UK: AB InBev unveils plans to grow its UK business over the next 12 months

AB InBev has unveiled its plans to grow the business over the next 12 months, with craft brands, new partnerships and Budweiser’s World Cup sponsorship playing a key role, Marketing Week reported on September 11.

The business is currently the world’s biggest brewer after merging with SABMiller last year, making approximately £42 bln in revenue more than its rival Heineken in 2016.

However, this isn’t the case in the UK. Heineken has recently looked to increase its dominance by buying Punch Taverns, thereby becoming the country’s third-largest pub operator. Nevertheless, AB InBev has set out ambitious plans to change this, and wants volume sales to grow by 9% over the coming year. One way it hopes to achieve this is by “leaning in to the World Cup”, with Budweiser as the official sponsor of the FIFA 2018 World Cup.

“We’re starting to build momentum. We’re proud that year to date we’re the number two brewer in UK after overtaking Molson Coors in 2016. If we allow the business to move at the pace that we’re moving in now, we will be the number one brewer by 2019. [We want to] increase our performance and lean into the World Cup year and increase volume sales by 9%,” Jason Warner, president for Northern Europe, says.

“The number one brewer currently in the UK is Heineken. One of the reasons for that is the balance towards our business. If you look at the retail business, we’re number one. The opportunity for growth is largely coming from the on-trade. Heineken has an estate of 2,950 pubs, and in my mind, they have gone from a brewer to publican. We’re not interested in doing that, we see ourselves as a brewer.”

The opportunity for growth is largely coming from the on-trade. Heineken has an estate of 2,950 pubs, and in my mind, they have gone from a brewer to publican. We’re not interested in doing that, we see ourselves as a brewer.

Warner told Marketing Week that it has learnt valuable lessons on agility from the UEFA Euro 2016 cup. For example, when Wales managed to make it to the semi-finals, Budweiser decided to offer everyone in Wales a free beer. Warner says the brand managed to turn around this stunt in three days.

“We love to place bets and do things outside of the box. We can work with real agility when moments [like that] present itself. So with the World Cup, we want to create epic moments, and do things like buy everyone in the pub a free beer. We want to delight people in unexpected ways,” he said.

Unsurprisingly, craft is playing an increasingly important role to the brewer. Unlike mainstream lager, which sales are largely flat, the craft sector is growing fast – and as consumers become more discerning in their choices and are willing to pay more of a premium for high quality beer, AB InBev is keen to capitalise on this trend.

In recent years it has set out on an aggressive course to acquire smaller craft brands. It bought Goose Island in 2011, and has since snapped up another 11 craft brewers, ranging from Blue Point in New York to Camden Town Brewery in the UK.

Warner said it is interested in teaming up with more craft brewers, but it is also looking at more unusual partnerships, such as with Vice.

Last year the media company announced it was building a brand “from the ground up” by launching craft beer ‘Old Blue Last’. It is currently only available in New York but is set to be launched in the UK this year.

That doesn’t mean, however, that AB InBev is forgetting about its own portfolio of brands, and claims they too have craft elements worth shouting about.

“Some of our brands are over 600 years old, like Stella Artois. We also have specialty brands like Leffe, which is still brewed by monks. That craft and artisanal feel can touch all aspects of our portfolio,” he said.

Warner also revealed its plans for Camden Town Brewery, which it acquired in 2015 and launched its first TV ad last week. He described the brand “as a bit of jewel”, and plans to make it a “super premium beer brand” alongside other household brands such as Stella Artois.

“[We want it to move] from its craft roots to play a role alongside our super premium beer portfolio. It is starting to take a dual path – it is still a craft brand, but we are also introducing new communications as it builds brand credentials not only in London but across the UK. The craft market in the UK is only 1%, so very small. There is lots of growth to be had,” he concluded.

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