Beer

Meet the Stranger You Already Know

By Greg Kitsock
Wednesday, July 2, 2008

The name InBev certainly doesn't conjure up images of barroom buddies hoisting foamy steins to celebrate a promotion or softball victory. Indeed, it's hard to imagine a more soulless corporate moniker.

Most Americans, if they've heard of InBev at all, probably first read about the Belgian company when it offered to buy Anheuser-Busch for $46 billion in an unsolicited takeover bid that has been adamantly opposed by August Busch IV, the company's chief executive, and by Missouri politicians who fear the loss of an American icon.

InBev, despite its lack of name recognition, is the planet's second-largest beermaker; only SABMiller sells more suds. Headquartered in Leuven, InBev was formed in 2004 when Belgium's Interbrew, already an ambitious collector of breweries, and Brazil's AmBev hitched their corporate fortunes together. Chances are, even the most casual beer drinker has sampled some of the more than 200 brands that InBev markets.

Ever clink bottles of Beck's? The leading German import is part of InBev's stable. How about Bass, the quintessential British pale ale? Another InBev brand. Maybe you sipped Canada's Labatt Blue while watching the NHL playoffs? Then you're an InBev customer. The Dutch lager Oranjeboom? The hoppy Czech pilsner Staropramen? Ditto and ditto.

InBev also controls Spaten, a Munich brewery respected among beer aficionados for such brands as Optimator, a malty, warming doppelbock, and Franziskaner Hefe-Weisse, an unfiltered German-style wheat beer.

Operating 123 plants on four continents, InBev isn't immediately associated with a single label the way Diageo is with Guinness or Anheuser-Busch with Budweiser. If the company has a flagship brand, it is Stella Artois, a crisp, quaffable pilsner that has piggybacked onto the Belgian beer craze in the United States without having any specific Belgian character.

More interesting are the tangy, honeyish Leffe Blonde and the gentle, chocolaty Leffe Brune, a pair of strong ales in the Belgian abbey style. But the jewel in the crown of InBev's specialty portfolio is Hoegaarden Witbier. The village of Hoegaarden in Flanders was once renowned for wit beer, an unfiltered, cloudy ale brewed with unmalted wheat, bitter orange peel and coriander. The style had nearly died out when an enterprising milkman named Pierre Celis resuscitated it in his Brouwerij de Kluis (literally, "cloister brewery"). Celis sold out to Interbrew, InBev's forerunner, in the late 1980s, and some longtime drinkers complain that the beer has lost complexity over the years. But it remains a classic of the style, with a delicate orange flavor and a gentle nip of coriander in the finish, with some citrusy notes from the wheat.

InBev infuriated its customer base in 2005 by threatening to shutter de Kluis, now called the Hoegaarden brewery, and make the witbier at a larger, more efficient plant in Jupille, Belgium. But the brewers there were unable to replicate the beer successfully, and the Hoegaarden Brewery continues to operate.

InBev can be unsentimental in disposing of its assets. In 2006, the company decided to unload the Latrobe Brewing Co. and its Rolling Rock brand, a pale Pennsylvania lager famous for its embossed green bottles and an enigmatic "33" on the packaging. Anheuser-Busch bought the Rolling Rock name but had no use for the physical plant. InBev sold the brewery to a Wisconsin firm, City Brewery, which uses the tanks to contract-brew Samuel Adams. Rolling Rock is now brewed at the Budweiser plant in Newark.

InBev's reputation for cost-cutting has to worry anyone who makes a living via Anheuser-Busch. And perhaps it should concern consumers, too.

InBev has proclaimed that if it acquires our nation's largest brewer, it will keep all 12 Anheuser-Busch branch plants running and will base its North American headquarters in St. Louis. But what about Anheuser-Busch's growing number of specialty brands, which include the gluten-free, sorghum-based Redbridge, the blueberry-flavored lager Wild Blue and the forthcoming Budweiser American Ale? Would the expanded company pare down? Would a combined operation (BudBev? Inweiser?) continue to co-sponsor the annual Great American Beer Festival in Denver, a major showcase for microbrews? Would it press on with "Here's to Beer," a non-branded marketing campaign to boost the American brewing industry in the face of stiff competition from wine and spirits?

Would InBev, which is taking on considerable debt to finance this deal, seek to sell Anheuser-Busch's minority interest in such breweries as Redhook, Widmer and Old Dominion?

"For these details, it is a little bit too soon in the process," said Marianne Amssoms, InBev's vice president for global external communications.

Eric Shepard, executive editor of Beer Marketer's Insights, said there are no guarantees. "Basically, they do zero-base budgeting," he said. "Everything will come under review. They want every dollar spent to connect with the consumer and build brand value."

Paul Gatza, director of the Colorado-based Brewers Association, said a larger player would be able to dominate the market even more, grabbing taps and shelf space from the little guys. "I see no real upside for craft brewers," he said.

On the other hand, Gatza said his member breweries are not too concerned, at least not yet. "If InBev sees craft brands can be done profitably, they'll support craft beer getting into the marketplace," he said.

Greg Kitsock's column appears every other week. He can be reached at food@washpost.com.


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