|Wholly owned subsidiary|
1852 (as Bavarian Brewery)|
St. Louis, Missouri, U.S.
|Headquarters||St. Louis, Missouri, U.S.|
Number of locations
|12 breweries (2012)|
|Revenue||US$15.304 billion (2011)|
|US$8.578 billion (2011)|
Anheuser-Busch Companies, Inc. / / is an American brewing company founded and based in St. Louis, Missouri. Since 2008, it has been a wholly owned subsidiary of Anheuser-Busch InBev (AB InBev). The company operates 12 breweries in the United States. Until December 2009, it also was one of the largest theme park operators in the United States, operating ten theme parks through the company's family entertainment division, Busch Entertainment Corporation. St. Louis, Missouri is also the headquarters for the AB InBev North America unit. It is the largest beer producer in the world.
Beginnings and national expansion
In 1852, German American brewer and saloon operator George Schneider opened the Bavarian Brewery on Carondelet Avenue (later known as South Broadway) between Dorcas and Lynch streets in South St. Louis. Schneider's brewery expanded in 1856 to a new brewhouse near Eighth and Crittenden streets; however, the following year financial problems forced the sale of the brewery to various owners during the late 1850s. In 1860, the brewery was purchased on the brink of bankruptcy by William D'Oench, a local pharmacist, and Eberhard Anheuser, a prosperous German-born soap manufacturer. D'Oench was the silent partner in the business until 1869, when he sold his half-interest in the company. From 1860 to 1875, the brewery was known as E. Anheuser & Co., and from 1875 to 1879 as the E. Anheuser Company's Brewing Association.
Adolphus Busch, a wholesaler who had immigrated to St. Louis from Germany in 1857, married Eberhard Anheuser's daughter, Lilly, in 1861. Following his service in the American Civil War, Busch began working as a salesman for the Anheuser brewery. Busch purchased D'Oench's share of the company in 1869, and he assumed the role of company secretary from that time until the death of his father-in-law.
Adolphus Busch was the first American brewer to use pasteurization to keep beer fresh; the first to use mechanical refrigeration and refrigerated railroad cars, which he introduced in 1876; and the first to bottle beer extensively. By 1877, the company owned a fleet of 40 refrigerated railroad cars to transport beer. Expanding the company's distribution range led to increased demand for Anheuser products, and the company substantially expanded its facilities in St. Louis during the 1870s. The expansions led production to increase from 31,500 barrels in 1875 to more than 200,000 in 1881.
To streamline the company's refrigerator car operations and achieve vertical integration, Busch established the St. Louis Refrigerator Car Company in 1878, which was charged with building, selling, and leasing refrigerator cars; by 1883, the company owned 200 cars, and by 1888 it owned 850. To serve these cars and switch them in and out of their St. Louis brewery, Anheuser-Busch founded the Manufacturers Railway Company in 1887. The shortline operated until 2011 when Anheuser-Busch sought to shut down operations.
During the 1870s, Adolphus Busch toured Europe and studied the changes in brewing methods which were taking place at the time, particularly the success of pilsner beer, which included a locally popular example brewed in Budweis. In 1876, Busch introduced Budweiser, with the ambition of transcending regional tastes. His company's ability to transport bottled beer made Budweiser the first national beer brand in the United States, and it was marketed as a "premium" beer.
The company was renamed Anheuser-Busch Brewing Association in 1879; in 1880, Adolphus Busch became company president upon Anheuser's death. The Busch family fully controlled the company through the generations until Anheuser-Busch's sale to InBev in 2008.
During the 1880s and 1890s, Busch introduced a series of advertisements and marketing giveaways for the company, including bottle openers, calendars, corkscrews, pocketknives, postcards, and prints. Among the most well-known of these giveaways was Custer's Last Fight, a lithograph print of a painting by St. Louis artist Cassilly Adams. As a marketing tactic, Busch distributed thousands of copies of the print to bars in 1896, the same year Anheuser-Busch introduced its new "super-premium" brand, Michelob. Eventually more than one million copies of the print were produced, and it became "one of the most popular pieces of artwork in American history."
