InBev CEO Trying to Revive Budweiser, Bud Light
ST. LOUIS -- Having helped transform a Brazilian beer maker into a giant that swallowed America's dominant brewer, Anheuser-Busch InBev Chief Executive Carlos Brito is now trying to revive Budweiser and Bud Light amid one of the U.S. industry's worst slumps, The Wall Street Journal reported.
The 50-year-old native of Rio de Janeiro plans to revamp the marketing of Budweiser, whose sales have slipped for 21 years even though it remains the second-largest U.S. beer brand after Bud Light. He wants to halt the iconic brew's decline in its largest market, while expanding sales in such countries as China and Russia.
Brito joined Brazilian brewer Brahma two decades ago after earning an MBA at Stanford, and helped instill a no-frills culture in which executives eschew individual secretaries and company cars. This frugality helped finance a deal-making spree that culminated in the $52 billion purchase of Anheuser-Busch Cos. in 2008 by InBev NV, a Brazilian-Belgian hybrid, according to the newspaper.
The Journal recently interviewed Brito at the company's New York office.
WSJ: How will you shift your marketing of Budweiser to revive the brand in the U.S.?
Brito: We have to do a better job of reinforcing the foundations of the brand. We haven't reminded people it's a different brewing process than all other beers out there. In the U.S., we haven't talked much about [beechwood aging] for years.
WSJ: The big mass-market beer brands in the U.S. are struggling. Do you think so-called mega brands are in long-term trouble?
Brito: If you look at Bud Light, together with Bud Light Lime and Bud Light Golden Wheat, that brand grew last year in market share. The mega-brand theory -- I don't buy into it. The [poor] economy got a lot of our consumers, and some of them down-traded. On the other hand, you see the interest that consumers have, even in tough times, in the craft beers. And we have many brands in that territory. Can we do a better job there? Yes, of course.
WSJ: You have developed a strong no-frills culture. Why does that work for you?
Brito: If you are doing anything that you think a consumer would not be willing to pay a premium for -- think twice before doing it. That's why a chauffeured car for me doesn't make sense. I come to work by train. I tell the guys, "Being efficient is what our consumers would do." When I travel with my family, I don't go for five-course meals, five-star hotels.
WSJ: Where do you see the best prospects for expanding the Budweiser brand globally?
Brito: We want to really develop Budweiser as a true global, iconic, flagship brand. The premium segment in Brazil is still very small compared to most countries, and we have a strong share in that small segment. But we think that a brand like Budweiser can enlarge the segment. So we have launched it in Russia, and Brazil is a candidate as well.
WSJ: Brazil has been growing rapidly for you. Why is it such a hot market?
Brito: The macro economy is very positive. And we started expanding in terms of package and price combinations, and also with some very interesting line extensions of Brahma and Antarctica, and that started to appeal to more consumers.
WSJ: You've lost market share in Russia, where you're No. 2 after Carlsberg A/S. How are you addressing the challenges there from higher beer taxes and economic strains?
Brito: We looked at the business four years ago and said we need to shift our portfolio from low-price brands. We invested in brands that we think in five or 10 years will be the winning horses. That's why we added Budweiser. We have stabilized the business. Now we want to start growing the right brands.
WSJ: China is a big beer market, but profits have been challenging for global brewers because a lot of the beer is cheap. Are you seeing improvements?
Brito: The way we're getting our prices to move up is by enhancing our mix, so we're selling more Budweiser and Harbin instead of our local brands. It is a tough market price-wise, but the Chinese are very open to premium brands.
WSJ: What do you like to drink?
Brito: When I'm watching a sports event, I'll enjoy a Budweiser. If I'm out having dinner, I might order a Stella Artois or one of our other Belgian beer brands.
WSJ: Analysts have often said that your company is very good at cost-cutting and improving profit margins, but they question your ability to build brands. Is that fair?
Brito: I think it's unfair criticism because, first, just look at the numbers. If we were just good at cost management, we wouldn't be here today. Our numbers show you that the top line and costs evolved -- both -- to better places. I also have to be humble and admit that we have learned a lot [through acquisitions]. Our marketing and people tool kit evolved a lot. Some investors have known us for 20 years, and they still think of us as that local company in Brazil.
