Does the growth of China mean the end of beer as we know it?

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These are dark days for North American macrobrews.  While Molson Coors continues to be hurt without their loyal Canadian hockey fan demographic, even Budweiser, the king of mediocre macrobrew beer continues its slow decline of the market share.  Motherboard recently had a feature on why Budweiser’s decline of quality can be credited to the acquisition of Anheuser-Busch by InBev in 2008, giving the Brazilian-Belgian beer empire control of 25% of the worlds beverages market.

While Anheuser-Busch and Budweiser got to where they were through the mass production of cheap, bland, inoffensive lager, the focus was to create a product that tastes like beer.  The rise of lite beers and gimmicks like Bud Light Lime-A-Rita have taken away from that, there was still a place for regular Budweiser and it’s slightly hoppy finish.

At least that was the case until AB InBev, who have taken mass production to an even greater level, requiring across the board cost-cutting effecting the quality of its products.  Motherboards points to CEO Carlos Brito, who in a Bloomberg profile is credited for leading InBev to replacing Hallertauer Mittelfrüh, the German hops selected by August Busch to give Budweiser its taste with cheaper, lower quality hops making an even blander product.

Brito is a CEO’s CEO, the type of guy who would boil live children if it was an efficient cost cutting measure, and he has been very good for investors so far.  But will InBev lose consumers if they continue to lower their product’s quality? One quote from the Bloomberg piece hints at AB InBev’s future —  hops farmer Martin Bauer doubts they will go back to buying quality hops, pointing out that “the Chinese and the South Americans prefer lighter beer anyway.”

And this is why tasteless beer is here to stay.  While more affluent American consumers might turn to microbrews, emerging markets will only continue to expand their consumption of light beer.  Britos is from Brazil, the largest market in South America and an increasingly important importer.  Brazil, like most tropical countries, likes there beer to refreshing first, everything else second.

The Chinese market is even more important to the future of multinationals like AB InBev.  A few years ago Snow, owned by rival British multinational SABMiller passed Bud Light as the world’s biggest selling beer. Unfortunately I’ve never had Snow, but considering it’s named after frozen water, I’m going to assume it’s not famous for its strong taste.

Budweiser, to ensure it continues to remain relevant in it’s home market, has a new strategy: stronger beers.  If you can’t compete when it comes to taste, at least compete when it comes to getting people drunk.

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But regardless of Budweiser’s future and the continuous growth of microbrews in North America, as long as multinationals continue to focus more and more on China and other emerging markets in Asia and South America, light beer isn’t going anywhere.

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