Feel Sorry For A-B..?

Jay Brooks, blogging on the US West Coast, picked up on a recent survey which seemed to indicate that Budweiser was America's Favorite Beer. US drinkers, the survey concluded, preferred domestically-brewed beer, and Bud came top of that list. Jay rightly raises an eyebrow at the sample size and the way questions were asked of respondents. But the story got a fair bit of play in the US.

However, it seems not all is rosy in the (Busch) Garden. The Wall Street Journal carried a story titled 'Bitter Brew' the day before the survey was released, reporting on the cultural hurdles which still appear to exist two years into the merger of A-B and InBev. While the North American zone of the globally-tentacled entity known as A-B InBev NV is contributing almost half of the profits, this seems to be at the cost of jobs, investment and employee morale, with the annual 'employee engagement' survey indicating a sizable minority of US staff unhappy with the new management culture imposed by InBev.

The story has provoked a flurry of comments from apparently disgruntled current and former staff, who seem to generally concede the old business was flabby and needed to streamline, but feel that the new people are riding roughshod over them in the rush to slash and burn costs. Among stories from the brewery floor, a claim that yeast is cropped and re-used up to 15 times, and reductions in engineering support and quality control. Management staff conversing in Portuguese, failures in key IT systems... Management has allegedly imposed a Stalinist regime in an effort to get engagement numbers up by linking bonuses to satisfaction. For their part, InBev haven't offered any response or commented on the story, beyond a bland statement attributed to top man Luiz Edmond.

A-B is usually the default bogeyman for all that is wrong with global brewing, so you would be forgiven for experiencing some schadenfreude at their discomfort as they come to terms with a new regime. For British beer lovers, it has echoes of the eventual fate of the super-regional brewers here who were gobbled up by nationals, and who themselves were then devoured by the global players. But I'm remembering a conversation I had with a young woman from St Louis at New York's Brazen Head Ale House some years back, when she defended A-B as a good employer who looked after their people. Whether you think A-B deserves what it gets, it does appear that some loyal, dedicated and long-serving employees are paying the price for this merger with their jobs, while large numbers of those that remain are plumbing the depths of despair.

I wonder how many of those survey respondents would still pick Bud if they knew their 'favourite beer' was being made to a new bottom line imposed by foreign overseers?

Stella Max?

So, the previous post about big-dick bullying of smaller brewers by multinational megaliths shook loose a mysterious message from a US correspondent concerning PepsiCo.

My correspondent (we'll call him "Biff Boggle") referred to a relationship between PepsiCo and the giant brewing conglomorate AB Inbev, thus...

Not sure many know this but Bud and Pepsi have been secretly in cahoots for a while now...

I was intrigued. Cahoots over what? Biff was careful... "I predict a merger...soon" came the hesitant reply. I decided to look into this for myself, so hit the Interwebs to see what was in the wind.

A quick google search indicated there was a far-from secret relationship in some back-office functions at both businesses Stateside. Procurement (the Strategic Sourcing Consortium) and some media purchasing are two areas which have been shared since mid-2009, leading more than one market watcher to wonder whether a future merger might not be on the cards. However, and more intriguing, was Biff's last missive, reporting:

...an experimental testing phase with both companies sharing one floor...to see if it'll work?

This location is apparently somewhere in New England, and secret. So, steps towards an eventual merger? There's been talk that AB-I and SABMiller might be looking at leveraging their synergies to create win-win scenarios. Who knows whether the real story lies there, or with Biff's mysterious scrying. Suddenly, seemingly innocuous stories such as this one take on more weight.

Reading too much into it? Perhaps. Meantime, I'm waiting patiently for more midnight missives from Biff Boggle. Courage, mon brave...