The Global Branding of Interbrew and Stella Artois
The Global Branding of Interbrew and Stella Artois

The Global Branding of Interbrew and Stella Artois

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  • Pages: 3 (1078 words)
  • Published: October 5, 2017
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The Global Branding of Interbrew and Stella Artois One of the largest brewers in the world, Interbrew grew rapidly in the 1990s from its home market in Belgium to a global presence in markets around the world. As this essay will demonstrate, Interbrew’s global strategy of consolidation and market penetration has been balanced between a respect for local autonomy and beer culture with efforts to adapt the flagship brand of Stella Artois to these cultures.The global beer industry is highly fragmented, with the four major brewers accounting for only 22 percent of the global beer trade; a number that is strikingly low in comparison to comparable numbers of 78 percent in the soft drink industry, 60 percent in the tobacco industry, and 44 percent in the liquor industry. This market context was the justification for Interbrew’s strategy of expanding into markets around the world through a series of acquisitions of brewers in both mature and growth markets (Beamish and Goerzen 3).

Within a span of four years, Interbrew spent US$2. 5 billion on purchases of brewers such as the Canadian Labatt; a purchase that earned Interbrew a minority stake in the second largest Mexican brewer which produced the Sol brand. In addition, Interbrew purchased breweries in identified markets for growth where per capita beer consumption was low in comparison to mature markets in North America and Western Europe. These growth markets include China, Russia and South Korea (Beamish and Goerzen 2).In general, Interbrew’s strategy for entry into foreign markets is one of consolidation; acquiring existing brands and breweries in local markets in which there is considerable long-te

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rm growth potential.

This strategy is often micro-focused to a city level – specifically in highly lucrative growth markets such as China – where Interbrew’s purchasing of breweries with popular local brands is seen as allowing giving it a base for future expansion. The one foreign acquisition that is surprising in this regard is its urchase of Labatt, given that Canada is seen as a mature market with low capacity for growth. While Labatt sales have confirmed this expectation in remaining largely static in Canada, its export market to the US has grown, as have sales of the Mexican brewer in which Labatt(Interbrew) has a significant stake. Thus, the apparently anomalous purchase of the Labatt brewer is not truly anomalous in that it follows the general Interbrew strategy given Labatt’s access to growth markets outside Canada.

Interbrew’s strategy for entry into foreign markets as an international brewer has thus been consistent: the company acquires brewers/brands in local markets that have been identified as offering significant potential for growth. There exist both advantages and disadvantages to this method. Interbrew has tended to adopt a highly decentralized approach to overall marketing policy, with each country being given considerable autonomy. This reflects, in part, a practical decision given that the local brewers in a growth market such as China would understand the market demands better than would an executive living in Brussels.This has proven to be a successful strategy, with sales increasing in almost every growth market Interbrew has entered through its acquisitions strategy (Beamish and Goerzen 8).

This

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strategy has had disadvantages in terms of supporting Interbrew’s campaign to market Stella Artois as its flagship brand, just as Anheuser-Busch has done with Budweiser. In effect, creating a centralized flagship brand for a company with a decentralized corporate strategy led to considerable conflict and reconsideration of the centralized strategy as a whole.As a result, Interbrew’s strategy of local market dominance led to a revision of the Stella Artois branding on a city-by-city level in select markets around the world. The acknowledgement of the importance of local culture has been a critical component of Interbrew’s accessing local markets.

As noted above, a critical aspect of Interbrew’s brand strategy has been “to identity certain brands, typically specialty brands, and to develop them on a regional basis across a group of markets” (Beamish and Goerzen 9).The creation of the Oland Speciality Beer Company within Labatt, for example, allowed Interbrew to increase sales of Alexander Keith’s brand and the John Labatt Classic Brand by playing upon the “richness, mystique and heritage of beer” in the Canadian market (Beamish and Goerzen 9). It is interesting to note, however, that this strategy was only successful in Canada. In Belgium Interbrew’s flagship brand Stella Artois has been suffering from declining sales for years due to the public perception of its as being “old-fashioned”.Thus, precisely the same quality has diametrically opposed market sale consequences in North America and Belgium given the nature of local culture. As noted above, a key element of Interbrew’s global strategy has been to acquire brewers and established brands in areas with significant growth potential, and then allow the company administrators in that country considerable autonomy in the marketing of their brands locally.

Thus, for example, Interbrew purchased two breweries in Nanjing, China, and through these purchases acquired their locally popular brands Yali and Jingling.This made Interbrew the dominant market player in this large Chinese city, with possibility to serve as a platform for expansion (Beamish and Goerzen 8). However, while respecting the business success of existing brands and local culture, Interbrew has also attempted to “sell” Belgium beer culture in a number of key local markets such as New York, Budapest, and Auckland through the licensing of the Belgium Beer Cafe to independent operators.This was not so much a franchise operation as a marketing tool for brand positioning, as it involved training staff and local customers in the specific features of the beer culture of Belgium (Beamish and Goerzen 10).

In conclusion, it may be argued that Interbrew’s recognition of the importance of cultural factors in the business marketing strategy of the company mirrors its recognition of the importance of local culture in Interbrew’s acquisition/consolidation strategy. In both areas, Interbrew has pursued a mixed approach which is heavily weighed in terms of local autonomy nd decentralization with a centralizing, flagship brand element as well. As we have seen, however, this last strategy has run up against the decentralized cultures of the company’s primary target markets, with the result being that even the projection of a Belgium beer culture and the Stella Artois brand has been with an eye to the cultural uniqueness

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