Anheuser-Busch rolling along
In an interesting deal between two beer powerhouses, Anheuser-Busch, the brewer of Budweiser bought the Rolling Rock US beer brand from Belgian-Brazilian rival InBev. The two companies vie for the #1 position in world beer, one ahead by revenue the other by volume.
Rolling Rock was InBev's only US brand, and is a moderate regional player in the Northeast and Midwest, especially among college students. The Rolling Rock brand consists of two varieties, Rolling Rock and Rolling Rock Light. A-B has said it will brew the label in its own existing breweries, in the same place where it makes Bud. Then it will use it national reach and its ability to grab the shelf space that InBev has been unable to acquire.
The brand has existed since 1939. It was acquired by Canadian brewer Labatt in 1987, and InBev (formerly Interbrew) later bought Labatt in 1995. Rolling Rock has lost market share in the pas few years, dropping by 15% last year. InBev's US division still plans to import such brands as Beck's, Bass, Labatt, and Stella D'Artois to the US.
The deal, for only $82 million, was minor by any standards, even beer industry standards, but it does illustrate some interesting issues. InBev has decided that it can never be one of the top beer companies in the US, as big as it is elsewhere. It was losing access as the US giants Anheuser-Busch, SAB Miller, and Coors flood the airwaves with beer ads. Only in the more rarefied and higher-margin area of imported beer does it think it has a good chance to make money. For A-B, it is a chance to gain another alternative label, aimed at those who want a beer like Budweiser but don't want to drink the most predictable brew. A Forbes article ("Anhesuer-Busch to Buy Rolling Rock Brand", 5/19/06) quotes CEO August Busch IV as saying:
We live in a diverse world where consumers are hungry for variety…Acquiring Rolling Rock enables us to reach a new audience and to continue building our broad portfolio of products that meet the wide-ranging needs of consumers.
The same artcile quotes Ben Steinman, editor of the industry publication Beer Marketer's Insights, as agreeing:
A-B was something of a monolith - they had these megabrands, Bud and Bud Light, and serviced the needs of a great number of drinkers...What's been happening in the last several years is drinkers crave more variety and more choice. What you're seeing is A-B trying to get after this.
Rolling Rock does have a "diverse" taste from that of Bud, but not by much, making a kind of safe rebellion against the big brands. It may be that its green bottle is the most distinctive thing about Rolling Rock (Yes, yes, if you are a Rolling Rock fan you'll tell me you taste a big difference, but not like the difference between Bud and any German lager or a British ale. Bud, Miller, Coors, and Rolling Rock are all American lager beers and very similarly brewed.)
For A-B, it is a chance to offer another pseudo-choice to consumers, as with Michelob and Busch beer. It's likely that "Rolling Rock Ice" and "Rolling Rock Ultra" will be added to expand the lien and take even more shelf space.
In the American beer industry, this is near-final chapter in the demise of a wealth of US regional beers from Falstaff to Rheingold and from Narragansett to Olympia that have disappeared since the 1970s, victims of the oligopolization of the industry. Some brands live as curiosities under the Papst Brewing company, itself a shadow of its former self: these include Stroh's. Schmidt, Schafer, Piels, Blatz, and even Schlitz (once the #1 beer brand in the US).
2:50:42 PM 
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