America for sale

There is no more emblematic symbol of the decline of American marketing prowess than Brazilian-controlled InBev’s bid for that most star-spangled of brands, Budweiser.

David%20Benady%20120x120There is no more emblematic symbol of the decline in American marketing prowess than Brazilian-controlled InBev’s bid for that most star-spangled of brands, Budweiser.

InBev, created from a merger between Brazil’s AmBev and Belgium’s Interbrew is the world’s biggest brewer. It is based in Belgium, but under the control of Brazilian bankers.

The all-American lager, described as “stars and stripes in a bottle”, is the world¹s second biggest selling beer – after global number one, its off-shoot Bud Light.

That such a powerful icon of Americana should fall into foreign hands has created a storm of self-doubt in the United States. It suggests to many Americans that US brands, which have dominated the world since 1945, are on the back foot.

Whatever next? Coca-Cola bought by the Chinese? McDonald’s snapped up by the Saudis? Not quite yet.

But this decade the poles of global capitalism have been dramatically reversed between East and West. America¹s huge trade deficit with Asia and rising wealth in China, India and the Middle Eastern oil states is seen by many as a permanent shift in global power. The growth of sovereign wealth funds – state owned investment funds which have amassed huge financial fire power – could swallow up large chunks of US and European business if permitted.

US economic clout has been closely linked to its brands. After all, competition-based marketing as we know it is an American confection and has been the methodology of US global capitalism. The proliferation of brands that has flowered across the planet during the past 80 years was cultivated in the soil of the world¹s biggest market.

American companies have entered overseas markets with a twenty to fifty year commitment and huge marketing budgets to draw on as they nibble away at the home market’s local brands until they outgun them and achieve domination. Procter & Gamble has pursued this long game with its laundry and personal care brands, its Gillette subsidiary has done the same in shaving while PepsiCo has gobbled up the UK crisp market through the Walkers brand. This long-term US strategy of attrition sometimes fails – particularly in the retail sphere, as Walmart found with its purchase of Asda and Gap has discovered.

But could the glory days of American brand power become a distant memory? Anheuser-Busch’s Budweiser would be by far the most significant US brand so far to come under ownership of an overseas company.

Another highly symbolic deal was Chinese technology giant Lenovo’s purchase of the iconic IBM’s personal computer business in 2005. It created the world’s third largest PC maker with sales of $12bn.

Other overseas deals include Germany’s Adidas buying America¹s Reebok in 2005, News Corporation’s takeover of the Wall Street Journal – News Corp is nominally a US company, but we all know Rupert Murdoch is Australian. Germany’s Daimler bought American Chrysler – though sold it back to US private equity group Cerberus Capital Management. India¹s Tata Corporation bought those quintessential British brands Jaguar and Land Rover from America’s Ford.

Marketing guru Philip Kotler says that within a couple of decades, China will be the world’s marketing powerhouse. Just as Japanese and Korean brands have stormed global markets, when China’s companies find ways to crack brand marketing, their sheer scale means their brands will undercut rivals and gradually take over markets.

Of course US brands still dominate many consumer sectors. But the string of US brands falling under foreign ownership suggests that this will be anything but an American century for marketing.

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