The fight for shelf space heats up

Why would AB-InBev launch one Leffe spin-off after another, roll out zero alcohol beers and buy brands like Kwak and Ginette? The answer is: to claim more space on the beer shelf for its own brands.

Although AB-InBev earlier this year set itself the ambitious target of growing its lower and zero strength beers from a small base to 20 percent of its global volume sales by the end of 2025, the more immediate goal must be to get more brands onto an already crowed beer shelf, especially in Belgium.

On 25 October 2016, AB-InBev launched Jupiler 0.0, the alcohol-free version of the country’s biggest pils brand. Whether the weak Jupiler will sell huge volumes it not the issue, insiders say. Some other brand will have to budge.

Same with AB-InBev’s recent purchase of the Ginette brand, a certified organic beer, which was reported on 21 October 2016. Ginette is the brain-child of four entrepreneurs who first introduced it in 2009. It was contract-brewed by the La Binchoise brewery in Belgium. Allegedly volumes were only 1,500 hl in 2015 but are said to reach 3,000 hl this year. Financial details were not disclosed.

Organic beers are not what you would call hugely popular, but the label “organic” makes Ginette a specialty beer with growth potential. It must be remembered that Belgium’s beer consumption has declined massively for the past twenty years or more and is now down to 72 litres per capita. The only beer styles not affected by the general drop in consumption are specialty beers.

Adding Ginette to the newly acquired Kwak and Karmeliet brands – bought in September for allegedly EUR 200 million – will allow AB-InBev to flex its muscle with the retailers. Guess how the retailers will decide when presented with AB-InBev’s “either or”?