Prajay Patel Sunil Magesh Sagar Parikh

Opening Discussion
HOW MANY OF YOU

DO NOT
Drink Beer?

Which One?

Why ?

Global Branding of Stella Artois

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Ordre du jour/ Agenda

Company Background Key Issues
SWOT

Marketing Dimensions Strategic analysis

SWOT Porters 5 Forces Strategic Filters

Competitive Landscape Recommendations & Future Outlook

Total Slides: 50

InterBrews Background
1366 Den Hoorn brewery begins brewing 1987 Creation of InterBrew Merger of Artois and Piedboeuf breweries in Belgium (Increasing international pressure in the brewery sector (BCG, 1989) 1920 Stella Artois introduced in Belgium as a Festive Beer 1991 First foreign acquisition Hungary: Borsodi brewery (Decreasing consumption in the Belgian market ) 1995 Entered North America Canada: Labatt Brewing Co. 1999 Opened up the Russian market Joint-venture with Sun InterBrew

2000 Initial Public Offering Established InBev in the U.K. Acquisition of Whitbread and Bass

InterBrews Background
2001 Entered Germany Beck & Co. and Diebels acquisitions 2002 Built a beachhead in China Acquired stakes in KK and Zhujiang breweries 2003 Strengthening positions in China (Lion Group breweries) and Germany (Spaten) 2004 Combining InterBrew with AmBev to establish InBev 2006 InBev acquires Fujian Sedrin Brewery in China, becoming one of the largest brewers in China. 2008 Combination with Anheuser Busch , creating AB-Inbev

Inter Brews corporate strategy

Global presence of Inter Brew (Before)

Global presence of Inter Brew (After)

Questions cls/Key Issues

Global Game Declining domestic and mature markets Need for a Flagship global brand

Positioning Stella Artois as a sophisticated lager beer

 Growing Market trend of premium beer Capital Resources Heritage of beers.

Declining domestic market Absence of globally recognized brand

Increase brand recognition Few global player To enter into premium segment Acquisitions and Merger

Unconsolidated Beer industry Loyalty towards local beer Increasing preference for wine/spirits

Questions cls/Key Issues

Global Game
Untapped world beer market before 90s.
100 80 60

40
20 0 Total Market Potential Top 4

Top 4 Potential Total Market

Questions cls/Key Issues

Untapped world beer market
Why ?
Large initial capital outlay Markets with unstable economies

Local tastes differed

Questions cls/Key Issues

Global Game Declining domestic and mature markets Need for a Flagship global brand

Positioning Stella Artois as a sophisticated lager beer

Questions cls/Key Issues

Declining domestic and mature markets
Mature Markets
180 160 140 120 100 80 60 40 20 0 N.A. W. E.U. Aus N.Z. Czech

LPC

LPC

Questions cls/Key Issues

Declining domestic and mature markets
Growth Markets
50 40 30 20 10 0 LPC

LPC

Questions cls/Key Issues

Reasons behind declining domestic and mature markets
Inconsistent sales and marketing support Tight social policy Emergence of wine culture

Questions cls/Key Issues

Global Game Declining domestic and mature markets Need for a Flagship global brand

Positioning Stella Artois as a sophisticated lager beer

Questions cls/Key Issues

Need for a Flagship global brand
Why?
Increase in market share Opportunity to get into niche / premium segment Availability of the product internationally Creation of a global brand image

Inter Brews Dilemma Choosing the right Global Brand

Choosing the right Global Brand

% Sales as of 1990

Canadian USA UK Other

Choosing the right Global Brand

% Sales as of 1990
Belgium Other UK France Italy Croatia

Hungary
Romania AUS / NZ

Questions cls/Key Issues

Global Game Declining domestic and mature markets Need for a Flagship global brand

Positioning Stella Artois as a sophisticated lager beer

Questions cls/Key Issues

Positioning Stellaas a premium lager beer.
Stellas Point of Difference

Ordinary Beer

Positioning Stella Artois

9-Step pouring Ritual

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World Draught Masters

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Questions cls/Key Issues

Global Game Declining domestic and mature markets

Need for a Flagship global brand

Positioning Stella Artois as a sophisticated lager beer

 Strong brand portfolio leads to revenue growth Large scale of operations increases Competitiveness Diversified operations reduce risk Shift from decentralised to centralized management.
Deleveraging program to repay debts Establishment of a new office to enhance operational focus Booming beer industry in China Positive outlook for Global Spirit market

Weak performance of W. Eu market leads to loss of market share

Focus towards Jupiler in Belgium.

Increased labour costs likely to effect margins Sluggish beer consumption in the US and W. EU Stringent advertising regulations in many countries

Key dimensions of marketing

Product Marketing Brand Marketing Supply Chain Management style Segment Marketing

Potential Entrants
High ratio of fixed vs. variable costs Reduced supply base means higher dependence

Supplier`s Power

Buyers Power

Loyalty to Local brands

Competetive Rivalry
Heinieken, Foster`s, Budweiser, Carlsberg

Threat of Substitutes
Wines/Spirits

The 4 Strategic Filters

1. Market should have long-term volume potential 2. Break even should be achieved within 3 years 3. Committed local partner for quality and distribution 4. Determination that Success in chosen market will lead to leverage in local & regional market

Key Dimensions of Marketing

Product Marketing Brand Marketing Supply Chain Management style Segment Marketing

Global presence of Inter Brew (After)

Competitive Landscape
Positioning of a Flagship Brand

10%

20%

Market Penetration Strategy

SEEDING approach.

Premium Beer Perception

Concentrated only on the Top 20 Cities.
Belgian Beer Cafs
New York Auckland China Hong Kong London
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What did this achieve?

Reassuringly Expensive: It`s worth..!

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InBevs Strong Track Record of Growth

1992
Brewer
AnheuserBusch Heineken
Miller Fosters

2005
Rank 0 Volume (Mhl) Brewer 50 100 150
InBev SABMiller Anheuser-Busch

Rank 0

Volume (Mhl) 50 150 100

200

250

1 2 3 4

1 2 3

Kirin
Brahma Coors Groupe BSN SAB Carlsberg

5
6 7 8 9 10
17

Heineken 4 Carlsberg

Scottish & Newcastle 6 Modelo BBH

7 8

Tsingtao 9 InterBrew Molson Coors 10

Source: AbInbev Impact / internal data

Future Outlook
Belgium in the next 3 years Expectations from Stella in the coming years Global success measurements Role of internet Sponsorship and promotion: 1? Or many?

Future Outlook
Belgium in the next 3 years
Re-position Stella Artois as a BELGIAN heritage beer. Ad campaigns involving an old man passing on the craft/art of pouring a Stella to his grand-son and re-igniting the aura behind Stella Try and compete against alternatives of beer such as Wine/Spirits in a creative way.

Future Outlook
Expectations from Stella in the coming years
Growth in Asian cities.
Organic growth.

Maintain position as premium brand Enter new markets through the Belgian Beer Caf concept.

Future Outlook
Global success measurements
Volumes sold Geographical reach Global Brand awareness Efficiencies in breweries to enhance margins.

Future Outlook
Role of internet
Fan Following Members area

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Members only area

Social Media Website Smartphone App
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La Socit Stella Artois

Future Outlook
Sponsorship and promotion
One Global advertisements?
Why?

Many regional advertisements?

Why?

And Finally

Drink Responsibly