At the turn of the 20th century, Anheuser-Busch continued to expand its production facilities to keep up with demand. In 1905, the company built a new stockhouse in St. Louis, and by 1907 it produced nearly 1.6 million barrels of beer. As demands for the prohibition of alcohol in the United States grew, Anheuser-Busch began producing non-alcoholic and low-alcoholic beverages (known as near beer); the most successful of these was Bevo, a malt beverage introduced in 1908. After the death of Adolphus Busch in 1913, control of the company passed to his son, August Anheuser Busch, Sr., who continued to combat the rise of prohibitionists. As part of an effort to improve the respectability of drinking, August Busch built three upscale restaurants in St. Louis during the 1910s: the Stork Inn, the Gretchen Inn (now known as the Feasting Fox), and the Bevo Mill.
As with all breweries in the country, the Temperance movement and eventual Prohibition in the United States dealt a major blow to the company in the 1910s through the 1930s. Some of the products sold by Anheuser-Busch to survive during Prohibition included brewer's yeast, malt extract, ice cream, and Bevo, a nonalcoholic malt beverage.
Prohibition to Acquisition by InBev
In 1957, Anheuser-Busch became the largest brewer in the United States.
In 1981, Anheuser-Busch International, Inc., was established as a subsidiary responsible for the company's international operations and equity investments. Prior to its 2008 acquisition, Anheuser-Busch operated 15 breweries internationally: 14 in China and one in the United Kingdom.
In 1997, Chinese production of Anheuser-Busch products began after the company's purchase of a local brewery; later, the company operated both Budweiser Wuhan International Brewing Company and Harbin Brewery, which Anheuser-Busch fully acquired in 2004. In the United Kingdom, the Budweiser Stag Brewing Company produced and packaged Budweiser at the Stag Brewery in Mortlake.
At one time, Anheuser-Busch International also held investments in Grupo Modelo in Mexico Tsingtao Brewery in China; Anheuser-Busch also held investments in Redhook Ale Brewery of Seattle, Washington and Widmer Brothers Brewery of Portland, Oregon. After the 2008 acquisition, most international operations were transferred to AB InBev zones where the interests are located.
On June 12, 2008, Belgian-Brazilian brewing company InBev announced that it had made a US$46 billion offer for the company, which if it was accepted would join two of the world's four largest brewing companies (based on revenue) and create a company brewing three of the highest-grossing beers in the world, namely Bud Light, Budweiser, and Skol. InBev also stated that the merger would not result in any U.S. brewery closures and they would attempt to retain management and board members from both companies. On June 25, 2008, Anheuser-Busch officially announced that they would reject InBev's offer and provide a restructuring of the company to maintain shareholders and United States World Headquarters in St. Louis. On July 1, 2008, InBev urged Anheuser-Busch shareholders to vote in favor of the buyout as InBev felt the offer of $65 per share should be considered a reasonable offer in view of the falling stock market. The company had previously filed suit in Delaware, after the rejection of their offer, to ensure that the stockholders could oust Anheuser-Busch's 13 board members. On July 7, 2008, Anheuser-Busch filed a lawsuit against InBev to stop them from soliciting support of shareholders, stating that the company's offer is an illegal scheme. InBev was also accused of concealing that they do business in Cuba, which might have created additional obstacles to their efforts to operate in the United States.
On July 13, 2008, Anheuser-Busch and InBev said they had agreed to a deal, pending shareholder and regulatory approval, for InBev to purchase the American icon at $70 per share, creating a new company to be named Anheuser-Busch InBev. Anheuser-Busch would get two seats on the combined board of directors. The all-cash agreement, almost $52 billion in total equity, created the world's largest brewer, uniting the maker of Budweiser and Michelob with the producer of Beck's, Stella Artois, Hoegaarden, Leffe, Bass, Labatt and Brahma. The two companies had combined yearly sales of more than $36.4 billion, surpassing the current No. 1 brewer, London-based SABMiller.
