Grolsch Case Study

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PANKAJ GHEMAWAT JORDAN MITCHELL

SM – 1529 – E O – 308 - 029

Grolsch: Growing Globally
In November 2007, SAB Miller, the world´s second largest brewer,1 announced the friendly takeover of the world’s 51st largest, Royal Grolsch N.V. of the Netherlands, for €816m in cash - 84% more than Grolsch’s value over the previous month. Nick Fell, SABMiller’s Marketing Director, explained the logic of the deal: “[Grolsch is] a fantastic brand. It’s North European, it’s a fantastic product, it’s got unimpeachable brewing credentials and authenticity and credibility. And it’s a damn good product. So for anybody interested in developing their premium beer business, this is an absolute peach of a brand to get hold of… we see huge potential for it in our global footprint, particularly in markets like Latin America and Africa where we’ve got a strong route to market but where the premium beer business is still in its infancy.”2 Grolsch had hitherto focused on developed markets, particularly the UK, US, Canada, Australia, New Zealand and France, in pursuit of its goal of becoming one of the world’s top 10 global beer brands. Groslch was already the world’s 21st largest global brand, measured by international (nondomestic) volume (see Exhibit 1). International volume had grown to account for slightly over onehalf of total volume and, going forward, seemed to offer much more potential. Drinkers often rated Grolsch higher than larger brands, including Heineken, the top global brand as well as the leader in Grolsch’s home market (see Exhibit 2). And Grolsch had started up a state-of-the art brewery in 2004 that could be expanded at little incremental cost. The acquisition closed and in February 2008, Grolsch became an independent subsidiary of SABMiller. Rob Snel, head of Grolsch International since 1999 and an employee since 1984, was named Grolsch’s new CEO shortly thereafter. He had to decide what changes, if any, to recommend to its global strategy.

1 This compares the relative positions of SABMiller with the two other major breweries, InBev and Anheuser-Busch as of the

end of 2006. SABMiller’s fiscal year ends in March.
2 “Q&A with Nick Fell, Marketing Director, SABMiller,” SABMiller, www.sabmiller.com. Accessed Nov. 30, 2007.

________________________________________________________________________________________________________________ This case was prepared by Professor Pankaj Ghemawat and Jordan Mitchell, Research Assistant, as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. August 2008. Copyright © 2008, IESE. To order copies or request permission to reproduce materials, contact IESE PUBLISHING via the website, www.iesep.com. Alternatively, call +34 932 534 200, send a fax to +34 932 534 343, or write IESEP, C/ Juan de Alós, 43 - 08034 Barcelona, Spain, or iesep@iesep.com. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means – electronic, mechanical, photocopying, recording, or otherwise – without the permission of IESE. Last edited: 10/10/08 1

SM-1529-E Grolsch: Growing Globally

Company Evolution
Grolsch traced its history back to a brewery, in the Dutch town of Groenlo near the German border3 that was purchased by Willem Neerfeldt in 1615. By the late 1800s, the brewery had come under the control of Theo J. De Groen. In 1897, he introduced Grolsch’s iconic - and trademarked ceramic swingtop bottle, which was advertised as easy to open and allowing storage of beer for later consumption. Marketing of the Grolsch brand began in 1918. In 1922, this operation merged with a brewery in nearby Enschede (see Exhibit 3 for a map of the Netherlands), but Grolsch was retained as the principal brand. By the 1960s, Grolsch had grown from a “regional” brand to become the country’s second most popular, behind Heineken. After the death of the head of the De...
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