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anheuser-busch 2005AR_InternationalBeerOperations


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anheuser-busch 2005AR_InternationalBeerOperations

  1. 1. This is where I’m from. China is the world’s fastest-growing and largest beer market by volume.
  2. 2. I n t e r n at i o n a l B e e r O p e r at i o n s This is our world. Sales of Anheuser-Busch brands outside the United States in 2005, combined with our share of equity partner volume, totaled more than 47mi llion barrels. Since the formation of Anheuser-Busch International in by investing in image marketing to attract adult 1981, the global reach of the company and our flagship consumers, by creating strong sales and distribution brand, Budweiser, has continued to expand. Today, systems, and by strengthening our existing equity part- Budweiser is brewed locally in 10 countries and sold in nerships and seeking new alliances in strategic markets. key beer markets around the world. The company has Leading the way for future growth potential is significant equity investments in two of the most impor- the People’s Republic of China. Eleven years ago, tant beer markets outside of the United States: China Anheuser-Busch established the goal of becoming a and Mexico. leading brewer in what is now the world’s largest and The international division has achieved success by fastest-growing beer market. Today, Anheuser-Busch has carefully executing a two-pronged strategy for growth made significant progress toward this objective through — expanding the Budweiser brand globally and creating its Budweiser Wuhan Brewery operation, its 2004 acqui- strong partnerships with leading brewers around the sition of China’s fifth-largest brewer, Harbin, and its world. Since 1999, Anheuser-Busch International’s net strategic alliance with the No. 1 brewer in China, the income has increased by $400 million as a result of Tsingtao Brewery. China is now second to Mexico in development in both Anheuser-Busch operations and overall profit contribution to the international company our equity investments. and holds tremendous long-term potential as the country In 2005, Anheuser-Busch International’s sales and its beer industry continue to develop rapidly. volumes grew by 43 percent, including the impact of There are a number of reasons that China is one of equity partners and our Harbin brewery acquisition. the most important markets for Anheuser-Busch outside Anheuser-Busch operations increased sales volume by the United States. During the past five years, the beer 50.8 percent, and volume from equity partnerships in industry in China has grown more than it has in Mexico and China increased 36.6 percent. In total, Europe, North America and South America combined. Anheuser-Busch International volume reached Yet, current per capita consumption levels are only 47.2 million barrels in 2005. 20 percent of the levels of many developed countries, International expansion and growth remain priori- such as the United States, and 50 percent of the levels in ties for Anheuser-Busch. The company will achieve Japan and Korea. An increase in per capita consumption both by continuing to produce the highest-quality beers, to the levels of its neighbors in Japan and Korea would 15
  3. 3. I n t e r n at i o n a l B e e r O p e r at i o n s Budweiser Wuhan result in the Chinese beer industry tion network modeled after the International Brewing doubling to 500 million barrels. company’s U.S. distribution system Company While volume growth in the and modified for the Chinese beer Chinese beer industry has been Anheuser-Busch purchased its market. Today, through wholesalers, spectacular, industry profit lags brewery in Wuhan in 1995 and Anheuser-Busch is able to distribute behind global standards. However, currently brews Budweiser, Bud Ice Budweiser nationally. This is accom- with continued economic growth, and Budweiser Ultra, a lower plished through a network of 160 rising personal incomes, continued alcohol brew available only in distributors with more than 70 per- development of cities and suburbs, China. To meet growing demand, cent selling only Anheuser-Busch and the consolidation of breweries brewery capacity has more than brands in their beer portfolio. and beer brands, improved prof- quadrupled since Anheuser-Busch Tsingtao Brewery Co. Ltd. itability is likely. first invested in the brewery in Anheuser-Busch, as one of 1995, and production is currently The Tsingtao Brewery is China’s the first brewers to expand into 3.4 million barrels annually. In late largest brewer and brews the leading China, is well-positioned to capi- 2005, the Wuhan Brewery began export beer from China. The com- talize on the future growth of the producing Harbin Ice and Harbin pany operates 50 breweries across Chinese beer industry. Through 1900 Classic and expanded the China and, along with Budweiser, our successful Budweiser Wuhan distribution of these brands to Tsingtao is the country’s only other operation, our ownership of the include Hong Kong and eastern nationally distributed beer brand. Harbin Brewery, and our strategic and southern mainland China. In 1993, Anheuser-Busch made partnership with Tsingtao, an initial investment in Tsingtao. Anheuser-Busch continues to gain Today, that investment has evolved BUDWEISER IN CHINA momentum in the most important Budweiser is distributed nationally into a strategic alliance that enables international market for beer. in China and is positioned in the the companies to share best super-premium beer segment. Our practices and help Tsingtao and brand development efforts in China Anheuser-Busch achieve their long- In 2005, 10 YEARS IN CHINA are focused on three areas: term partnership goals in China. Budweiser celebrated its 10th The first is consistently In April of 2005, Anheuser-Busch anniversary in China. producing high-quality beer that converted all outstanding bonds to meets the company’s global stan- equity and increased its economic dards. The local management and ownership of Tsingtao to brewing, operations and technology 27 percent. Anheuser-Busch has teams ensure that Budweiser and day-to-day involvement with the the other Anheuser-Busch brands company through on-site manage- produced in Wuhan meet these ment teams in brewing, strategy strict quality standards. and finance and through two seats Second, Anheuser-Busch on Tsingtao’s board of directors. supports Budweiser and the Harbin Brewery Group Ltd. company’s other brands in China with a strong marketing platform, With the 2004 acquisition of including innovative advertising, Harbin, China’s fifth-largest top-notch sports sponsorships and brewer, Anheuser-Busch increased contemporary music promotions. its presence throughout northern Budweiser is the official interna- China, where per capita beer tional beer sponsor of the 2008 consumption is nearly twice the Olympic Games in Beijing and it national average. In addition to is the official beer sponsor of expanding the availability of Harbin the China Olympic team. These premium brands to eastern and sponsorships enable Budweiser southern China, Anheuser-Busch to connect with adults in China is introducing Harbin as an export who enjoy beer. brand to the United States in 2006. Third, the company has devel- The company’s strategy is to capi- oped a strong wholesaler distribu- talize on the quality and popularity 16
