Anheuser-Busch InBev to acquire Italy's Birra del Borgo

Discussion in 'Beer News & Releases' started by wesbray, Apr 22, 2016.

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  1. wesbray

    wesbray Initiate (0) Feb 29, 2012 Canada (AB)

    (Press Release) ROME, Italy—Birra del Borgo is happy to announce that it has decided to partner with Anheuser-Busch InBev (AB InBev). The partnership will give Birra del Borgo, one of the leading craft brewers in Italy, a unique opportunity to make the necessary investments for expansion while continuing to independently manage its business and define how to grow.

    AB InBev will provide the support to allow Birra de Borgo to expand its brewery know how and infrastructure, continue to innovate and bring new great beers on the market through its distribution system. Founder Leonardo Di Vincenzo will continue to lead Birra Del Borgo as CEO of the company.

    In 2005, Birra Del Borgo was founded by Leonardo Di Vincenzo in Borgorose, a small town in the province of Rieti on the border between Lazio and Abruzzo in Italy. Leonardo started brewing beer at home for enjoyment while at University studying biochemistry. He traveled frequently throughout Europe to explore the traditional beer styles; getting to know the German and Belgium master brewers was crucial to his education. One of Leonardo’s most formative experiences was brewing at the Starbess brewery in Rome, which later led to his conception of Birra del Borgo. Leonardo’s initial inspiration comes from English & Belgian beers, but he then reinvented the styles to root them in the Italian gastronomy culture. Leonardo currently produces ten beers year round, some famous such as ReAle, Duchessa, DucAle. Other Birra del Borgo products include 4 Seasonals inspired by local ingredients and several unique beers brewed with original techniques, under the “Bizzarre” family. Leo’s inspiration is dictated by the moment and seasonality related to the main ingredient, with a passion to reinvent styles and push boundaries.

    Leonardo will remain the CEO of Birra Del Borgo.

    Leonardo Di Vincenzo said: “Our voyage since we started in 2005 has been a great adventure. Today the beer sector has become very competitive and it necessary for us to make a next step to ensure that we can continue to evolve in terms of brewing techniques and in terms of the complexity and taste variation we can offer to consumers. We believe partnering with AB InBev is a great opportunity to do exactly that: it will allow Birra del Borgo to grow in a sustainable way while staying true to our unique identity and the philosophy that we have followed since the very beginning.

    The partnership with AB InBev will bring us many advantages, from technological improvements and access to scientific research to the possibility to grow from a commercial point of view. Moreover, this partnership also means that we will be able to focus much more on what we enjoy most and do best: creating and experimenting with exciting new beers and pushing the boundaries of beer evolution in Italy.

    He added: “We will continue brewing all of our beers in Borgorose, which will allow us to grow by continuing to invest in our local community, as we have always done. At Birra del Borgo, we have a great team with enormous enthusiasm and love for what we do every day. It is with this team that we start this exciting second chapter in Birra del Borgo’s history. The heart and soul of Birra del Borgo will remain unchanged and it is with the very same passion and love for beer that we will continue Re(Thinking) Ale”.

    Simon Wuestenberg, Country Director for AB InBev Italia, said: “We have been very impressed by what Leonardo and his team have built since 2005. They have been at the forefront of redefining beer in Italy, bringing a unique mix of inspired innovation, quality and consistency. Leonardo’s vision for beer and his passion for brewing will be great inspirations to our whole team, and we’re very excited about partnering up and growing together. As a challenger on the Italian market, we have been successfully developing our business with a great portfolio of premium and specialty brands in the last few years. Today, that portfolio becomes even stronger with some of the best of “Made in Italy”.”

    Through this transaction, Birra del Borgo will become a wholly-owned subsidiary of AB InBev.

    Terms of the agreement are not being disclosed.

