AB InBev: Brewing an Innovation Strategy

AB InBev: Brewing an Innovation Strategy

By
Robert E. Siegel, Amadeus Orleans
2017|Case No.E643| Length 22 pgs.

AB InBev, the world’s largest beer company, faced serious challenges in 2017. First, large food and beverage companies were under-pressure due to shifting consumer preferences towards healthier products and increasing price pressure from retailers. The beer category, in particular, showed signs of stagnation in developed markets, such as the United States and Europe. Moreover, several major trends – e.g. localization of consumption and rise of craft beers– were quickly transforming the industry. Finally, technological innovations, such as e-commerce platforms and deep data-analysis enabled new players and emptied the effects of mass-marketing.

The strategy designed by the owner of legendary brands like Budweiser, Stella Artois and Michelob Ultra, was multifaceted. On the one hand, the importance of renovating the core business was undeniable, especially via improvements to the portfolio and modernization of sales capabilities. On the other hand, the company needed to catch up on the new trends and become a disruptor itself; craft beers, e-commerce, home-brewing, and innovative business models were some of those. All while preserving its powerful internal culture and keeping its shareholders satisfied.

Learning Objective
The teaching objective of the case is to give students an overview of how traditional companies are reacting to technological disruption.
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