InNovate with InBev: Merger Talking Points

m234ali    October 20, 2015

Organization Name: Anheuser Busch InBev

Industry: Beer & Beverage

Sources: Female of VP talks brand leading, InBev – Bringing People Together for a Better World, Merger of Beer Giants Anheuser-Busch InBev and SABMiller Faces Obstacles


Anheuser Busch Inbev SA (ADR), SABMiller Acquisition Deal To Herald Shift In Beer Industry

Company: Anheuser-Busch InBev

Say what? That’s right: Beer nation witnesses a gigantic change in the landscape of the industry.  Almost through to completion of the third-largest merger in the history of the world, AB InBev and SABMiller will earn half the beer beverage industry’s profits and sell one in three pints worldwide.  It’s clear that the road to the merger has been anything but uncomplicated  (volleys of bids, dealing with the press and numerous back and forth “private” talks), but settling on the price could be considered the easiest task.  Operating SABMiller means the balance and integration of more markets (Africa), making tough decisions about SABMiller’s stake in MillerCoors (America) and CR Snow (China) and, of course, defining a cost structure of the new giant.

Taking on SABMiller begs numerous questions about the future of the Beer company and the industry as a whole.  Without doubt, the biggest question surrounds an on-going issue that is, well, brewing, for major beer brands: How to respond to the advance of ‘craft’ brewers.  The follow up question is naturally one of strategy: how to deal with the struggle to retain America’s beer market share.  While the spotlight remains on the acquisition of the last few months, keen Beerthusiasts will notice that AB InBev’s share of the beer market has sunk from 50% to 45% over the past five years.  How will AB InBev make this merger work while staying competitive in the multi-million dollar beverages industry?  This blog will examine the nature of one solution InBev should pay attention to: co-creation using social media tools available.

Whose done it before?

When we take a look at how different organizations are leveraging social media tools towards product development, the examples are as colourful as they are plentiful: Ford took to social media to help identify 100 top bloggers to give them a Ford Fiesta for six months so they could blog their experience, barring no negative or positive comments.  The incredibly well respected and supported website Kickstarter gives everybody the chance to garner feedback towards their art and product, giving a chance for people to display their talents and be rewarded through funding options.  Another example is Microsoft who used the ‘co-creation’ method to develop ad formats, focusing on the heart of the innovation process by directly involving customers through the use of applications and other technology. In all cases, the leverage of social media into consumer insights has helped to re-define a firm’s new products and services.

Con-nect and Pro-ject

A company with a strong record for prioritizing consumer interests, there is no doubt that InBev reigns supreme in managing brand health. Social media for it’s part has become an integral solution for InBev to build on it’s “connection strategy” that focuses on the consumer in the most efficient, effective and relevant manner – mainly through traditional, social interactions such as the sponsorship of live events (2006 Fifa World Cup or the Beijing Olympics).  Of course, InBev hasbud3 utilized crowdsource techniques in the past to drive brand loyalty and lower product development risk. Known as Budweiser’s Project 12 Beer that appeared at numerous in-person events including music festivals in 2012, the informal yet priceless consultations that accumulated through sampling and customer feedback opportunities helped InBev narrow down to a concoction of a golden amber lager called Black Crown that was put on the shelves in 2013.


Product innovation at InBev is now headed by Valerie Toothman, the new Vice President of Innovation.  Toothman doesn’t beat around the busch — “It’s probably no shock to anyone that beer is under attack, both within beer itself,” she remarks, “and then the wine and spirits industry is gaining some momentum with consumers.”

Every successful company has employed creative, out of the box thinkers like Toothman to bring their teams to another level of greatness using tools they have around them.  The example of Oculto is another one in which voice of the consumer played an integral part in the development of a concept.  The successful European launch of a rum-flavoured premium beer called Cubanisto inspired the idea of Oculto.  Of course, the Cubanisto name did not (and could not) work in the US, but the success of the campaign’s use of packaging, brand experience and graphics as exposed by consumer comments online lent determination to the team to approach the Oculto project with a different perspective.

Oculto needed to be brought to the market quickly.  The quickest way of getting feedback without actively seeking it, remarkably, was social media — Anheusuer Busch  ‘I tried it because of the bottle, but I love the drink.’  What InBev noticed was that it’s efforts in trying to appeal to the consumer brought on new insight into how to get to the consumer– packaging was absolutely driving trial and the lesson was that the best lessons came from the consumer!  Oculto further demonstrates that collaboration  with the consumer in one aspect of the business–or one brand in this case–will prove valuable across cultures.  This lesson seems fairly straightforward but Anheseur Busch recognized it’s value in bringing it to the market in the quickest way, lending to the belief that social media was indeed the quickest way to get to the market.

Lessons for Others

The Anhesuer Busch InBev example presents many lessons for emerging beer brands, or the craft beer brands that are determined to become household names. One of the most important steps to success is to listen to your existing customer base for feedback on your current line of products and for the introduction of future products and incorporate that into your larger brand strategy.  Here’s InBev’s attitude towards customer co-creation and innovation depicted directly on their website:

The highlight of a brand experience for InBev is the absolute key to their success.  The majority of their collaboration with consumers focuses around this concept for innovation.  Hence the second most important lesson that one may take away from this example is that providing user experiences that allow participation are often the most effective methods of reinforcing brand experience.  The example of Project 12 Beers is an excellent example of crowdsource that resonates through the minds of consumers well after the experience.

To follow what’s in store for this merger and brand experience and innovation, check back on this Blog!

Submitted by: Moneeza Ali, University of Waterloo

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