    About Birra del Borgo
    Birra Del Borgo was founded in 2005 by Leonardo Di Vincenzo in Borgorose, a small town in the province of Rieti on the border between Lazio and Abruzzo in Italy. Birra del Borgo’s initial inspiration comes from English & Belgian beers, with a reinvention of the styles to root them in the Italian gastronomy culture. Birra del Borgo currently produces ten beers year round, some famous such as ReAle, Duchessa, DucAle. Other Birra del Borgo products include 4 Seasonals inspired by local ingredients and several unique beers brewed with original techniques, under the “Bizzarre” family. Birra del Borgo’s inspiration is dictated by the moment and seasonality related to the main ingredient, with a passion to reinvent styles and push boundaries to (Re)think Ale.

    About AB InBev
    Anheuser-Busch InBev Italia distributes a broad portfolio of international premium beer brands in Italy, including Beck’s, Corona, Bud, Tennent’s Super, Leffe, Stella Artois, Hoegaarden, Spaten and Franziskaner. It is a subsidiary of Anheuser-Busch InBev, publicly traded company (Euronext: ABI) based in Leuven, Belgium, with American Depositary Receipts on the New York Stock Exchange (NYSE: BUD). Anheuser-Busch InBev is the world’s leading brewery, one of the top five companies of consumer goods in the world and first in the beverage industry in the ranking “World’s Most Admired” of FORTUNE magazine.

    The beer, the first social network, brought together people for thousands of years and the portfolio of Anheuser-
    Busch InBev with over 200 beer brands continues to maintain a strong connection with consumers. The dedication of Anheuser-Busch InBev to this cultural heritage and the quality comes from the Den Hoorn brewery in Leuven, Belgium, founded in 1366 and the pioneering spirit of the Anheuser & Co brewery, operating in St. Louis, U.S.A. since 1852. Geographically diversified with a balanced exposure between developed and developing markets, Anheuser Busch InBev leverages the strengths of its approximately 150,000 employees based in 25 countries around the world. In 2015, AB InBev’s revenues amounted to 43.6 billion dollars. The company dreams of becoming the best producer of beer that brings people together for a better world.

  2. Oceanbear1

    Oceanbear1 Initiate (134) Aug 8, 2013 Colorado

    Man it's crazy how many they are buying
    Masters, Nin10dude64, CJNAPS and 3 others like this.
  3. mwa423

    mwa423 Initiate (0) Nov 7, 2007 Ohio

    The thing I find most interesting about this are that they are committing to continuing to make all beer at the same location (it would seem moving production of flagships to Belgium would be a smart move for export)
    drtth likes this.

    JBURGHOST Initiate (0) Mar 9, 2016 New York

    Anything that Anheuser Busch touches turns to crap
    craigerss02 likes this.
  5. JuicesFlowing

    JuicesFlowing Initiate (0) Jul 5, 2009 Kansas

    Pretty soon AB will buy the Earth.
    Loops, Kevinpitts, Brolo75 and 2 others like this.
  6. drtth

    drtth Initiate (0) Nov 25, 2007 Pennsylvania

    Within the US ABInBev has purchased less than 3/10 of 1% of the breweries that make flavorful beers. They now have recently acquired a few outside the US as well.

    I guess the sky is falling after all. *

    (*sarcasm alert)
  7. jcos

    jcos Aspirant (212) Nov 23, 2009 Maryland

    I thought I saw somewhere that AB was linked to the Panama Papers. I wonder if they are trying to make as many transactions as possible quickly...
  8. fredmugs

    fredmugs Initiate (0) Aug 11, 2012 Indiana

    Anybody else look up Birra del Borgo on here and go Meh? I hope AB pisses away more cash into more of those European economic disasters. Does Greece have any large breweries?
  9. wesbray

    wesbray Initiate (0) Feb 29, 2012 Canada (AB)

    I've enjoyed the few brews of theirs that i've tried. They did a tap takeover at Moeder Lambic when I was there. The tobacco porter was interesting.
    Johnct likes this.
  10. HorseheadsHophead

    HorseheadsHophead Poo-Bah (2,515) Sep 15, 2014 Colorado

    I thought Birra del Borgo's Rubus was awesome.
    Johnct and Loops like this.
  11. rgordon

    rgordon Meyvn (1,320) Apr 26, 2012 North Carolina

    I always thought the beers to be way overpriced, but beautifully packaged. I never had a BdB beer that I would buy.
  12. drtth

    drtth Initiate (0) Nov 25, 2007 Pennsylvania

  13. jesskidden

    jesskidden Poo-Bah (2,543) Aug 10, 2005 New Jersey
    Society Trader

    So, the same week they agree to sell SABMiller's Peroni, which had around 20% of the Italian market, to Asahi, AB-InBev buys a 10,000 hectolitre/year (that's a bit over 8,500 US bbl) "craft" brewery in Italy? OK.
  14. NeroFiddled