On November 18, 2008, the acquisition was completed, and the parent corporation was renamed Anheuser-Busch InBev; Anheuser-Busch became a wholly owned subsidiary of the new corporation, controlled within the North America zone unit of AB InBev. By early 2009, AB InBev "turned a family-led company that spared little expense into one that is focused intently on cost-cutting and profit margins, while rethinking the way it sells beer." AB InBev focused on reducing costs in the Anheuser-Busch Companies subsidiary and implemented performance-related pay, along with several other changes. They immediately laid off 1,400 employees and 415 contractors, sold Busch Entertainment Corporation and company-owned aircraft, lengthened accounts payable terms, and introduced zero-based budgeting.
For employees, AB InBev ended perquisites such as executive assistants for senior management, company contributions to the salaried employee pension plan, and company-provided life insurance to retirees; it also reduced the number of company-provided cell phones, taking back 1200 Blackberries; and ended tuition reimbursement, and severance packages. These internal changes accompanied changes in its advertising. These cost-cutting measures rapidly reduced AB InBev's debt from $56.6 billion in 2008 to $30.1 billion at the end of 2012. When the restructuring was complete, only three senior-level Anheuser-Busch managers remained.
InBev auctioned off several large assets in an effort to pay off debt to the banks that financed the merger. It sold Anheuser's 27% stake in China's Tsingtao, sold a few beverage can and lid-making plants to Ball Corporation, and sold its own South Korean beer business for $1.8 billion to private equity firm Kohlberg Kravis and Roberts & Co.
It put the 10 theme parks in Anheuser's Busch Entertainment Unit, which included its three SeaWorlds locations, up for sale.
The new company caused concern from its suppliers when it announced it would take 120 days to pay its bills rather than 30 days, taking time to use that money for other purposes. The new payment policy often results in longer periods than 120 days, since the 120 days starts from the end of the month in which the invoice is 'approved' internally, which can be many days/months after an invoice is submitted.
Following the merger, perks like free tickets to St. Louis Cardinals baseball games and for Busch Gardens were taken away from employees. Anheuser-Busch stopped providing free beer to its employees and visitors to its theme parks.
InBev signed a 10-year lease on 31,500 square feet of office space on Park Avenue in New York, which led to speculation that they would move Anheuser-Busch InBev North American headquarters from St Louis.
In February 2013 a widely publicized lawsuit against AB InBev misrepresented its use of standard industrial brewing techniques as "watering down" products including Budweiser and Michelob. Such beers are intentionally brewed over-strength and then "watered down" to the intended level, creating a product of equal or greater quality. The lawsuit was dismissed.
Of Anheuser's top executives, only three remained in their jobs following the acquisition: Dave Peacock as president of the merged company's US division; Gary Rutledge as general counsel for the company's North American business; and Bob Golden, Anheuser's former acquisitions head, as global head of the merged company's mergers and acquisitions effort.
Operations and products
Anheuser-Busch Companies operates as one of several subsidiaries in the North America zone unit of AB InBev, and it produces and distributes hundreds of products from the AB InBev portfolio.
Since January 2012, Luiz Fernando Edmond has been the president of Anheuser-Busch Companies, and he concurrently is the AB InBev North America zone unit president (a position which he has separately held since the acquisition of Anheuser-Busch in 2008). Previous corporate leaders of Anheuser-Busch include:
- 1860–1880 Eberhard Anheuser
- 1880–1913 Adolphus Busch
- 1913–1934 August A. Busch, Sr.
- 1934–1946 Adolphus Busch III
- 1946–1971 Gussie Busch
- 1971–1974 Richard A. Meyer
- 1974–2002 August A. Busch III
- 2002–2006 Patrick Stokes
- 2006–2008 August A. Busch IV
After Anheuser-Busch's acquisition by InBev, August A. Busch IV was replaced as the subsidiary president by Dave Peacock.
