I just got back from a lengthy vacation in Brazil. Their most popular beer goes by the brand name Antarctica - and so does their most popular soda pop, guaraná. (Oh how I’m going to miss it. It’s vaguely similar to rock and rye with a Vernor’s-like ginger ale kick, made from a South American fruit. And yes, I’ve tried the American attempt at it, and it’s not the same. But I digress.)
With the name recognition of the three aforementioned American companies, and their expertise at distributing bottles and cans of their products, it would seem natural for them to branch out into the markets they are leaving (ahem) untapped. Hell, you can find Coke logos at the North Pole, I’m sure. If they made a decent macrobrew, it would be huge worldwide.
So, why don’t they? I just don’t buy that they think it will tarnish their wholesome family image. Beer isn’t looked upon that evilly, especially in other countries.
Why doesn’t GM or Ford make motorcycles? They certainly could if they wanted to but that’s a completely different market space.
I think it’s the same thing for Coke and Pepsi. The could make beer, but why would they? It’s a different business with completely different production, distribution and target markets. I know Coca-Cola owns Minute Maid… but I would think that’s about as far as they are willing to venture from the cash cow that is the softdrink industry.
Well, I’d guess there are several reasons you haven’t seen a big push for this.
[ul]
[li]Coke and Pepsi have such market dominance its probably corporate suicide to try and mass market a directly competing product.[/li][li]Even though both products are distributed in a similar fashion, there isn’t much overlap in the production side. It would require massive upfront costs to create the facilities, and to acquire the ingredients in massive quantities to compete with Coke and Pepsi in price.[/li][li]They could open a can of worms if they carried any similar labels or names. Pop is marketed heavily towards kids, and they could catch too much flack for using one product to entice kids and future adults to buy their beer.[/li][/ul]
There are probably more reasons, but I think these are the key ones. In reality it’d probably be a better investment for them to buy Royal Crown or another struggling Pop company and then streamline their production process by sharing canning, boxing and distributing resources. By doing so they could cut the relative costs and increase profits in the new Pop division. At least, thats what I’d do.
Also, you may not have noticed, but the beer companies have dove into the “carbonated energy drink” market. After seeing how popular Red Bull became, especially in bars, Budweiser came out with 180, a orange Red Bull competitor. I’m not sure what corporate affiliations Red Bull has, or if Miller has a product on the market as well, but you can see that beer companies aren’t completely exclusive to beer.
Obviously, my reply was answering from the second perspective, but I think most of the points apply to the subject question as well, especially the bulletted ones.
As a slight aside, it’s quite possible that Coca-Cola DOES have an interest in a company like Anheuser-Busch.
For a college sociology project, we had to trace the members of the Board of Directors of different corporations, and you might be amazed to see how many of these people sit on more than one board. It’s quite possibly, even likely, that this is the case with some of these companies, allowing the Boards to make their earnings off of both products.
Another factor may be (at least in America) that beer is controlled by the Bureau of Alcohol, Tobacco and Firearms and soda-pop is regulated by the Food and Drug Administration. I imagine it might be difficult have one plant that satisfies both groups.
And don’t forget several brewers make root beer (like Henry Winehard’s) Then there are the clear malts like all those hard lemonades and that horrible hard iced tea.
Maybe this isn’t relevant, but the big brewers in Japan (Kirin, Asahi, Suntory and Sapporo) all make soft drinks as well. The regulatory environmnet is different and that may be the key. In Japan, you can easily find a Kirin vending machine that sells both beer and softdrinks.
Seems to me that in the US the distribution channels certainly overlap. Perhaps a new trend buy Henry Winehard’s selling a six pack of root beer for something like $6 suggests that there will be an influx of doing both.
In Sweden the big breweries are also big on soft drinks. I believe the situation is the same in most of Europe. I have always thought the reasoning behind was that this would be a way to use all the carbon dioxide generated from the fermentation.
Where do Coca-Cola get all their carbon dioxide from? Do they use ‘burnt coal’? I thought that would be more complicated to clean, than using something that comes relatively pure from beverages intended for consumption.
(But why then don’t we see any ‘Gallo Cola’ or ‘Bacardi Ginger Ale’? There’s a lot more carbon dioxide generated when fermenting grapes/sugar…)
I think part of it as Omniscient mentioned is the family aspect in the U.S… If a major company tried to do both today there would be a major outcry from various groups. I think this would do more to damage the original product so that it would lose some of its market share. I doubt Coke, Pepsi, or Budweiser would like to chance this.
It was a (non-alcoholic) root beer called Root 66. As far as taste went, it wasn’t that bad, nothing special. But AB has built up a network of beer distributors, who have enough competition from other beer distributors. They didn’t want to take on Coke and Pepsi, as well.
As noted, regulatory issues can be a big factor in a company’s decision where to branch out. I’ve worked from time to time with the food industry, and I remember an executive saying that no matter what the profit potential, the regulatory issues were such that he’d rather leave dairy products to companies with the background and infrastructure needed to deal with those regulations.
I don’t know what the regulations surrounding beer production are, but I’ll bet they’re somewhat more rigorous than those for soda pop.
Recently, at the store I work at, I noticed a new product in the beer aisle. Kane’s Hard Cola. It looks like flat Coke in a glass bottle. Probably someone trying to hop on the hard lemonade wagon. (hard lemonade…mmm) I haven’t had the nerve to try it. Too cheap, it costs almost $10 a six-pack after tax and deposit.