    NeroFiddled Poo-Bah (13,977) Jul 8, 2002 Pennsylvania
    Society Trader

    Yeah, they're pricey here because of all the extra hands involved, but not over there. I bought a ReAle out of a cooler at a restaurant for €2.10
    Johnct, rgordon and Cameron_como like this.
  15. 1ale_man

    1ale_man Initiate (0) Apr 25, 2015 Texas

    Just sodding their lawn. One plug at a time.
  16. IceAce

    IceAce Savant (931) Jan 8, 2004 California

    Another brilliant response from the annals of another beer elitist.
    Johnct, Loops, bushycook and 10 others like this.
  17. KevinBrink

    KevinBrink Initiate (8) Apr 13, 2015 New Jersey

    Bummer, I find there stuff to be pretty creative, wonder how this will impact their relationship/partnership with Dogfish Head on the Eataly locations and collab beers.
    gillagorilla, Johnct and Loops like this.
  18. degbert

    degbert Initiate (0) Dec 1, 2009 Texas

    We carried them. They were interesting. They died on the shelf.

    And that's the best I can say about their beers -- interesting. They had a curious take on an IPA -- ReAle Extra -- that I thought smelled candied and drank ashy and very dry. The only other one I have had was the 25 Dodeci; that was good, but very big and boozy, with some port wine-like elements.

    I'm sure AB will standardize and mediocritize them to some extent, and I'm sure that BrewDog will pull out of their deal with them as fast as they can.
    rgordon likes this.
  19. LuskusDelph

    LuskusDelph Initiate (0) May 1, 2008 New Jersey

    I'm not a big fan of AB-InBev, but your statement is simply not true.
    Johnct, tzieser, Loops and 4 others like this.
  20. Jugs_McGhee

    Jugs_McGhee Poo-Bah (11,074) Aug 15, 2010 Australia
    Society Trader

    I liked what I tried from this brewery. Curious business move on AB's part, though.
    Johnct likes this.
  21. rgordon

    rgordon Meyvn (1,320) Apr 26, 2012 North Carolina

    If they've touched Ommegang, that's some good crap.
  22. NeroFiddled

    NeroFiddled Poo-Bah (13,977) Jul 8, 2002 Pennsylvania
    Society Trader

    After reading the jabs at A-B, and thinking about the buyouts (and what they might lead to) I thought "who cares?"

    The revolution has happened. It's over. There will always be quality small breweries from this point forward - unless we stop supporting them.

    I might miss some of the beers if they become less than what they once were, and I might miss some of the breweries in general if they're shuttered, but the big breweries can't buy all of them :slight_smile:
    otispdriftwood, Johnct, Loops and 8 others like this.
  23. Oktoberfiesta

    Oktoberfiesta Aspirant (275) Nov 16, 2013 New Mexico

    Support? Partnership?

    They own you. I hate this sort of word play.
    qchic and ImperialStoat like this.
  24. drtth

    drtth Initiate (0) Nov 25, 2007 Pennsylvania

    Frankly one would have to be a rather stupid businessman or team to purchase a successful business just to either lower the quality of its product or shut that business down when it makes a product you don't already offer and that is already selling well. Whatever else people may think of ABInBev executives I don't think they can be said to be wasteful and/or stupid.
    #24 drtth, Apr 22, 2016
    Last edited: Apr 22, 2016
    Loops, LuskusDelph, wspscott and 2 others like this.
  25. threedaggers

    threedaggers Crusader (770) Dec 2, 2013 Kentucky

    "and nothing of value was lost"
  26. ImperialStoat

    ImperialStoat Initiate (0) May 20, 2009 Ireland

    "You just don't know him like I do!"
    mikeinportc likes this.
  27. ImperialStoat