- 2008–2012 Dave Peacock
- 2012–present Luiz Edmond
Anheuser-Busch Companies operates 12 breweries, all located in the United States:
- St. Louis, Missouri (opened 1852)
- Newark, New Jersey (opened 1951)
- Los Angeles (opened 1954)
- Houston, Texas (opened 1966)
- Columbus, Ohio (opened 1968)
- Jacksonville, Florida (opened 1969)
- Merrimack, New Hampshire (opened 1970)
- Williamsburg, Virginia (opened 1972)
- Fairfield, California (opened 1976)
- Baldwinsville, New York (opened 1983)
- Fort Collins, Colorado (opened 1988)
- Cartersville, Georgia (opened 1993)
The St. Louis brewery, which opened in 1852, is a National Historic Landmark District, and includes three buildings listed as National Historic Landmarks. Free public tours of the brewery are given. The tour takes visitors through the complex where they can see beer being made and packaged (not a part of the free tour, but is a part of the $10 Day Fresh Tour) in a working part of the brewery. The company keeps a rotation of its famous Budweiser Clydesdales at its headquarters, and visitors to the brewery can observe the clydesdales in their exercise field and see their places in the carriage house.
The brewery was designated a National Historic Landmark in 1966. The landmarked area includes 189 structures spread over 142 acres (57 ha), including many red brick Romanesque ones "with square crenelated towers and elaborate details." The Brew House, built in 1891–1892, is particularly notable for its "multi-storied hop chandeliers, intricate iron-work, and utilization of natural light".
Aside from supply operations like brewing and packaging, Anheuser-Busch Companies includes Anheuser-Busch Wholesale Operations Divisions (WOD), Anheuser-Busch Agricultural Operations, Anheuser-Busch Recycling Corporation, Eagle Packaging, and Busch Properties, which manages subsidiary-owned property. Suppliers to Anheuser-Busch Companies include Owens-Illinois, which provides glass bottles to several Anheuser-Busch breweries. Anheuser-Busch also owns glass production facilities, such as the former Longhorn Glass, which provides glass for the Houston brewery. Anheuser-Busch Companies delivers its products to retailers through a network of more than 500 independent wholesalers and 13 wholly owned distributors.
On 21 March 1996, the club was sold to a group of private investors.
In 1966, Busch Memorial Stadium was paid for and built by the brewery and opened for business. The stadium was demolished in late 2005 and replaced by a new ballpark in 2006. Anheuser-Busch signed an agreement to retain the "Busch Stadium" name on the new building through 2025.
Up until 2009, Anheuser-Busch was also one of the largest theme park owners/operators in the United States, with ten parks throughout the country through its entertainment division, Busch Entertainment Corporation, including its 3 SeaWorld locations.
Anheuser-Busch Companies is responsible for the production, importation and distribution of several AB InBev products, including three company-designated global brands, Budweiser, Stella Artois, and Beck's. Other multi-country brands distributed or produced by Anheuser-Busch Companies include Leffe and Hoegaarden, while local brands produced by the company include Bass Pale Ale, Bud Light, Busch Beer, Landshark Lager, Michelob, Natural Light, and Shock Top. The company also produces nonalcoholic beverages, malt liquors (such as King Cobra and Hurricane), and flavored malt beverages (e.g. the Bacardi Silver family and Tequiza).
Prior to its acquisition by InBev, the company was known in the United States for its advertising presence, including a sports marketing division which created advertising material for the Super Bowl and many other sporting events. Budweiser has sponsored horse racing events and motor sports including NASCAR, the "Miss Budweiser" racing hydroplane, and the "Budweiser King" championship top fuel dragster of Kenny Bernstein.
Since the acquisition by InBev, significant cuts in advertising plans have been rolled out, predicated on the belief that "changing demographics and media habits no longer require spending as much on mainstream sports events".
