burma to myanmar - a reintroduction of ab inbev stella artois
TRANSCRIPT
Introduction
• Anheuser-Bush InBev� (NYSE: BUD, Euronext:
ABI)� Founded in 2008
• Stella Artois� Belgian Pilsner� Introduced in 1926
• Myanmar (Burma)� Transition to Democracy
(2011-Present)� Evolving Economy
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Myanmar (Burma)• Population: 56,320,206 • GDP / Capita: $4,700
(170th in the world)• Socialist Military
Dictatorship (1962-2011)� Global economic sanctions
and embargos
• Transition to Democracy� Multi-party elections� Economic liberalization
• Currency: Myanmar Kyat (MMK)� 1247.65 Kyat per USD 3
Political Risk• Civil Unrest / Conflict� Ethnic and religious tension
leading to civil war and terrorism
� Kachin and Rakhine states• Possible return to a
military state and subsequent expropriation
Currency Risk• Trade deficit• Inflation• Low natural gas prices� 37% of total exports� Source of investment
Anheuser-Busch InBev• “Bringing people together for a
better world”• Largest Brewing Company in
the World� 20% of global share� 30% if AB InBev SAB Miller
M&A goes through� Top 5 Consumer Goods Companies
• Focused Branding• Distributes Products in over 110
Countries• Emerging Markets make up 53%
of AB InBev’s total revenue in 2014 4
31.1% 28.7% 26.4%
30.3% 28.0% 27.3%
9.4% 8.7% 8.0%
13.0% 11.2% 9.7%
14.3% 15.4% 18.0%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014
AB InBev Volume by Region (% of Total)
Global Export & Holding Companies
Asia Pacific
Europe
Latin America South
Latin America North
MexicoNorth America
Historical Entry Strategies
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Distribution Channels
• Brewery to customer (Belgium)
• Wholesalers to customers� Legal reasons (USA & Canada)� Historic market practice (China & Russia)
• Third-party distributor (Brazil & Mexico)
2015
Acquisition HistoryMergers & Acquisitions
Joint-Ventures
Equity Based Partnerships
Cooperative Export Model
Licensing
Entry Strategy For Myanmar• Acquire Mandaly Brewery to immediately gain 4% of the market share� Approximately 150 Million USD � Assuming continued 4% market share, and current
growth of market, the acquisition would generate 150 million in revenue by year 5
� Use plant to start brewing Stella Artois� Gaining more market share
• Construct a larger more advanced plant outside of Yangon within the first year• Combining AB InBev’s industry knowledge and economy of scale with Mandalay Brewery’s local know-how
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Myanmar Beer Market• Market Size� 265 million USD market in 2013� 80% of adults in Myanmar drink beer
• Market Growth� Projected to grow to 675 million USD in 2018
� A CAGR of 16.9%
• Market Needs� A pilsner� A premium international beer brand
• Market Trends� Growth of foreign beverage companies� Coca-Cola now controls 50% of the
carbonated beverage market, before 2012 the drink was only available if smuggled 7
0.001.002.003.004.005.006.007.008.009.00
0100200300400500600700800900
1000
2013 2014 2015 2016 2017 2018 2019 2020
Myanmar Beer Industry (Million USD) Liters per Capita
Year1(2016)
Year2(2017)
Year3(2018)
Year4(2019)
Year5(2020)
EstimatedMarketSize(AnnualRevenueMillionUS$)
464.38 559.87 674.99 813.79 981.13
EstimatedMarketShare
4% 5% 6% 8% 10%
EstimatedRevenue(MillionUSD)
18.58 27.99 40.50 65.10 98.11
Understanding AB InBev’s Edge
Strengths-Economy of Scale Advantage-Brand Recognition-History of distribution channel design
Weaknesses-Government Presence in Beer Industry-Low income per capita-Large marketing required
Opportunities-High projected annual growth rates in the market-Early entrance
Threats-Downward currency pressure-Political risk (military government, human rights violations)-Expropriation
SWOT
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Competitor Analysis• Myanmar Brewery Limited
� 45% owned by the Government� 55% owned by Kirin Holdings after buying
shares from F&N for 560 million USD
• Dagon Beverage Company� Joint-venture between the State, Myanmar
Golden Star Company and Bermuda Brewinvest
• Mandalay Brewery� Founded in 1859
• Heineken� 2015 60 million USD investment
• Carlsberg� 2015 70 million USD joint-venture
• Chang (2013)
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83
413
2013 Market Share
Myanmar Brewery LimitedMandalay BreweryDagon Beverage Company Limited
International Market Entrants
(Thailand) (Netherlands) (Denmark) (Japan)
Customer Analysis• Beer makes up 82% of alcohol
consumption in Myanmar� Most of which is consumed at
“Beer Stations” during European soccer matches
� Or in cities, purchased for home consumption from small stores
• Males make up a vast portion of the Myanmar beer market� Men who drink consume roughly
10.3 times more then women who drink
• Tourists� Restaurants, resorts, and newly
emerging nightlife� Increase in tourism 10
791505 816369 10589952044307
3081412
7000000
2010 2011 2012 2013 2014 2020 (Projected)
Annual Tourism in Myanmar
Marketing Mix• Price� Average domestic draught (.5 lt) $1.00 � Average imported bottle (.3 lt.) $1.3-2.50
• Promotion� Electronic Billboard� Soccer partnership (Man U)� Cap Rewards� Marketing to Women
• Place� Domestic Consumers (Yangoon and
Mandalay)� International Consumers
� Hotels, restaurants, clubs, tourist sights, etc.
• Product� Stella Artois bottles and kegs 11
Conclusion• Myanmar is economically liberalizing and politically democratizing at a fast rate� Political and currency risks still remain
• State owned joint-ventures control a large majority of the market� High marketing costs required in order to gain market share
• Logistical constraints• A largely untapped international beer market with projected exponential market growth• Acquisition of Mandalay Brewery and construction of a new plant will have immediate impact on AB InBev’s top-line and local market success.
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