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Great Lessons from Budweiser

lessons from budweiserI am reading a fascinating account of Anheuser-Busch’s (Budweiser’s) rise and fall in a book called Bitter Brew.

The book mostly illuminates how not to run a business or live a life, as the Busch family managers were often conniving, back-stabbing, misogynistic, vindictive, womanizing, arrogant jerks.

It is amazing that the company thrived for as long as it did before being acquired by InBev in 2008.

August Busch III, who ran the company from 1975 to 2002, was particularly interesting, as he pushed his own father out in a hostile coup that all but destroyed his father. Among many other things, he also fired a senior executive for the egregious violation of pronouncing French words in French, and he falsely accused the long-time President of the brewing division of a kickback scheme so he could take over the division in order to cover up his own inept diversification moves.

Worst of all was August III’s willingness to cover up his son’s (August IV’s) many major transgressions. When I was in college at the University of AZ in the 1980s, August IV was also attending. I remember vividly when August IV rolled his Corvetteand killed his passenger only to walk away and leave her for dead. The next day, the campus was swarming with Busch family attorneys who were working feverishly to cover up the entire affair. And sure enough, August IV got off without so much as a hand-slap. After leaving AZ, he continued his hard-partying ways and got into many more serious scrapes with the law, and his Dad buried them all. Despite an extremely spotty record, August IV become CEO in 2006.

Anyway, the book is excellent and chock full of sordid tales, and I highly recommend it. But, despite the sordid tales, I still pulled out a few great lessons.

    1.  The Power of a Great Brand: Despite inept management, Anheuser’s brands were so powerful the company remained number #1 for decades.
    2. The Power of Relentless Marketing: The company marketed relentlessly via all media platforms, and it was amazingly effective. “Contemporary adults” (as alcohol abusing college kids are euphemistically called) are surprisingly receptive to ad campaigns, e.g. Spuds Mackenzie or Budweiser frogs.
    3. Focus on Quality: People make fun of Budweiser for being a weak beer, but the company maintained extremely strict quality control standards (especially with respect to freshness) that kept customers loyal. Both Schlitz and Miller, in contrast, had quality issues that destroyed or nearly destroyed their respective brands.
    4. MOST IMPORTANT LESSON: “We don’t make beer, we make friends.” This quote by one of the original Busch patriarchs is my favorite lesson in the entire book. It is a stark reminder that no matter how good your product or service is, you still need to maintain strong relationships with your customers. In Bud’s case, they were primarily concerned with distributors. Whenever beer sales slowed down, they would host huge and very expensive bashes for their entire distributor network, and the tactic worked every time. Your customers need to be your friends.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646