Wayne’s wORld: AB InBev – SAB MillerCoors Mega Suds Takeover – A Supply Chain View

Just imagine, Budweiser-Coors Banquet Beer-Molson Canadian-Corona-Beck’s-Bud Light-Coors Light (The Silver Bullet)-Miller Lite (Less Filling, Tastes Great)-Michelob Ultra-Miller High Life (The Champagne of Beers)-Stella Artois-Leinenkugel and so on and so on, all a part of the same global supply chain.  Admittedly most breweries operate independently and sell through distribution but the scale and global buying power of this new behemoth are staggering.

So what’s the point?  What does this mean in Wayne’s wORld?

More than ever business leaders must come to terms with BIG data and understand the decision support value provided by advanced analytics.

Demand and supply shaping across competing and complementary brands, new sourcing and distribution strategies leveraging scale & demand density and production planning to take advantage of speed to market (freshness) are only a few examples of new opportunities.

The beer business is very regional in nature.  Regional planning and execution from buying malt & hops to cans & bottles to delivering to distribution warehouses opens significant strategic opportunities to reduce cost.

Beer distributers seek to offer a wide variety of brands.  Today these brands are delivered independently and then combined by the distributer to take to stores, bars and outlets.  With a majority of market volume consolidating, this entire process can be reassessed to consider new methods of delivering to and engaging with the distribution channel.

None of the examples I have listed here are trivial problems to define and solve.  Even small pieces of the universe of improvement opportunities can be worth millions of dollars in cost reductions and efficiencies.  Now more than ever advanced analytics capture the insight to discover and implement meaningful change.

My first reaction to the announcement of the take over was, “Oh no, what will they do to the thriving craft beer industry?”  I sat back to reflect while enjoying a WAZ Brewin’ RyePA and came to the conclusion all us small time brewers should be pretty safe in the long run.

Admittedly for me and my cohorts, other than acquisitions of craft brewers such as Saint Archer’s in San Diego, there is exceptionally limited appeal to the consolidated brand lineup.  Not only are most of us not customers of this huge global company, the breweries in question don’t use most of our ingredients.

For example, have you ever had a Bud Light dry hopped with Citra hops?  I personally have never made a beer using rice or corn malt adjuncts so the big guys can use up the whole market there.  I prefer ale yeast strains that enhance the beer’s flavor as opposed to flavorless, fizzy yellow light lagers so I think we’re safe there as well.

Furthermore, even the most prolific homebrewers, or for that matter craft brewers, make barely a drop of beer in comparison to the shear volume produced by this conglomeration of companies.  So, unless there is an all out attack on the little guy by this enormous monster we should safely operate in a world of big flavor exploration!

In conclusion, analytical opportunities – HUGE!, risk to destruction of craft brewing – minimal.  Seems like everything’s gonna be alright.

Since this is Wayne’s World I have to congratulate the defending ALCS champion KC Royals on their ALDS victory over the Houston Astros!  It was a great series and we’re looking for amazing things for years to come out of a talented young Astros team.  Now on to defending the AL title and making a run at the World Series!


* The images of brands in this blog post are trademark properties of Anheuser-Busch InBev NV and SABMiller plc.

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