The Consumer – Q4 2015 deals summary

No small beer…

The fourth quarter – and indeed the year – was dominated by the AB InBev proposed acquisition of SABMiller, which will be a genuine game-changer that will totally reshape the beer sector. In 24 of the world’s 30 largest beer markets, the new business will have the #1 or #2 positions, and will produce around a third of the world’s beer (notwithstanding likely disposals). As for those divestments, Molson Coors has already acquired the 58% stake in MillerCoors it didn’t already own, and at $12bn that in itself was the sixth largest deal in consumer goods last year. In addition, we have also just seen Asahi agree to acquire SABMiller’s Peroni and Grolsch brands.

Another major deal in the last quarter was the acquisition by a consortium including investment vehicle JAB Holdings of Keuring Green Mountain. It was the biggest deal in the coffee segment to date, and JAB have now added the US-based pioneer of singleserve coffee pods to their other consumer brands, including Jacobs Douwe Egberts, and a majority stake in the cosmetics firm Coty Inc. Coty also acquired the Brazilian cosmetics business Hypermarcas SA, which follows the acquisition of P&G’s beauty business in Q3. Niche segments like health foods and craft beer also saw continued interest in the quarter, with Pinnacle Foods acquiring the natural foods manufacturer Boulder Brands, and Constellation Brands picking up the craft brewer Ballast Point Brewing. As we discuss in our publication, the Consumer, AB InBev also brought the craft brewer Camden Town, a crowd funding success story.

Where now for the beer sector?

Every few years there’s a deal that reshapes an entire industry; AB InBev/SABMiller is clearly one of those deals, so what does it mean for the rest of the sector? With such a dominant player, the other beer businesses will have to respond. One option is to consolidate in their turn; another is to seize the opportunity by acquiring strong brands that may have to be divested as part of the AB InBev/SABMiller approval process. This could allow the other beer players to either consolidate in specific markets or categories, or diversify into new ones, craft beer being one of the most notable examples. The major brewers want a piece of this as well, as the AB InBev purchase of the Camden Town Brewery proves, and SABMiller have also bought Meantime in recent months. So even in the face of such a major merger, opportunities remain at both ends of the scale: both from consolidation, and specialisation.

The other factor that will take longer to play out is the impact on raw materials sourcing and distribution. AB InBev/SABMiller will have massive purchasing power here, and smaller players will need to think smart to ensure they don’t get crowded out.

And finally, drinks in general. Major multinationals like Diageo have beer brands of their own, and will also be watching closely to see whether AB InBev/SABMiller can reverse the trend towards lower beer consumption in mature Western markets, or use their new scale and portfolio to challenge other drinks categories in markets like Africa and Latin America.


To learn more about some of the key trends in the Consumer Goods sector, read our latest edition of 'the Consumer'.

How do you see the rest of 2016 playing out? Share your thoughts below or schedule a meeting to discuss your situation in confidence.

Richard Hughes |  Director, Transaction Services
Profile | Email |  +44 (0)20 7212 3685


More articles by Richard Hughes

Emily Johnson |  Manager, Transaction Services
Profile | Email |  +44 (0)7725 633 114


More articles by Emily Johnson