Anheuser-Busch

• 1. Introduction

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  Anheuser-Busch is an American brewing company headquartered in St. Louis, Missouri, and it employs more than 19,000 people. Its story begins in 1852, when a German American brewer and saloon operator named George Schneider opened the Bavarian Brewery on Carondelet Avenue in South St. Louis. In 2008 the company that grew from that small start was sold to a rival brewer in an all-cash deal worth almost $52 billion. How did a modest brewery in South St. Louis become a national institution? Who were the people who built it, and what tricks of transport and marketing set it apart? What happened to a family-run business when outsiders took control? And why has a beer maker so often ended up at the center of public arguments?

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• 2. Soap Maker And Son-In-Law

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  In 1860, a pharmacist named William D'Oench and a German-born soap manufacturer named Eberhard Anheuser bought a brewery that was on the brink of bankruptcy. Schneider's brewery had moved to a new brewhouse in 1856. The following year, money troubles forced its sale, and it passed through several owners during the late 1850s.

  D'Oench stayed a silent partner for nine years. In 1869 he sold his half-interest to Anheuser's son-in-law, Adolphus Busch. Busch was a wholesaler who had immigrated from Germany to St. Louis in 1857, and he married Anheuser's daughter Lilly in 1861. After serving in the American Civil War, he went to work as a salesman at the brewery. Once he bought D'Oench's share, he became company secretary and held that post until his father-in-law died.

  The firm's name changed along with its owners. From 1860 to 1875 it was E. Anheuser & Co. From 1875 to 1879 it was the E. Anheuser Company's Brewing Association. In 1879 it became the Anheuser-Busch Brewing Association. When Anheuser died in 1880, Busch became company president, and the Busch family kept full control for generations afterward.

  Busch's real ambition, though, was measured less in St. Louis barrels than in how far a bottle of beer could travel.

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• 3. Rails And A Borrowed Name

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  By 1877, Anheuser-Busch owned a fleet of 40 refrigerated railroad cars. Busch was the first American brewer to use pasteurization to keep beer fresh. He was also the first to use mechanical refrigeration together with refrigerated railroad cars, which he introduced in 1876, and the first to bottle beer on a large scale. Reaching distant customers drove demand, and production climbed from 31,500 barrels in 1875 to more than 200,000 in 1881.

  In 1878 Busch set up the St. Louis Refrigerator Car Company to build, sell and lease the cars. It owned 200 of them by 1883 and 850 by 1888. To move those cars in and out of the St. Louis brewery, Anheuser-Busch founded the Manufacturers Railway Company in 1887. That short railroad kept running until 2011, when the brewer shut it down.

  During the 1870s, Busch toured Europe to study new brewing methods. He was especially interested in the success of pilsner beer, including a popular Budweiser brewed in the town of Budweis. In 1876 he borrowed the well-known name Budweiser for his own new beer, even though it had no connection to Budweis. Because the company could ship bottled beer so widely, American Budweiser became the first national beer brand in the United States. It was marketed as a premium beer.

  Busch also understood the value of free gifts. In the 1880s and 1890s he handed out bottle openers, calendars, corkscrews, pocketknives, postcards and prints. The best known was Custer's Last Fight, a lithograph of a painting by the St. Louis artist Cassilly Adams. In 1896 Busch sent thousands of copies to bars. More than one million were eventually printed, and the picture became "one of the most popular pieces of artwork in American history." That same year the company launched a "super-premium" brand called Michelob.

  In 1905 the company built a new stockhouse in St. Louis, and by 1907 it was producing nearly 1.6 million barrels of beer. Yet a growing movement to ban alcohol was already gathering force.

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• 4. Surviving Prohibition

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  In 1908, Anheuser-Busch introduced Bevo, a malt beverage with no alcohol or very little. It was one of several near beers the company made as demands for prohibition grew, and it was the most successful of them.

  Adolphus Busch died in 1913, and control passed to his son, August Anheuser Busch Sr. The new leader kept fighting the prohibitionists. As part of an effort to make drinking seem respectable, he built three upscale restaurants in St. Louis during the 1910s. They were the Stork Inn, the Gretchen Inn, which is now known as the Feasting Fox, and the Bevo Mill.

  The Temperance movement and then Prohibition still dealt the company a major blow, from the 1910s through the 1930s. To stay in business, it sold brewer's yeast, malt extract and ice cream, along with Bevo.

  The company recovered strongly. In 1957 Anheuser-Busch became the largest brewer in the United States. That milestone fell within the years from 1946 to 1971, when Gussie Busch led the company.

