, and citrus juice. 

Consumer attention to plant-based diets has expanded far beyond the reach of vegan shoppers, says Califia. 

Dan Marriott and Karen Kenworthy of Stripes Group will join the Califia Farms Board of Directors.

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Nescafe dumps traditional websites

Are websites no longer cool? Nescafe says it is abandoning its traditional website in favour of a Tumblr platform. The move aims to appeal to creative millennials, many of which access the site from smart phones and tablets. Traditional websites are too static for their kind of content, Nescafe told BeverageDaily.com.

The answer to successful marketing? Call your drink ‘disgusting’

An Australian vitamin drink is promoting itself as ‘disgusting’ as it hits the shelves in Selfridges, using a ‘frank and humorous’ Aussie approach it hopes will resonate well with the British. 

Vitamin Fix will be introduced into the store this month, with a blend of 12 vitamins and eight minerals in a 150ml shot. The drinks are already available in WH Smith transit stores. 

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