Life in the Fast Lane, 1945–1971

Although Artois and Piedboeuf were relatively spared by the bombings of the Second World War, both breweries had to struggle with a very difficult economic environment in the immediate post-war years. Due to massive investment, organizational capabilities, and clear-sighted management, they were able to overcome the scarcity of raw materials, increasing state regulations, and sluggish consumption. They entered the following decades with a common drive for expansion, diversification, and internationalization. While Artois became the largest European beer producer at the end of the 1960s, Piedboeuf experienced a staggering performance by reaching the second national position. Despite their different production levels, the breweries showed growing signs of convergence. The nature of their managerial culture and the form of their structure, however, were still very distinct and had to face several phases of readjustment to cope with their respective strategy.

Epilogue

After the IPO and the Bass dealings, Interbrew was put under a microscope by the media and investors. Beck’s in Germany was the next big move in rolling up the remainder of Western Europe. Beck’s was an acquisition of major importance: it was a very visible brand with popularity outside of Germany, the competition for its take-over was fierce, and above all the acquisition was highly mediatized. The acquisition was already announced in August 2001, but the deal was not closed until February 2002. At the time, Interbrew’s image had already taken a hit following the Bass fiasco. It was therefore in dire need of a win. Unfortunately, the media and stock market felt they paid an exaggerated multiple for the brewery. Indeed, the price was almost double of what had been put on the table during the first rounds of negotiations, but, the board—especially in favour of the take-over—and the management believed in the brand’s strength and future potential. Some months later, in late 2002, Interbrew was penalized by investors after it failed to properly communicate a lower EBITDA than predicted. What would not have been a real problem before, had a direct effect on the stock price of the company. The reality of the post-IPO era made it clear that both management and board would have to adapt their communication and style....

From Local to Global, 1987–2000

From the mid-1980s to the turn of the century, the brewing industry transformed dramatically from a local to a highly international or global industry. The official merger group of Artois and Piedboeuf, renamed Interbrew, would play a leading role in this transformation. From its historical position in Western Europe, the group spread its tentacles to Central and Eastern Europe, acquiring brewery after brewery. This chapter recalls the history of the Interbrew group in its rise to a world leader. A first major milestone in this route towards global dominance was an acquisition across the Atlantic of Canada’s largest brewer, Labatt’s, in 1995. In some fifteen years, Interbrew completed a total of no less than forty acquisitions. Meanwhile, the company revamped on all levels. Besides a dance of CEOs in the 1990s, modern management techniques came to the front and the board and shareholders’ structures were professionalized. Decentralization and localism remained at the centre of the group’s corporate strategy, effectively becoming the world’s local brewer.

The Secret Alliance, 1971–1987

This chapter opens with the signature of a secret share swap between Belgium’s two leading brewing companies in 1971. Under this furtive agreement, the dynamics of which are analysed in detail, the breweries see their domestic market share grow even more, to about 60 per cent, and continue the foreign expansion started in the two previous decades, in Europe and Africa. In Belgium, Stella Artois tumbles under the effect of reputation and product quality issues while Piedboeuf surges with the help of its star brand, Jupiler. These evolutions put the corporate governance of Artois and the secret association under strain. In 1987 the two companies end up openly merging under the name Interbrew, following a strategic rethinking of the group’s strategy, structure, and corporate governance as well as a destabilizing tax scandal.

A Traditional Industry Switches Gears, ca. 1850–1914

Several inventions completely transformed and revolutionized the ancient craft of brewing in the nineteenth century. Among the most important ones: the introduction of steam in the brewing process, a better understanding of yeast and its working, the invention of artificial refrigeration, the breakthrough of glass production, and the scientification and academization of brewing. Lager, a beer style hitherto confined to central Europe, started to spread and supersede traditional ales, creating opportunities which were grasped by several companies, old and new. One was the Artois brewery from Leuven, an already well-established brewery, with a brewing lineage going back to the 1700s. The Piedboeuf brewery from Jupille, on the other hand, was a newcomer in a brewing business in full transformation. This chapter discusses the roots of the two families and their companies that would come to dominate the Belgian and global beer market.

Introduction

The literature on beer as a topic for economic and business history took off in 2009 with the organization of the first Economics of Beer conference at KU Leuven. The publications and (bi)annual gatherings it spawned have helped develop a whole new field of research with a wide scope of analysis, using the products’ linkages with social, legal, technological, and cultural history. Business history’s interest for beer predated the conferences,...

Bridging Two Wars, 1914–1944

At Artois, the family members stepped up in terms of governance and leadership and led the company during both wars. During the First World War, consumers’ taste had changed under English and German influence towards stronger as well as sweet beer. After the war, several breweries mechanized their firms to brew bottom fermented beers, such as Artois’ ‘Stella Artois’ (1926), with hindsight the most successful product of the brewery. Artois became the number one brewery in Belgium by 1936 thanks to important investments. A major expansion programme and improvements to the brewery lifted Piedboeuf to a top sixteen status by 1938. Artois expanded its distribution network through several acquisitions of breweries and their pubs, while Piedboeuf was more involved in door-to-door deliveries. Politics of branding and other marketing practices took place on a larger scale. In this respect, in 1933, Piedboeuf was the first brewer to launch a monthly magazine.

Conclusion

If a business giant such as AB InBev may, at first sight, appear like a faceless corporate monolith, this book has sought to uncover the many personal and collective stories that together contributed to create the colossus it has become. The rise of Artois, Piedboeuf, and their successors from local players to world leadership is a complex and contrasted story, convoluting through time under changed shapes, names, and strategies, but whose contours are delineated by enduring traits. Oriented by influential shareholder families and steered with a strongly entrepreneurial compass, the companies did not follow a linear path, but rather followed the difficult meanders of longevity, learning from both failures and successes....