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• 5. Beyond The Brewery

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  On the 20th of February 1953, Anheuser-Busch bought the St. Louis Cardinals major league baseball club. It owned the team until the 21st of March 1996, when it sold the club to a group of private investors.

  The brewer also built the team a home. Busch Memorial Stadium opened in 1966, paid for and built by the company. In 1981 Anheuser-Busch bought the stadium for $53 million and dropped the word Memorial from its name. The stadium was demolished in late 2005 and replaced by a new ballpark in 2006. The company agreed to keep the Busch Stadium name on the new building through 2025, and later extended those rights through the 2030 season.

  Until 2009, Anheuser-Busch was also one of the largest theme park operators in the United States. Through its entertainment division, Busch Entertainment Corporation, it ran ten parks across the country, including three SeaWorld locations.

  Advertising was another arena. Before the InBev era, the company had a sports marketing division that created advertising for the Super Bowl and many other sporting events. Budweiser sponsored horse racing and motorsports, including NASCAR, the Miss Budweiser racing hydroplane and the Budweiser King top fuel dragster of Kenny Bernstein.

  In 1981 the company created Anheuser-Busch International to handle its overseas operations and equity investments. Chinese production began in 1997, after the purchase of a local brewery. Later the company ran the Budweiser Wuhan International Brewing Company and the Harbin Brewery, which it fully acquired in 2004. In the United Kingdom, the Budweiser Stag Brewing Company made and packaged Budweiser at the Stag Brewery in Mortlake. Before 2008 the company operated 15 breweries abroad, 14 in China and one in the United Kingdom. It also held stakes in Grupo Modelo in Mexico, Tsingtao Brewery in China, Redhook Ale Brewery of Seattle and Widmer Brothers Brewery of Portland.

  At home, the St. Louis brewery was designated a National Historic Landmark in 1966. The protected area covers 189 structures across 142 acres. Many are red brick Romanesque buildings "with square crenelated towers and elaborate details." The Brew House, built in 1891-1892, is notable for its "multi-storied hop chandeliers, intricate iron-work, and utilization of natural light." Visitors on public tours can walk through a working part of the brewery. They can also see the Budweiser Clydesdales in their exercise field and watch for their places in the carriage house.

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• 6. Hostile Takeover

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  On the 12th of June 2008, the Belgian-Brazilian brewer InBev announced a US$46 billion offer for Anheuser-Busch. Accepting it would join two of the world's four largest brewers by revenue. The result would brew three of the highest-grossing beers anywhere: Bud Light, Budweiser and Skol. InBev promised that no American brewery would close and said it would try to keep managers and board members from both companies.

  Anheuser-Busch rejected the bid on the 25th of June 2008. It proposed restructuring the company to keep its shareholders and its United States headquarters in St. Louis.

  The fight then moved to shareholders and the courts. On the 1st of July, InBev urged shareholders to back the buyout at $65 per share, arguing that the offer looked reasonable as the stock market fell. It had already sued in Delaware to make sure stockholders could remove Anheuser-Busch's 13 board members. On the 7th of July, Anheuser-Busch sued InBev to stop it from courting shareholders, calling the offer an illegal scheme. It also accused InBev of concealing that it did business in Cuba, which might create obstacles in the United States.

  Six days later, on the 13th of July 2008, the two sides announced a deal at $70 per share, pending shareholder and regulatory approval. Anheuser-Busch would receive two seats on the combined board. The new company would unite the makers of Budweiser and Michelob with the producers of Beck's, Stella Artois, Hoegaarden, Leffe, Bass, Labatt and Brahma. Combined yearly sales topped $36.4 billion, ahead of the London-based brewer SABMiller, which had been the largest.

  The takeover was completed on the 18th of November 2008. The parent was renamed Anheuser-Busch InBev, and Anheuser-Busch became a wholly owned subsidiary inside its North America zone unit.

  Grupo Modelo then took InBev to arbitration for more than a year and a half, trying to block the deal. In July 2010, a panel ruled that the takeover did not violate Anheuser-Busch's agreement with Modelo.

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• 7. Life Under InBev

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  By early 2009, one account said, AB InBev had "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." The new owner immediately laid off 1,400 employees and 415 contractors and sold the company-owned aircraft. It introduced performance-related pay and, later, zero-based budgeting.

