The Wehring Interview - Anheuser-Busch InBev - Part I
Chris Burggraeve, chief marketing officer of Anheuser-Busch InBev
This month, we stay with beer for The Wehring Interview. After speaking to Heineken's CEO in May, I've been lucky enough to nail down the CMO of Anheuser-Busch InBev, Chris Burggraeve. In part one, below, we look at Chris' background, where his concentration is focussed and the perils of making - and keeping - a global beer brand. Part two will run next week.
It's early on a Friday morning, and I'm in the lounge of a modest, four-star hotel in central London to meet Chris Burggraeve, Anheuser-Busch InBev's chief marketing officer. Normally based at the brewer's New York office ("although I spend about three-quarters of my time travelling"), Burggraeve is in the UK to announce A-B InBev's latest sports-related tie-up – more of which later. This morning, his bags are packed and next to him, and he's heading back over the Atlantic later today.
Not before I've had the chance to speak to the most senior executive at A-B InBev (CEO Carlos Brito is pretty hard to get hold of, believe me) we've met.
Of Belgian stock, Burggraeve joined A-B InBev when it was still plain old InBev, in October 2007 – the A-B part came along when InBev bought Anheuser-Busch in November 2008. Prior to beer, he was at Coca-Cola for almost 13 years, where his last post was as group marketing director for European operations.
“Then,” he explains, “I got the call from A-B InBev to rejoin my passion: the global headquarters are in Leuven, which is where I had studied economics in the 80s.”
With a global stable of over 200 beer brands, I ask how Burggraeve splits his time and his travels. “All my time goes to the so-called 'focus brands', he explains. “We have identified 18, which account for about two-thirds of the volume and get more than their share of marketing investment.
“There are three global brands (Beck's, Budweiser and Stella Artois), a couple of multi-country brands, like Leffe and Hoegaarden that we seed very carefully – they may, one day, become global brands but who knows. The rest are local jewels – powerhouses in their countries, like Bud Light in the US, Skol, Brahma and Antarctica in Brazil, Harbin and Sedrin in China, Chernigivske in Ukraine and Klinskoye and Sibirskaya Korona in Russia.”
Chris Burggraeve, chief marketing officer of Anheuser-Busch InBev
One of my latest obsessions (I mean professionally, don't panic) is the oft-used phrase 'global brand'. In beer especially, the phrase sits uncomfortably with me. I'm not alone; earlier this year, our beer commentator, Pete Brown, voiced his concerns, that “truly global brand building is extremely difficult. And,” he argues, “it’s harder in beer than it is for any other mainstream product.”
Is 'global beer brand' not a contradiction in terms, I ask Burggraeve. “I can see where your question comes from,” he smiles. “There are some people in the beer industry that don't believe in the power of global brands, because they don't have any! Yes,” he continues, “I do believe 100% in the power of global brands. Budweiser, Stella Artois and Beck's are examples of those. I also believe that international premium brands will outgrow the local ones, based on all the trends and foresights that we have. They will also do that at attractive prices as people trade up. A couple of the big brewers have them, some don't.
“I don't see why the law of global brands wouldn't apply to beer, when it appeals to pretty much every other category,” he argues. “Historically, everything was local – give me a category and I'll show you where global brands came from. Coca-Cola was initially a local brand.”
Qualifying further, Burggraeve believes that we are witnessing the rise of the global consumer, who sees the world as their village. “Those are the consumers that global brands appeal to.”
Such consumers must be more prevalent among the growing middle classes of emerging markets than the more mature ones of Western Europe and the US, I suggest. “I think you have them in both,” he says. “But, they're coming in droves now in the emerging markets, by the sheer virtue of the explosion in per capita income. As people's willingness to trade up to what they perceive to be better things, this correlates to improved per capita income. This is happening in most markets outside of the US and Europe.”
As the world's largest brewer, and by quite some way (last year's EBITDA of US$14bn was more than Carlsberg, Heineken, Molson Coors and SABMiller combined), I'd expect a company the size of A-B InBev to have a global brand strategy in place. Nothing of the sort. “We have a brand portfolio strategy per country,” Burggraeve explains. “Within that, what you try to do as a company is to see if you can develop scale in some of those brands, and see if there are enough consumers with the same values as elsewhere in the world, to whom you can present a single offering. It makes sense to explore and exploit that if you have such an opportunity – we have such an opportunity in the likes of Budweiser, Stella Artois and Beck's.”
We turn to China as an example. A-B InBev is focussed on three key brands in the country. Burggraeve: “Budweiser leads the premium segment, which was developed from scratch over the last ten years and is growing twice as fast as the overall beer category in China, already the biggest beer market in the world. We also focus on Harbin, a local brand from the north, which is the oldest beer brand in China. With Harbin, we're looking to build it into a national brand. That will take time, but things move much faster in China than they ever did in the US and Europe. Finally, in the south, we have Sedrin. That's the regional powerhouse that we will keep regional in that area.
“In China, the challenge is how do you master this super-fast growth. We employ over 35,000 people in China and we're hiring at breakneck speed. All your rules that you may have had coming from a western market, you have to park them, observe what goes on locally and reinterpret – or reverse engineer, if necessary.” This sounds truly frustrating for a marketeer with the level of experience Burggraeve can boast.
“Ah, but it's a very nice frustration,” he laughs. “In China, it goes much faster.”
To read part II of this exclusive interview, click here.
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