TEAM 3 PRESENTS:

ABOUT US1

The brewing industry has failed to keep pace with the changes in consumers’ preferences for drinks.

This has created a mainstream category that is under pressure from other drinks.

Grolsch believes in the strength of beer in the drinks market.

VISION MISSIONGrolsch is going to break through the mainstream and restore beer’s premium status.

PRODUCT LINE22

GROLSCH PREMIUM LAGER

SWINGTOP BOTTLE

NEWBOTTLE

CANS

OTHER PRODUCTS

AMBER ALEPREMIUM

WEIZENPREMIUM BLONDE

AMSTERDAM RANGE

HISTORY3

Willem Neerfedlt purchases a brewery in the Dutch town of Groenlo, near the German border.

1615

Grolsch’s iconic – and trademarked – ceramic swingtop bottle, which was advertised as easy to open and allowing storage of beer for later consumption.

1897

1922

Family members agree to an IPO on the Amsterdam Stock Exchange, brining a non-family member into management for the first time in history.

1984

Groslch merges operations with a nearby brewery in Enschede, but retains Grolsch as the brewery’s principal brand.

1995

Dutch government honors Grolsch with the coveted ‘Royal’ title, renamed as Royal Grolsch N.V..

Begin building a modern brewery, which, after disruptions and disturbances, started up in 2004.

1998

2007

SABMiller, the world’s 2nd largest brewer, announces friendly takeover of Royal Grolsch N.V. of the Netherlands.

REASSESSING GLOBAL STRATEGY4

Historically focused on developed markets i.e. UK, US, Canada, Australia, New Zealand, and France

Interested in developing premium beer business

Focused on markets in their infancy and with growth potential i.e. Latin America and Africa

INDUSTRY DYNAMICS26

• Global demand grew at 2.7%• Growth driven by developing regions – APAC,

Central & South America, & Eastern Europe• Developed regions growth either flat or decreased

2000 20050

100

200

300

400

500

WEST EUROPE (TOP 10) EAST EUROPE (TOP 5)CENTRAL & SOUTH AMERICA (TOP 5) NORTH AMERICAASIA (TOP 5) AUSTRALASIAMIDDLE EAST/NORTH AFRICA (TOP 5) REST OF AFRICA (TOP 5)

HL in

MM

2000-2005 HECTOLITERS CONSUMED BY REGION

5 FORCES SUMMARY FOR GLOBAL BREWERS27

• High Degree of Rivalry• Moderate forces for Supplier, Buyer, Entrants, and Substitutes