  Perks disappeared. Senior managers lost their executive assistants, and the company stopped contributing to the salaried employee pension plan. It ended life insurance for retirees, tuition reimbursement and severance packages. It took back 1200 Blackberries. Free tickets to St. Louis Cardinals games and to Busch Gardens were withdrawn, and free beer for employees and theme park visitors stopped.

  The company also changed how it paid suppliers. It announced it would take 120 days to settle bills instead of 30, and the clock often starts only when an invoice is approved internally. Suppliers voiced concern. Meanwhile, a 10-year lease on 31,500 square feet of office space on Park Avenue in New York set off speculation that North American headquarters might leave St. Louis.

  The cuts were meant to pay down the debt that financed the merger. It fell from $56.6 billion in 2008 to $30.1 billion at the end of 2012. Assets were sold to help. These included Anheuser's 27% stake in China's Tsingtao, some can and lid plants sold to Ball Corporation, and a Korean beer business sold for $1.8 billion to the private equity firm Kohlberg Kravis and Roberts & Co. On the 7th of October 2009, the company announced a plan to sell the theme parks to The Blackstone Group. That division is now known as SeaWorld Parks & Entertainment. Advertising shrank too, on the belief that "changing demographics and media habits no longer require spending as much on mainstream sports events."

  When the restructuring ended, only three senior Anheuser managers remained. Dave Peacock became president of the merged company's US division. Gary Rutledge became general counsel for North America. Bob Golden, formerly Anheuser's acquisitions head, became global head of mergers and acquisitions.

  In February 2013, a widely publicized lawsuit accused AB InBev of watering down Budweiser and Michelob. The suit was dismissed. On the 10th of October 2016, a $100 billion merger between Anheuser-Busch InBev and SABMiller closed. Today Michel Doukeris is CEO of the parent company, and Brendan Whitworth is CEO of the Anheuser-Busch subsidiary.

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• 8. Backlash And Boycotts

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  In 2007, the company introduced Spykes, a flavored 12% malt liquor sold in colorful 2-ounce bottles. Flavors included mango, lime, melon and chocolate. Alcohol industry watchdog groups said it was marketed to underage customers, and the Alcohol and Tobacco Tax and Trade Bureau found its labeling illegal. The company withdrew it the same year.

  Brazil in 2003 passed a law banning alcohol sales in stadiums after numerous deaths at soccer matches. FIFA demanded alcohol sales at the 2014 World Cup, because Budweiser, the "Official Beer of the FIFA World Cup" since 1986, was a major sponsor. Brazil passed a law paving the way, nicknamed the "Budweiser Bill."

  In April 2015, a slogan on Bud Light bottles urged drinkers to remove "no" from their vocabulary for the night, with the hashtag #UpForWhatever. Critics said it could be read as promoting rape. Bud Light's vice president Alexander Lambrecht said on Twitter that the company had "missed the mark."

  In May 2016, the Washington State Liquor and Cannabis Board issued a $150,000 violation. Investigators found that Anheuser-Busch had made an illegal exclusivity agreement with two Seattle concert venues, the Showbox and the Showbox SoDo.

  Early February 2017 brought a Super Bowl commercial called "Budweiser - Born the Hard Way," which showed founder Adolphus Busch's immigration from Germany to St. Louis. Conservative critics read it as a political statement. The ad had been conceived eight months earlier, and its script reached a twelfth revision after the November elections. Filming took place in January.

  On the 21st of March 2019, rival MillerCoors sued over a Bud Light Super Bowl LIII commercial that said Miller Lite and Coors Light contain corn syrup. MillerCoors argued that corn syrup is used only as a fermentation aid. In 2020 the Seventh Circuit sided with Anheuser-Busch, noting that Miller listed corn syrup on its ingredients list.

  The largest backlash began on the 2nd of April 2023, when Bud Light faced a boycott after partnering with the transgender influencer Dylan Mulvaney. Marketing vice president Alissa Heinerscheid took a leave of absence on the 21st of April. By July, a YouGov survey put Bud Light's popularity at 14th among American beer brands. Anheuser-Busch laid off hundreds of workers at its United States sales offices. In August, it reported that second-quarter United States revenue had fallen more than 10 percent, mainly from the Bud Light decline, and operating profit had dropped by nearly 30 percent. In February 2024, CNN Business reported that the parent company might have lost up to $1.4 billion in sales.

  In 2025, Anheuser-Busch ended 30 years as the main corporate sponsor of St. Louis PrideFest. In response, several St. Louis LGBTQ and ally bars announced they would stop carrying its products.

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