Grolsch Beer

The beer industry is quite a fascinating one. With its many brands, it's no wonder that at times, products that are well-known get acquired and products that barely have a foothold in the industry suddenly have a meteoric rise. In the case of Grolsch, its journey is one of fantastic yet uneven proportions. "Grolsch is a fantastic brand. It's North European, it's got unimpeachable brewing credentials and authenticity and credibility and it's a damn good product" added SABMiller's Marketing Director, Nick Fell (Ghemawat and Mitchell 1) following the takeover in November 2007. 

It stands to reason that much of the rationale behind the acquisition of Grolsch was due to its international notoriety and domestic branding. "Grolsch was already the world's 21st largest global brand. International volume had grown to account for slightly over one half of total volume, and going forward, seemed to offer much more potential. Drinkers often rated Grolsch higher than larger brands, including Heineken, the top global brand as well as the leader in Grolsch's home market" (Ghemawat and Mitchell 1). Much of the beer's evolution has to do with its history being a Dutch brand introduced in the year, 1615. It began to progress when "Theo J. De Groen introduced [the] iconic and trademarked ceramic swingtop bottle, which was advertised as easy to open and allowing storage of beer for later consumption" (Ghemawat and Mitchell 2). This allowed the brand to become quite distinctive in the marketplace and end up by the year, 2007 with "total volumes [of] 3.3 million hectolitres" (Ghemawat and Mitchell 2). Grolsch was maintaining in a beer souk that was full of other appealing and alluring brands, with the potential to catapult business further with celebrity endorsements. 

Grolsch's success was in its differentiation and market selection. It offered a different and diverse perspective from major rivals in terms of beer taste and refreshing marketing quality. "The company emphasized that is malty, relatively bitter taste made it distinctive. It ha[d] a fresher, more herbal hop character than most international lagers and a cleaner malt background" (Ghemawat and Mitchell 2) that most beers period simply did not have. This would allow Grolsch to make a strong statement amongst the beer industry and in key markets across Western Europe, the United Kingdom and the United States. 

What separated Grolsch more so than its growth in volumes was its ability to develop the MABA framework (Market Attractiveness, Business Assessment). This allowed for an analytical examination of what could and could not be done with the brand itself. Moreover, Grolsch could make key decisions based on forecasting in key markets in accordance with their traditional element of sales and marketing (Ghemawat and Mitchell 6-7). Grolsch's relative success as a brand in the beer industry was due to a "wide array of promotional activities, premium prices positioning, selection [of] the best route to the consumer by market, in cooperation with importers, distributors, brewers, and retailers” (Ghemawat and Mitchell 6-7). A company or corporation's success is primarily rooted in the MABA framework as well as the CAGE model, which is an assessment of where to prioritize with regard to the elements of a particular area. Grolsch had to analyze where to place themselves amidst some of the larger brands in the market, which can be posited was an interesting examination, to say the least.

Once a company or corporation such as Grolsch determines where it will place its brand, it has to ensure that the dynamics are right for its brand. "Grolsch resisted aggressive price promotions and emphasized premium products, packaging and ancillaries such as the PerfectDraft dispenser system. [It] relied on on-premise channels more than its rivals and owned six beverage wholesalers that handled half its sales, guaranteed financing of premises and equipment by bar-owners and owned properties operated as bars and restaurants" (Ghemawat and Mitchell 9). In essence, much of the CAGE framework was in accordance with the pros and cons of the particular markets that Grolsch participated in. Grolsch had to weigh both the pros and cons of the sales channels to determine which was best for them as a brand in the various markets.

Yet, in spite of the various modes of planning and proverbial execution within the beer industry, Grolsch did not adapt itself well or rather had limited adaption across several different markets. Hence, even though it was the standard beer bearer in certain markets, and sold at a discount in certain countries, other companies such as Inbev, SABMiller, Anheuser-Busch, Heineken, and Carlsberg had too big of a footprint in the industry. There was a multitude of different deals that would change the landscape of the beer industry starting in 2002.  Grolsch's dilemma was that it did not have a strong and stable distribution element that could keep its success going forward. By "2005, global beer volumes were 1.5 billion hl. Beer markets in developed regions such as North America, Western Europe, and Japan had been flat. Global volume growth was driven by developing regions such as Eastern Europe and Asia Pacific, in both of which volume had grown by more than 5% per year" " (Ghemawat and Mitchell 9-10). Thus, it could be said that because of the global positioning strategy that Grolsch did and their relative analysis of where they would prioritize their efforts fell on deaf ears within the various other brands that were established and were placed to capitalize on consumers. The competition was essentially quite fierce and too fierce for Grolsch to keep up.

Ultimately, what perhaps doomed if that is appropriate verbiage for the Grolsch acquisition in 2007, was its unstable elements and many modes of operation. On paper (i.e. agreements and contracts), it looked and appeared strong and stable, but was quite the opposite in terms of local production, distribution and quite frankly, brand name. While the acquisition in 2007 was noted as friendly and consolidation of the brand was needed (to kind of reign the brand in), the brand perhaps is not as profound as it once was. That is not to say that SABMiller cannot/could not ensure that the brand could be employed to its most efficient and effective capacity, but there was something about the local brand of Grolsch pre-acquisition, that stood out at the onset of their adventures in the beer industry.

Work Cited

Ghemawat, Pankaj, and Jordan Mitchell. "Grolsch: Growing Globally." Case Study 1-33. Print.