| BRUSSELS, June 12
BRUSSELS, June 12 Anheuser-Busch InBev,
the world's largest beer maker, is relying on the World Cup to
grab market share from rivals and make its top-selling Budweiser
a truly global brand.
The brewer says it has increased its marketing budget by a
"low to mid-teens percentage" this year to sell more beer -
extra spending of between $600 million and $1 billion.
While it has traditionally held on to its No.1 spot by
cutting costs and rising prices, Anheuser-Busch has room for an
extra publicity outlay this year because of a boost to income
from its takeover of Mexico's Grupo Modelo last year.
"This is the year they can say let's give it a proper go and
see what the result is," said RBC Capital Markets analyst James
While Budweiser has been the official beer of the World Cup
since 1986, AB InBev only acquired the brand in 2008 and so has
only sponsored one World Cup so far: In South Africa, in 2010, a
market dominated by rival SABMiller, it increased its
marketing spend by 2 percent.
This year is different. AB InBev has a near two-thirds share
of the Brazilian market, so is firmly in home territory. Brazil
is also one of the new target markets for its leading brand.
Companies have paid an estimated $120-160 million each to be
sponsors of the 2010 and 2014 World Cups, according to Sports
Sponsorship Insider. Its editor Matthew Glendinning believes AB
InBev, as a brewer with more obvious marketing potential, is
likely to have paid towards the top of that range.
"This is the biggest global marketing campaign ever for
Budweiser," Andrew Sneyd, the brand's marketing director, told
Global brewers see beer consumption growing 3-4 percent in
Latin America, as well as in Asia and Africa, over the next five
years, and expect even more rapid expansion of premium brands,
such as Budweiser, which bring higher margins and profits.
For now, Heineken leads in those fast-growing
markets, with some 20 percent of the international premium
segment. But in Budweiser, Stella Artois and Corona, AB InBev
has the next most popular brews.
Budweiser's World Cup sponsorship initially puzzled some
analysts as the beer had a limited global presence outside its
U.S. home market.
But since InBev's 2008 purchase of Anheuser-Busch, it has
pushed Budweiser wider around the world. It now has 2 percent of
the Chinese and Russian markets and is growing in Brazil.
AB InBev is currently selling Budweiser in golden bottles
featuring the World Cup in more than 50 countries, has teamed up
with Fox Sports for a series of soccer documentaries and is
giving fans the chance to tweet in their man of the match votes.
The brewer is also linking its local brands in other
countries to the tournament: In Mexico, it has offered 1,000
World Cup tickets to drinkers of its Corona brand - gaining
market share from Heineken-owned rival Femsa.
The World Cup should increase overall beer volume in Brazil
by 1 to 2 percentage points - some 1.2 to 2.4 million
hectolitres - and if the Brazilian team is successful that may
even be a 3 percentage point bump, says Bernstein Research's
AB InBev will be hoping to persuade those drinkers to switch
to its Brahma or Budweiser brands - ideally permanently.
AB InBev may be wise to push its beers in Brazil. It has
extended Budweiser's sponsorship to include the 2018 edition in
Russia and the 2022 World Cup awarded to Qatar, but those
countries are unlikely to produce a rise in beer sales.
"You really have to be a beer-loving, football-loving
country to benefit," said Societe Generale beverage analyst
France, hosts and winners in 1998, secured an impressive 4.6
percent boost to beer sales that year, according to Plato
Logic's. But for 2002 hosts Japan and South Korea, beer
consumption slowed or dropped.
Equally important, says Stirling of Bernstein Research, is
the weather. He cites data showing that while British beer
shipments jumped in World Cup months, they grew most in years
when there was no tournament but good summer weather.
"It's clear that it's more important for the sun to shine
than for the football team to do well," said Stirling.
(Editing by Sophie Walker)