  4. 4. I n t e r n at i o n a l B e e r O p e r at i o n s Mexico is the largest export market for Anheuser-Busch and sales of Budweiser and Bud Light repre- L AT I N A M E R I C A sent one-third of the imported beer segment in Mexico. of Harbin’s beer, the strength of sponsored an international business to exclusively import and distribute the Harbin name and the image development conference and contri- Budweiser and Bud Light in of the company as China’s oldest buted to an annual beer festival Mexico in 1989. This relationship brewer. In October 2005, Harbin that attracts thousands of tourists led to an equity investment and was awarded the China Top Brand to the region. An Anheuser-Busch partnership with Grupo Modelo Award by a committee of repre- investment of $8 million in the in 1993. Modelo, the maker of sentatives from the government, fund will encourage long-term Corona, is the No. 1 brewer in industrial associations, media and economic, business and educational Mexico, with more than 56 percent business professionals based on development in Harbin and the share of the beer market. Corona the brand’s market value, overall surrounding areas. remains the No. 1 import in the quality, economic impact and China is the most dynamic United States. In 2005, Modelo potential for future development. beer market outside of the United sold more than 38 million barrels Anheuser-Busch has a long- States and, with its current platform of beer worldwide. standing commitment to the for growth, Anheuser-Busch is Mexico is the largest export communities where it operates. In well-positioned to participate in market for Anheuser-Busch, and China, the company works closely the development of the country’s sales of Budweiser and Bud Light with the city of Harbin through the beer industry. represent one-third of the imported Harbin City Anheuser-Busch Civic beer segment in Mexico. In 2005, Mexico Development Fund. Through the Budweiser and Bud Light volume fund, Anheuser-Busch joins city Anheuser-Busch recognized increased 35 percent, resulting officials to promote the region the tremendous potential of the in profit growth for the eighth as a good place for business and Mexican beer market and formed consecutive year. tourism. To date, the fund has an agreement with Grupo Modelo 17
  5. 5. I n t e r n at i o n a l B e e r O p e r at i o n s In Italy, Budweiser is brewed and sold under license by Heineken Italia SpA, the No. 1 brewer in Italy. Heineken Italia has a strong sales force and a broad distribution network that supports growth of the Budweiser brand in Italy. In addition to advertising targeting Italy’s contemporary adults, Budweiser served as the official beer sponsor of the 2006 Olympic Winter Games in Torino, where spectators from around the globe were entertained at numerous Budweiser-sponsored events. In 2006, Bud will enter Russia as a result of a new local brewing and sales alliance between Heineken Russia and Anheuser-Busch. In Canada, the largest beer market for Anheuser-Busch Budweiser has been the official beer of I N T E R N AT I O N A L S P O N S O R S H I P S brands outside the United States, the FIFA World Cup ™ since 1986, and Anheuser-Busch is proud to continue its Budweiser is brewed and distributed sponsorship of the 2006 FIFA World Cup ™ in Germany. by Labatt Breweries of Canada through a long-standing licensing European Business Budweiser is a sponsor of the pres- agreement. Budweiser has been the Performance and Growth tigious F.A. Premier League, the No. 1 brand in Canada for two The United Kingdom is the largest top U.K. football league, and some consecutive years and it continues and most profitable European of the league’s largest clubs — to gain market share. Bud Light, market for the international Manchester United, Chelsea F.C. introduced in Canada in 1986, has company, where Budweiser has and Arsenal F.C. grown significantly in recent years long held its position as the No. 1 Elsewhere in Europe, as lighter beers have become premium-packaged lager in bars, Anheuser-Busch sells Budweiser increasingly popular in Canada. pubs, clubs and restaurants. through local brewer and importer In Argentina, Compañia Budweiser sales reached another partnership arrangements. Cervecerías Unidas brews, pack- record high in 2005 and today, one In Ireland, Anheuser-Busch ages and sells Budweiser under a out of every three premium brands has had a partnership since 1986 licensing agreement. 2005 marked sold in the U.K. is a Budweiser. with Ireland’s leading brewer, the best year ever for Budweiser In addition to Budweiser, Guinness, to brew and sell sales in Argentina. the Anheuser-Busch operated Stag Budweiser. With the strength of the With excellent partnerships Brewery near London also brews Guinness distribution system and with leading brewers in the two Michelob, Michelob ULTRA and innovative marketing, Budweiser most attractive international beer Bud Ice for the U.K. market and has become one of the leading lager markets — China and Mexico — for export to continental Europe. brands among Irish consumers. and strong brand performance The company’s long-term In Spain, Sociedad Anonima in large global beer markets, investment in marketing, including Damm brews and sells Budweiser Anheuser-Busch is well-positioned advertising, sponsorship and trade under a licensing agreement. The to continue development of its promotion, has enabled Budweiser brand maintains a strong presence international business in the to appeal to local beer drinkers. in contemporary bars and capital- coming years. Sports sponsorship is an important izes on Spain’s passion for soccer part of Anheuser-Busch’s U.K. through sponsorship of the marketing. In addition to spon- FIFA World Cup™ and other soring the FIFA World Cup™ , local soccer sponsorships. 18
  6. 6. This is my favorite. In the U.K., Budweiser is the No. 1 premium packaged lager in bars, pubs, clubs and restaurants.