Buyer Power

Degree of Rivalry

New EntrantsSubstitues

Supplier Power

0

1

2

3

4

5

Five Forces Summary

5 FORCES DRILL FOR GLOBAL BREWERS28

Backwards Integration

Buyer Independence

Buyer Size

Financial Muscle

Low-Cost Switching

Oligopsony Threat

Price Sensitivty

Product Dispensibility

Tendency to Switch

Undifferentiated Product

0

5

Buyer Power

Comptetior SizeEasy to Expand

Hard to Exit

Lack of Diversity

Low Cost Switching

Low Fixed CostNumber of Players

Similarity of Players

Storage Costs

Undifferentiated Product

Zero Sum Game

0

1

2

3

4

5

Rivalry

Beneficial Alternative

Low Cost SwitchingCheap Alternative

0

5Substitutes

Differentiated InputForward Integration

Importance of Quality/Cost

No Substitute Inputs

Oligopoly ThreatPlayer Dispensability

Player Independence

Supplier Size

Switching Costs

0

2

4

Supplier Power

Distribution AccessibleIncumbents Acquiescent

Little IP Involved

Little Regulation

Low Fixed Costs

Low-Cost SwitchingMarket Growth

Scale Unimportant

Suppliers Accessible

Undifferentiated Product

Weak Brands

0

2

4

New Entrants

ADDITIONAL KEY EXTERNAL FACTORS29

GLOBAL POPULATION OF PEOPLE IN 18 to 34 AGE RANGE

WORLD PRICE OF WHEAT

WORLD PRICE OF GLASS

GLOBAL CONSUMER SPENDING

WORLD PRICE OF ALUMINUM

GEOGRAPHIC DISTRIBUTION OF SALES

210

GEOGRAPHIC DISTRIBUTION OF

SALESINBEV SABMILLER ANHEUSER -

BUSCH HEINEKEN CARLSBERG MODELO MOLSON

CENTRAL & SOUTH AMERICA 42% 22% 1% 2% 0% 69% 22%

NORTH AMERICA 5% 29% 83% 7% 0% 28% 74%

ASIA 19% 2% 14% 4% 8% 1% 0%

AUSTRALASIA 0% 0% 0% 1% 0% 1% 0%

WEST EUROPE 15% 4% 2% 36% 31% 2% 24%

EAST EUROPE 20% 21% 0% 34% 60% 0% 0%

MIDDLE EAST & NORTH AFRICA 0% 0% 0% 2% 0% 0% 0%

REST OF AFRICA 0% 21% 0% 15% 1% 0% 0%

• Most of the major players at the time featured one or two outstanding markets

• Only Inbev and SABMiller displayed a diversified sales portfolio

TRENDS TOWARD CONSOLIDATION

211

Anheuser-Busch InBev

19.60%

SABMiller13.30%

Heineken N.V.9.40%Carlsberg A/S

7.30%

Other50.40%

2010 Global Market Share

Anheuser - Busch9%

SABMiller9%

Heineken6%

Carlsberg5%

Modelo3%

Molson3%

Inbev13%

Other53%

2006 Global Market Share

Anheuser-Busch InBev33%

SABMiller17%

Heineken N.V.17%

Carls-berg A/S

6%

Other27%

2015 Market Share

• No 1 or 2 position in 75 countries in 6 continents, mostly developing markets

• 200+ beverage brands

• Expertise in local value creation

• Largest Coca-Cola bottler in Africa

• No strong northern European beer brand on its portfolio

• No presence in Western European markets

• Overall volume growth in emerging markets

• Introduce the Premium beer category into its existing markets

• Optimize manufacturing and distribution costs

• Volumes of Standard beer are stagnant

• Industry consolidation mode. Prime targets for acquisition are more and more scarce

• Become a potential target for an uninvited acquisition

SWOT ANALYSIS25

STRENGTHS

• Premium Product (Taste, Quality)

• Historic brand with official Royal recognition (Royal Groslch)

• Patented Swingtop bottle

WEAKNESSES

• Distribution in International Markets

• International Execution

• Mostly unknown outside of northern Europe

OPPORTUNITIES

• Amsterdam economy brand

• Very low participation in North American markets

• Developing markets in Asia, Latin America and Africa

• New plant in the Netherlands

THREATS

• Markets shrinking in developed markets

• Entrance of new brands in the traditional Grolsch territory in eastern Netherland

• New craft beers entering the premium segment

GLOBAL FOOTPRINT14

SAB IMPORTSAB OPERATION

GROLSCH MARKETAMSTERDAM MARKET

AAA ANALYSIS213

10% 10%

8%

6%

0

4%

2%

8%

6%

4%

2%

100%

20%

40%

60%

80%

ADAPTATION

AGGREGATION

ARBITRAGE

MABA215

MARKET ATTRACTIVENESS BUSINESS ASSESSMENTAnalyzed:• Total Volume and Volume Growth of Grolsch

premium lager• Variable Commercial Contribution• Grolsch’s share of premium lager segment

Analyzed :• Total Volume and Volume Growth (International

Premium Lager Segment)• Price Premium between Brands• Geographic & Cultural Distances

• Measured differences in:• Difference in Languages• Non-Membership v. Membership in EU• Cost of Transport• Difference in GDP per Capita

POSSIBLE “KEY” MARKETS216

Sources:1- http://geert-hofstede.com/netherlands.html2-http://www.dutycalculator.com/hs-lookup/626889/hs-tariff-code-for-beer/3- http://hts.usitc.gov/

| SOUTH AFRICA : Former Dutch Colony: Similar language: Emerging Market: High levels of Indulgence1 : Existing presence SABMiller

C: [not significant]A: [not significant]G: Physical DistanceE: Different currencies

+ | COLOMBIA

: Existing presence SABMiller: Emerging Market: High levels of Indulgence1 : Virgin Premium Beer market

C: Different languagesA: [not significant]G: Physical DistanceE: Different currencies &

Import Tariffs2

+

| USA : Existing presence SABMiller: No import tariffs on beer3

: High levels of Indulgence1 : American preference for Imported beer

C: Different languagesA: Existence of Dry LawsG: Physical DistanceE: Developed Market

+ | POLAND : Relatively close : Growing demand: Familiar market: Learn from past experience

C: Language, IndulgenceA: [not significant]G: [not significant]E: Different currencies

+

RECOMMENDATIONS217

RE-LAUNCH AND EXPORT GROLSCH TO UNITED STATES

SELL AMSTERDAM BRANDINTRODUCE GROLSCH TO COLOMBIA AND OTHER

ANDEAN COUNTRIES

BREW GROLSCH IN SOUTH AFRICA

RE-ATTEMPT TO POSITION GROLSCH IN POLAND

BAR TALK220

What lessons can be drawn from where Grolsch has been most

successful?

Did the merger with SABMiller add value? If so, how?

What additional recommendations on strategy

would you make?What changes has Grolsch made to address the challenges faced?

How can Grolsch enter and compete in targeted markets? ●●●

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THANK YOU!