BACKGROUND
The external environment
Beer consumption around the world continues to fall. As GDP in poorer countries rise, people use their rising income to buy more beer. (The Economist Data Team, 2017). But when GDP per person reaches around $27,000 in a country, people spend money on more expensive drinks or become more aware of health risks and limit personal consumption. (The Economist Data Team, 2017). In the United States, the craft beer market is on the rise while company’s like Anheuser-Busch are seeing a decline in purchases of their most time-honored products such as Budweiser and Bud Lite. (The Economist Data Team, 2017)
The industry
The beer industry has seen a rise in the emergence of craft beers over the last decade. Until recently, the craft beer market rose by double digits each year. However, this year the industry saw a slowdown of craft beer when a few years ago, the market rose by double digits. (Terazono, 2018). Market saturation, oversupply of hops from growers, and increasing competition from other alcoholic beverages. Hops output has continued to rise while the demand has fallen and hop farmers find themselves filing for bankruptcy.
Despite falling sales of Anheuser-Busch’s top beers, Budweiser and Bud Light, AB InBev saw a rise in sales of the less iconic beers Heineken, Stella Artois, and Michelob Ultra. The purchase of ten popular microbrews demonstrates the company’s awareness of consumer tastes.
The client
Anheuser-Busch InBev, a publicly