Anheuser-Busch Aaron Rees, Nick Cummings and Kyle Wray

Anheuser-Busch Aaron Rees, Nick Cummings and Kyle Wray

Company History Founded in 1852 in St. Louis, Missouri German settled in Midwest due to political upheavals Brewing became a principal industry due to migration to the area Introduction of the “lager” pasteurization in the 1870’s/refrigerated rail cars Survived Prohibition in the 1920’s through diversification Under new leadership in the 50’s and 60’s, Anheuser-Busch began experiencing growth from increased production, family entertainment, industrial products, real estate, and can manufacturing.

Company Description Operate 12 breweries within the U.S. within these breweries, some of their popular product lines are the Budweiser family, Bud Light family, Michelob Ultra, Shock Top, and Stella Artois Purchased by InBev in 2008 $52 billion deal production of +200 beers sold internationally/regionally Employees- 118,000 in 23 countries Control around 50% of the U.S. beer market

Macro Industry Trends Beverage Industry > Alcoholic Beverage Industry > Beer Industry Social calorie consciousness, environmental impacts, and the rise of craft beer consumer shift to luxury alcohol purchases (wine/liquor) Technological improvements in canning, packaging, and production Economic during recessions, demand for beer doesn’t decrease but consumption is altered Political highly regulated advertising labeling excise tax

Micro Industry Trends High barriers to entry high capital to establish a brewery threat of large companies Brand Loyalty decline of high calorie beers importance of diversity--higher alc. content to compete with beer substitutes Rivalry increasing competition from imports highly concentrated industry Substitutes Growth in: premixed drinks malt beverages alternative non-alcoholic beverages

Strengths ●Value Chain ○Busch Agricultural Resources, Inc. ○Anheuser-Busch Packaging Group (ABPG) ○Recycling Centers ○Glass Centers ○Owns its own distribution centers/wholesalers ○12 breweries in the US to maximize freshness and minimize travel ●Large brand recognition and advertising efforts ○FIFA ○The Super Bowl ●Multiple geographies and market segments ●Product innovation

Weaknesses Are entrenched in in lighter style beers (mostly lagers) Low perceived quality of beer Anheuser Busch’s poor environmental perception Placed 40th in Toxic 100 for US corporations Involved in a few controversies “Up for whatever” Spykes

Opportunities ●Demand in Mexico and Asia ●Craft Beer demand ○Buying craft breweries ■10 Barrel Brewing Co. of Bend, Oregon ■ Blue Point Brewing Company of Long Island, New York ■Shock Top

Threats Negative health attributes associated with beer Anheuser Busch could see and impact of their recent environmental standings and controversies. Advertising regulations would have a large impact on Anheuser Busch’s large advertising efforts. Mostly in the EU

Business Level Strategy Complicated - holding company Best Cost - Corona, Stella Artois and Budweiser Broad Differentiation - Becks, Leffe and Hoegaarden Local champions strategy = Focused Differentiation Local Champions- Bud light, Skol, Kirin etc.

Evaluation of Current Strategy Combination of the 3 business level strategies is to increase market share Achieved through: a.Internal investment in their existing brands b.Acquisition of competitors Proposed acquisition of SAB Miller Effectiveness? Don’t Rely on Industry Trends as much $43 B in Revenue and $8 B in earnings 15 $14 B in Rev. and $2.08 B in earnings 03

Thank You & Any Questions

Financial Ratios for Dec ‘14 Current Ratio Quick Ratio Return on Stockholders’ Equity Inventory Turnover Debt to total Assets

Company History Founded in 1852 in St. Louis, Missouri German settled in Midwest due to political upheavals Brewing became a principal industry due to migration to the area Introduction of the “lager” pasteurization in the 1870’s/refrigerated rail cars Survived Prohibition in the 1920’s through diversification Under new leadership in the 50’s and 60’s, Anheuser-Busch began experiencing growth from increased production, family entertainment, industrial products, real estate, and can manufacturing.

Company Description Operate 12 breweries within the U.S. within these breweries, some of their popular product lines are the Budweiser family, Bud Light family, Michelob Ultra, Shock Top, and Stella Artois Purchased by InBev in 2008 $52 billion deal production of +200 beers sold internationally/regionally Employees- 118,000 in 23 countries Control around 50% of the U.S. beer market

Macro Industry Trends Beverage Industry > Alcoholic Beverage Industry > Beer Industry Social calorie consciousness, environmental impacts, and the rise of craft beer consumer shift to luxury alcohol purchases (wine/liquor) Technological improvements in canning, packaging, and production Economic during recessions, demand for beer doesn’t decrease but consumption is altered Political highly regulated advertising labeling excise tax

Micro Industry Trends High barriers to entry high capital to establish a brewery threat of large companies Brand Loyalty decline of high calorie beers importance of diversity--higher alc. content to compete with beer substitutes Rivalry increasing competition from imports highly concentrated industry Substitutes Growth in: premixed drinks malt beverages alternative non-alcoholic beverages

Strengths ●Value Chain ○Busch Agricultural Resources, Inc. ○Anheuser-Busch Packaging Group (ABPG) ○Recycling Centers ○Glass Centers ○Owns its own distribution centers/wholesalers ○12 breweries in the US to maximize freshness and minimize travel ●Large brand recognition and advertising efforts ○FIFA ○The Super Bowl ●Multiple geographies and market segments ●Product innovation

Weaknesses Are entrenched in in lighter style beers (mostly lagers) Low perceived quality of beer Anheuser Busch’s poor environmental perception Placed 40th in Toxic 100 for US corporations Involved in a few controversies “Up for whatever” Spykes

Opportunities ●Demand in Mexico and Asia ●Craft Beer demand ○Buying craft breweries ■10 Barrel Brewing Co. of Bend, Oregon ■ Blue Point Brewing Company of Long Island, New York ■Shock Top

Threats Negative health attributes associated with beer Anheuser Busch could see and impact of their recent environmental standings and controversies. Advertising regulations would have a large impact on Anheuser Busch’s large advertising efforts. Mostly in the EU

Business Level Strategy Complicated - holding company Best Cost - Corona, Stella Artois and Budweiser Broad Differentiation - Becks, Leffe and Hoegaarden Local champions strategy = Focused Differentiation Local Champions- Bud light, Skol, Kirin etc.

Evaluation of Current Strategy Combination of the 3 business level strategies is to increase market share Achieved through: a.Internal investment in their existing brands b.Acquisition of competitors Proposed acquisition of SAB Miller Effectiveness? Don’t Rely on Industry Trends as much $43 B in Revenue and $8 B in earnings 15 $14 B in Rev. and $2.08 B in earnings 03

Thank You & Any Questions

Financial Ratios for Dec ‘14 Current Ratio Quick Ratio Return on Stockholders’ Equity Inventory Turnover Debt to total Assets