We are sure that our many smart readers have heard about the impending deal with beer giants A-B InBev and SAB Miller. Analysts are saying that the deal could be worth around $104 billion. That's certainly not a small amount of cash being talked about. Most sources agreed that the merger would account for a whooping 30% of the beer industry.
Of course, we would love to ask: Does that mean better beer?
As microbrewery fans, we already know the answer.
In fact, one of the major considerations of the merger may be due to the rise of microbreweries in the United States. A source mentioned that beer sales for mass-produced beers have been pretty stagnant. In the UK, beer sales have gotten so low that they've built a beer council dedicated to raising the beer sales within reason.
It was only a few months ago that A-B InBev launched a few ads pioneering the idea that people who like their beer, like beer, and they parried the microbrewery growth.
What else can they do? Apparently, they can merge.
Can a merger build a cohesive marketing strategy? It's definitely possible. But merging giants can create more headaches than expected. Omnicom and Publicis saw that before their merger even happened. Who knows how the Family Dollar situation will pan out? One thing remains clear for this article.
Big Beer is struggling.
We teach our marketing students that product development and marketing strategy need to be joined. If beer sales for beer giants are decreasing, when nearly every beer drinker knows at least a brand or two from these giants, perhaps the advertising or marketing strategy isn't the problem. If a merger can keep costs down, maybe the brands can use the savings to actually compete on a product level with the microbreweries.
Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.
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