    ImperialStoat Initiate (0) May 20, 2009 Ireland

    BartS and Jugs_McGhee like this.
  28. Euroglot

    Euroglot Disciple (323) Dec 16, 2015 Belgium

    Thay had to sell Peroni because otherwise the financial regulators wouldn't give the go-ahead for the takeover of Sab-Miller. Guess they are trying to 'recreate' the same position with another Italian brewery...
    ONovoMexicano likes this.
  29. kfordham281

    kfordham281 Initiate (0) Oct 29, 2005 Georgia

    This is to make the deal for SAB more appealing to regulators. They had to do the same thing with Corona ( to close the Modelo deal. You'll see this happen in most industries when two large players get together. Essentially they have to strengthen the other players in the market to keep the deal intact.
  30. jesskidden

    jesskidden Poo-Bah (2,543) Aug 10, 2005 New Jersey
    Society Trader

    Yes, I'm aware of why AB-InBev is selling off Peroni along with other SABMiller European assets, the point is instead of winding up with 28% of the Italian market and becoming #1 in the country, they'll stay at 7% - oh, plus 10,000 hl* from this purchase. "OK" means I just can't get too upset at that.:rolling_eyes:

    * There are brewpubs in the US that sell more beer than that.​
  31. mikeinportc

    mikeinportc Poo-Bah (1,909) Nov 4, 2015 New York

    That's Duvel-Moortgat , not AB-Inbev.

    If AB-Inbev did what D-M has done, ~nobody would complain. Ie. allowed greater resources , to expand capacity & repertoire , without sacrificing what made people like the beer. When they bought Ommegang, I was highly disappointed, and leery of what would happen to the beer, but it's the same, if not better.
    HorseheadsHophead likes this.
  32. jesskidden

    jesskidden Poo-Bah (2,543) Aug 10, 2005 New Jersey
    Society Trader

    Duvel-Moortgat bought complete control of Ommegang in 2003 - before that, they'd been one of the minority owners.
    #32 jesskidden, Apr 23, 2016
    Last edited: Apr 23, 2016
    LuskusDelph and drtth like this.
  33. Oceanbear1

    Oceanbear1 Initiate (134) Aug 8, 2013 Colorado

    I do like the shape of their bottles though!
  34. KidAbeer

    KidAbeer Initiate (0) Jan 5, 2016 Italy

    Hi to all, i'm just a fan of craft beer from Italy. "Birra del borgo" for us was one of the symbols of the italian craft movement. They' were born in 1996 (together with Baladin, Birrificio Italiano and other historical italian brand) and by now they were producing about 12 hl/year. Very low for US standard but very high for Italian ones, maybe the best except from Baladin. In italy we don't have big brands in beer world (the only are Menabrea /Forst /Theresianer, but those are very little) and except from craft brewery we don't have nothing. The acquisition of Birra del borgo (as true symbol of craft in italy) by ABInbev is a huge blow for us. Brands like Peroni (Asahi) or Moretti (Heiniken) or Nastro azzuro (Asahi) for us ar just first-price beer, no value, no ethic, no love.

    Birra del borgo was not an economic disaster, it was one of the major craft brewery in Italy, maybe together with Baladin one of the most representative for innovations and culture.
  35. StoneGreg

    StoneGreg Initiate (68) May 16, 2002 California

    If this was truly how big business was able to operate, we'd live in a very very different world. I'm not sure I'm going to be able to explain this fully in the short time I have at the moment, but I'll try my best...

    Large, publicly traded commodity businesses operate under a very very different business model than smaller entrepreneurial companies. If for no other reason than because they must. They have a fiduciary duty to maximize shareholder value. Fail, and you're at the receiving end of shareholder lawsuits, and the leaders of the company don't get their bonuses...or even get the ax.

    Chasing share prices and quarterly earnings reports are a part of the business. One of the principle things of measurement is EBTDA and margins. Commodity is a high margin business (cheap to make, and sells for a pretty decent price...with a lot of marketing dedicated to consumer shaping perception in order to justify that price). Artisan businesses can often be lower margin business. They are not (generally) at risk of shareholder lawsuits, and operate on a pretty different plane of existence. They cannot ignore margins, but are not totally driven by them.

