|Photo illustration by Marc Simonl|
"It could be a disaster," said an executive at one of A-B's agencies. "It's all-American above all else -- the Clydesdales, all the imagery. It's an enormous challenge" if the brand becomes foreign-owned. And there's a lot at stake: In 2007, $8.5 billion of A-B's $16.7 billion in total global revenue came from sales of Bud-family brands in the U.S.
The situation is made even more ironic by the fact that A-B has in the past been willing to play the patriotism card against competitors. Earlier this decade, after Miller was acquired by South African Breweries and Coors merged with Canada-based Molson, A-B railed against their owners as "foreign interests" with a nativist strategy that would make Lou Dobbs blush.
On its websites and in point-of-sale materials, A-B ripped Miller and Coors for sending profits abroad and closing breweries here. "With over 80% of its employees outside of the United States, it's hard to ignore a simple question: Does Miller reflect the American spirit?" said Budweiser's official website at the time.
One Bud point-of-sale piece from that era declared it was "American owned. Brewed here. Born here."
Bud also has frequently played up its American allegiance in creative. A 2005 Super Bowl spot showed American soldiers receiving a standing ovation at an airport, and a moving ad in 2002's big game showed the Clydesdales bowing to the victims of the Sept. 11 terrorist attacks.
And then there are those long-running, positively Rockwellian spots showing the Clydesdales in full regalia trotting down Main Street, U.S.A., as well as Bud's new "Great American Lager" tagline.
"If a deal happens, there will be a wholesale change in the marketing," said veteran beverage-marketing consultant Tom Pirko. "The 'great American' messaging just isn't credible [under foreign ownership]."
A-B declined to comment.
Less credible halo
On one level, having to deviate from a brand strategy that has seen sales decline steadily for three decades shouldn't be too calamitous. But Bud ads tend to have a halo effect that positively affects A-B's other brands, and if the messages lose credibility, there could be negative consequences for brands such as Bud Light, Busch and Michelob.
Those consequences could be particularly pronounced in the event of a hostile takeover that likely would be portrayed in the media as a foreign company prying an American icon away from a celebrated American family. "The politics could be rough," said an A-B agency executive.
None of that is likely to dissuade InBev. The brewer, analysts said, is not only interested in a strong U.S. position but also in being able to roll out A-B's brands around the world, where the political concerns of U.S. consumers are moot.
Regardless, if InBev gets control of A-B, it will pit two extremely different marketing cultures against each other. A-B historically has been a relatively free-spending marketer willing to take big bets on a hunch, while InBev's culture is defined by militant cost controls and aggressive moves.
"InBev's overriding cultural mantra is one of cost efficiencies," wrote UBS's Kaumil Gajrawala in a recent report. "While A-B has the highest margins of its domestic counterparts, we believe it was driven by a culture of calculated marketing and investing which led to a scale advantage."
Mr. Pirko, who's worked for InBev, said while the company can be "pretty brutal" at cutting expenses, it's not likely to crush an ad budget that's crucial to keeping mature brands afloat.
"I don't think they can afford to slash it, and I think they know that," he said. "But what I do think they'll try to do is find a way to spend it better."
InBev: Aggressive marketer with a diverse portfolioRIO DE JANEIRO, Brazil (AdAge.com) -- InBev might not spend as flagrantly as Anheuser-Busch, but with 70% of Brazil's beverage market, it is known as an aggressive and innovative marketer. The company is in trouble in Brazil for making beer bottles slightly bigger than the standard size so that the returnable glass bottles can only be reused for InBev beer brands. A Brazilian government agency is threatening the company with fines for abuse of economic power unless the company switches back to standard, interchangeable bottles.
The product of a 1999 merger between two leading local beer and soft-drink marketers, Antarctica and Brahma, InBev works with Brazil's top creative ad agencies, DDB Brasil and F/Nazca Saatchi & Saatchi, both Sao Paulo. One of Brazil's biggest advertisers, the company owns the No. 1 beer, Skol, as well as other top beer brands such as Brahma, Bohemia and Antarctica. Its soft drink, Guaraná Antarctica, is second only to Coca-Cola. It also distributes Pepsi-Cola soft drinks in Brazil.
InBev has aggressive and memorable marketing and knows how to develop coordinated strategies for a diverse product portfolio, said a local Brazilian marketing expert. And the company is not afraid to take risks, he said.
Despite the merger with Belgium's Interbrew, the company remains very Brazilian. Its Brahma beer is a big sponsor of Carnaval, and Skol beer backs the Skol Beats electronic music festival. The company's advertising is full of local idioms and popular culture, like defining Skol as the beer "that goes down round," playing on a slang phrase referring to anything square as not tasting good.