Spykes Underaged Alcohol Marketing
In 2007, the company introduced a flavored 12% abv malt liquor under the name Spykes. It was sold in colorful, 2-ounce bottles. Available flavors included mango, lime, melon and chocolate. It was withdrawn in the same year after criticism from alcohol industry watchdog groups that it was being marketed to underage customers, and the Alcohol and Tobacco Tax and Trade Bureau found that the labeling of Spykes was illegal.
In 2002, the Political Economy Research Institute ranked Anheuser–Busch 40th among the "Toxic 100", a list of U.S. corporations most responsible for air pollution. The study found that Anheuser–Busch released 1,002,786 kg (2,213,657 lbs) of toxic pollutants annually into the air. This is mainly because large amounts of CO2 are released during the process of fermentation.
Anheuser-Busch has received numerous awards for its efforts to reduce its impact on the environment. In 1995 Anheuser-Busch's Baldwinsville brewery won an award for pollution prevention from the New York Governor for its use of a "comprehensive, energy-producing pollution-prevention system – bioenergy recovery – to treat wastewater from the brewing process." The brewery also reduced solid waste by nearly 70 percent from 1990 to 1994. In addition, the Baldwinsville brewery found markets for previous "waste" materials used in the fermentation of Anheuser-Busch beers. The Anheuser-Busch Recycling Corp. recycled more than 27 billion cans in 2006, a number far greater than what was used in its own packaging. Similarly, Anheuser-Busch has set short-term goals to reduce energy consumption 5% and increasing use of renewable fuel from 8 to 15% by 2010. Along with these goals, Anheuser-Busch has succeeded in cutting down its water use by 3% since 2002. Anheuser-Busch is investigating several other renewable energy possibilities such as biomass, wind, solar, and landfill gas as a fuel to reduce the company's environmental impact. The Corporation has also made commitments to decrease its greenhouse gas emissions "by 5 percent from its 2005 baseline by 2010 as part of its membership in the U.S. Environmental Protection Agency's Climate Leaders program."
The brewery also operates an environmental outreach program to encourage recycling, energy conservation, and habitat preservation, as well as to prevent littering and water pollution. For past 18 years Anheuser-Busch employees have participated in "Green Week", which focuses on environmental conservation education for employees and their families.
Anheuser-Busch states they do not use animal derived products, artificial ingredients, additives or preservatives at any stage of the brewing process or as part of the packaging in any of their range, with the exception of three Michelob products and two Bud Light products, which contain honey and shellfish respectively, and are marketed as such. All other Anheuser-Busch beers are brewed using water, yeast, barley malt, hops, and additional cereal grains. Anheuser-Busch eliminates the need for isinglass finings by settling and removing particles before fermentation. The beechwood aging process also helps to attract and remove yeast from the brew before the lagering process has ended. This only applies to the beers the company brews itself.
In 2003, after numerous deaths in football stadiums, Brazil passed a law outlawing alcohol sales in stadiums. FIFA demanded that Brazil allow alcohol sales at the 2014 FIFA World Cup because Budweiser, a major World Cup sponsor is the "Official Beer of the FIFA World Cup", a role it has played since 1986.
"Up for Whatever" beer campaign controversy
In April 2015, Anheuser-Busch, in an effort to target new, younger consumers to buy its products, the company printed a slogan on Bud Light bottles that said "The perfect beer for removing 'no' from your vocabulary for the night. #UpForWhatever." The label triggered a backlash, and the company was immediately criticized by people who charged that it could be interpreted as promoting rape. Alexander Lambrecht, Vice President of Anheuser-Busch, later apologized in a statement for the bottle tagline, saying that the message "missed the mark" and that they would never "condone disrespectful or irresponsible behavior."
Liquor Law Violations in Seattle
The Washington State Liquor and Cannabis (WSLCB) board issued a $150,000 violation to Anheuser-Busch in May, 2016. Investigators determined that Anheuser-Busch entered into an illegal agreement of exclusivity with two concert venues in Seattle - the Showbox and the Showbox SoDo.
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