    Famously (well documented) once AB was acquired costs were slashed dramatically. This wasn't just in cutting out private jets, but also in productions costs. Overall volume has gone down. Overall profit has gone up. This was done by increasing margins.

    When you have a product on the corporate books that is low margin, it sticks out like a sore thumb. Managers are incentivized to fix it. They are incentivized with some kind of romantic notion to keep a brand "as good as it was." That's the job for the marketing department, not production. Production focuses on making it as cheaply as possible, and marketing focuses on telling you its as good as it ever was.

    I have a 15 year old half tube of Toms of Maine toothpaste (pre buyout) that I discovered when I helped my mother move recently. I still use the brand today. I thought the current stuff wasn't all that bad. Then I tried the 15 year old tube, and it is light years better than the current stuff. So much so I'm hoarding that blast from the past. I was surprised how far the current version had declined. It was difficult for me to be able to notice...boiling frog scenario.

    It's really really romantic to think that big companies even have the choice to "keep things as they were...because, you know, they'd be stupid not to." It's not one of the options available to that system as brand manager switches to another one and another one over the years, marketing comes up with ideas, production and accounting work to get margins in line, etc. etc.

    There's a reason why small entrepreneurial companies in just about ANY consumer product or service make the "good stuff." They have that choice. Big companies by and large do not.

    Homework assignment: Name a consumer product that was acquired 10 years ago that's "just as good as it always was." It's a challenge. If you think you know one, I ask: Are you sure? You sure that product had sorbitol on its ingredient list before it was bought by the big company? The boiling frog scenario doesn't just fool frogs. (It actually doesn't fool frogs at all, as they jump out, but it does fool people. Even me!)

  36. Bryanweppner-123

    Bryanweppner-123 Initiate (0) Oct 5, 2014 Illinois

    Europe is a huge untapped market for craft..
  37. BakaGaijin

    BakaGaijin Aspirant (275) May 20, 2014 Canada (ON)

    Cantillon removed Birra del Borgo from Quintessence:
    Rollinghops513 likes this.
  38. drtth

    drtth Initiate (0) Nov 25, 2007 Pennsylvania

    Thnaks for the thoughtful contributions to what is really an ongoing discussion popping up in more than one thread. Very helpful.

    The homework assignment may take a while. If only because organizations change or fail to change in response both to multiple internal factors and external factors and it's not always easy to tell the difference from the outside.

    For example, among the widely discussed "cost cutting" measures introduced by InBev's acquisition of AB was cutting the cost of the rice by no longer refusing to use any rice but whole grain rice. This was, here and on other sites, widely interpreted as cutting the quality of the product.

    However, discussions on this site and some other places revealed that:

    First, the same quality of rice from and grown by the same rice farmers in the US is still being used except that broken grains are now allowed so the ingredient does cost less. Second, the experienced home brewers on this site and others claim that allowing some broken grains makes no detectable difference in the quality of beer brewed with rice. Third, all appearences suggest that the early AB insistance on using whole grain rice, which was in place and maintained for many years (almost a century) was as much an early PR "marketing ploy" by A. Busch as it was anything else.

    Hoping you have a busy but also productive day.
    #38 drtth, Apr 23, 2016
    Last edited: Apr 23, 2016
  39. Giovannilucano

    Giovannilucano Disciple (375) Feb 24, 2011 New Jersey

    I am sure most of you may know I champion the Italian craft brewers and the breweries that they have work hard for.

    I am in complete shock over this....

    As many Italian brewers know, it is such a nightmare to have a brewery, one wonders how they make it this far. As
    @KidAbeer mentioned, there is also Baladin, which Teo Musso is such a genius and lover of what he does.

    I believe this decision was based on the fact of the difficulty in starting and maintaining a brewery in Italy.

    Man, I am at a total loss...:slight_frown:
    OldSwampy, cavedave, Johnct and 2 others like this.
  40. wesbray

    wesbray Initiate (0) Feb 29, 2012 Canada (AB)

    ISO: 1991 Toms
    gillagorilla, pjeagles, qchic and 2 others like this.
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