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AB InBev merger still stings 10 years later

Nan Palmero | Flickr Creative Commons
Anheuser-Busch was acquired by InBev in 2008. Loss of jobs reached far beyond the brewery. St. Louis' ad agency community was hard hit. Local 'Mad Men' remember the heyday of AB when the King of Beer reigned.

On July 14, 2008, Anheuser-Busch accepted a $52 billion takeover offer from InBev, a beer conglomerate based in Belgium. The deal marked the end of an era for the iconic American brewery established in 1852, and its hometown of St. Louis.

One local industry that had flourished for decades in the shadow of Anheuser-Busch was advertising. Think Jon Hamm in Mad Men. AB was the glamour account that everyone wanted a piece of and there was plenty of work to keep a small army of creative people very busy.

Money flowed from the brewery to local agencies to churn out ads, promotions, packaging designs, commercials and gimmicks that helped make Budweiser the King of Beers. When InBev took over, it slashed the company’s advertising budget and moved its marketing department to New York. The rank and file of St. Louis’ Mad Men were decimated.

Greg Stroube, co-founder of Burton Stroube Studios in St. Louis, started out as a photographer more than 30 years ago. AB work occupied most of his time. He said dozens of companies and thousands of people based in St. Louis supported AB’s marketing efforts.

“There were account executives, there were creative directors, there were art directors, photographers, food stylists, hair stylists, make-up stylists, wardrobe people, prop people,” Stroube said. “There were a couple people in town who pretty much made a full-time living just making custom stuff for props, for photoshoots that didn’t exist in reality.”

“For all you do, this Bud’s for you.”

Gerry Mandel was a writer who worked for several agencies in St. Louis. When he joined D’Arcy Masius Benton & Bowles, AB’s agency of record for decades, he was a creative director on the long-running “This Bud’s for you” campaign that launched in 1979.

“In 1985, August Busch the third [AB’s CEO and president] wanted to know if the campaign was getting tired,” Mandel recalled. “So we did a lot of research on it and found that it was still valid, but needed some freshening up.”

Mandel wrote a new line for the slogan. He changed, “For All You Do,” to “You Make America Work.” It reflected a proud sense of patriotism at the time and the new ads featured mostly men working blue collar jobs like construction and assembly lines.

“The effect on beer sales was just outstanding,” Mandel noted with pride. “When the campaign first started it was neck and neck between Bud and Miller. The Budweiser campaign just took off and Bud became the dominant beer in the marketplace.”

By 1987, Budweiser had cornered 40 percent of the U.S. market. As AB succeeded, St. Louis’ advertising firms and the wider community benefited.

“Anheuser Busch had many different marketing needs. It wasn’t just radio and television commercials. It was packaging, signage, and supporting various events,” Mandel said.

From sports to cultural and nonprofit organizations, AB’s support was omnipresent in St. Louis.

“It was a very generous company,” Mandel said. “They put a lot of money and effort into the community. This city was under the umbrella in some ways of Anheuser-Busch.”

InBev rules

In 2010, the layoffs began. Roni Chambers still gets tears in her eyes when she retells the harrowing responsibility of meeting one-on-one with hundreds of AB employees from around the country to explain their severance packages.

Chambers was in the sales division’s human resources department. “Up to that point, Anheuser Busch had never been a company to lay people off. I mean we needed to be doing that for a long time, but we just never had,” she said.

There were 21,000 AB employees in 2008; approximately 5,000 of them in St. Louis according to a spokesman for AB InBev corporate communications. This year, the company’s official count in St. Louis is somewhat vague: “three to four thousand.” Nationally, the number of employees stands at 18,000.

“Everybody who grew up here in St. Louis and sort of smelled the beer, aspired to work there,” said Chambers who became a career coach after she got her pink slip from AB. “They didn’t know what to do next if they were not going to be there [at AB]. They weren’t prepared for that.”

The St. Louis ad agency community was not prepared either for InBev’s next move: advertising and marketing budgets were severely cut. And to make matters worse, the Great Recession was also unfolding.

Stroube estimates more than half of the St. Louis ad community that depended on the beer business disappeared in the wake of combining Anheuser-Busch and InBev.

“A lot of agencies have gone out of business as a result of it,” he said. “A lot of people have lost their jobs, a lot of vendors to those agencies have had to either find other clients or have not survived. It’s had a big effect on the overall size and depth of the advertising community here in St. Louis.”

Yet he notes the survivors and newcomers are doing well. They just know better than to depend on one major client as so many did during the reign of the King of Beers.

Follow Melody on Twitter: @melodybird