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The 50-year-old native of Rio de Janeiro plans to revamp the marketing of Budweiser, whose sales have slipped for 21 years even though it remains the second-largest U.S. beer brand after Bud Light. He wants to halt the iconic brew's decline in its largest market, while expanding sales in such countries as China and Russia.
Brito joined Brazilian brewer Brahma two decades ago after earning an MBA at Stanford, and helped instill a no-frills culture in which executives eschew individual secretaries and company cars. This frugality helped finance a deal-making spree that culminated in the $52 billion purchase of Anheuser-Busch Cos. in 2008 by InBev NV, a Brazilian-Belgian hybrid, according to the newspaper.
The Journal recently interviewed Brito at the company's New York office.
WSJ: How will you shift your marketing of Budweiser to revive the brand in the U.S.?
Brito: We have to do a better job of reinforcing the foundations of the brand. We haven't reminded people it's a different brewing process than all other beers out there. In the U.S., we haven't talked much about [beechwood aging] for years.
WSJ: The big mass-market beer brands in the U.S. are struggling. Do you think so-called mega brands are in long-term trouble?
Brito: If you look at Bud Light, together with Bud Light Lime and Bud Light Golden Wheat, that brand grew last year in market share. The mega-brand theory -- I don't buy into it. The [poor] economy got a lot of our consumers, and some of them down-traded. On the other hand, you see the interest that consumers have, even in tough times, in the craft beers. And we have many brands in that territory. Can we do a better job there? Yes, of course.
WSJ: You have developed a strong no-frills culture. Why does that work for you?
Brito: If you are doing anything that you think a consumer would not be willing to pay a premium for -- think twice before doing it. That's why a chauffeured car for me doesn't make sense. I come to work by train. I tell the guys, "Being efficient is what our consumers would do." When I travel with my family, I don't go for five-course meals, five-star hotels.
WSJ: Where do you see the best prospects for expanding the Budweiser brand globally?
Brito: We want to really develop Budweiser as a true global, iconic, flagship brand. The premium segment in Brazil is still very small compared to most countries, and we have a strong share in that small segment. But we think that a brand like Budweiser can enlarge the segment. So we have launched it in Russia, and Brazil is a candidate as well.
WSJ: Brazil has been growing rapidly for you. Why is it such a hot market?
Brito: The macro economy is very positive. And we started expanding in terms of package and price combinations, and also with some very interesting line extensions of Brahma and Antarctica, and that started to appeal to more consumers.
WSJ: You've lost market share in Russia, where you're No. 2 after Carlsberg A/S. How are you addressing the challenges there from higher beer taxes and economic strains?
Brito: We looked at the business four years ago and said we need to shift our portfolio from low-price brands. We invested in brands that we think in five or 10 years will be the winning horses. That's why we added Budweiser. We have stabilized the business. Now we want to start growing the right brands.
WSJ: China is a big beer market, but profits have been challenging for global brewers because a lot of the beer is cheap. Are you seeing improvements?
Brito: The way we're getting our prices to move up is by enhancing our mix, so we're selling more Budweiser and Harbin instead of our local brands. It is a tough market price-wise, but the Chinese are very open to premium brands.
WSJ: What do you like to drink?
Brito: When I'm watching a sports event, I'll enjoy a Budweiser. If I'm out having dinner, I might order a Stella Artois or one of our other Belgian beer brands.
WSJ: Analysts have often said that your company is very good at cost-cutting and improving profit margins, but they question your ability to build brands. Is that fair?
Brito: I think it's unfair criticism because, first, just look at the numbers. If we were just good at cost management, we wouldn't be here today. Our numbers show you that the top line and costs evolved -- both -- to better places. I also have to be humble and admit that we have learned a lot [through acquisitions]. Our marketing and people tool kit evolved a lot. Some investors have known us for 20 years, and they still think of us as that local company in Brazil.
Related News:
Broker: AB InBev to Buy Grupo Modelo This Year
Anheuser-Busch InBev Lays Off 90