One of the largest brewers in the world, Interbrew grew rapidly in the 1990s from its home market in Belgium to a global presence in markets around the world. As this essay will demonstrate, Interbrew's global strategy of consolidation and market penetration has been balanced between a respect for local autonomy and beer culture with efforts to adapt the flagship brand of Stella Artois to these cultures.
The global beer industry is highly fragmented, with the four major brewers accounting for only 22 percent of the global beer trade; a number that is strikingly low in comparison to comparable numbers of 78 percent in the soft drink industry, 60 percent in the tobacco industry, and 44 percent in the liquor industry. This market context was the justification for Interbrew's strategy of expanding into markets around the world through a series of acquisitions of brewers in both mature and growth markets (Beamish and Goerzen 3).
Within a span of four years, Interbrew spent US$2.5 billion on purchases of brewers such as the Canadian Labatt; a purchase that earned Interbrew a minority stake in the second largest Mexican brewer which produced the Sol brand. In addition, Interbrew purchased breweries in identified markets for growth where per capita beer consumption was low in comparison to mature markets in North America and Western Europe. These growth markets include China, Russia and South Korea (Beamish and Goerzen 2).
In general, Interbrew's strategy for entry into foreign markets is one of consolidation; acquiring existing brands and breweries in local markets in which there is considerable long-term growth potential. This strategy is often micro-focused to a city level - specifically in highly lucrative growth markets such as China - where Interbrew's purchasing of breweries with popular local brands is seen as allowing giving it a base for future expansion.
The one foreign acquisition that is...