The Wehring Interview - Anheuser-Busch InBev - Part II
Last week we ran the first part of our exclusive interview with the chief marketing officer of Anheuser-Busch InBev, Chris Burggraeve. Here's part two, in which Olly Wehring tries to get inside the inner sanctum of A-B InBev. Read on to learn how successful he was.
Ever since Belgium-based Interbrew merged with Brazil's Ambev in 2004, the InBev entity has oft been accused of penny-pinching, scrimping and “... cost-cutting is the usual one”, Burggraeve notes. It's a well-worn furrow, but one that Burggraeve is well-versed in fielding. “I'll take it as a badge of honour,” he smiles. “But, our approach is more one of resourceful brand-building.”
It must have been quite a shock, then, when the lean and mean InBev walked into Anheuser-Busch's marketing department in late-2008 to see how the free-spending Americans had splurged their marketing spends over quite a large area. “We have trimmed our sponsorships in the US,” concedes Burggraeve. “We have a very clear portfolio strategy in terms of what works well. There were a plethora of assets, which we've pruned, and said we'll do fewer but bigger, and make sure we link the right properties to the right brands.
“We use our sponsorship agreements resourcefully,” he continues.” Resourcefulness is one of the key things.” Wanting to elucidate his point, Burggraeve pulls out his laptop and fires up an A-B InBev presentation from earlier this month.
Running his finger down a list of sporting logos that includes the FIFA World Cup, the NFL, the NBA, NASCAR and the FA Cup here in the UK, he boasts: “I'm not sure how many 'cost-cutters' can afford this stable of (sponsorship) assets.”
As we get our teeth into the marketing bones, it soon becomes clear that A-B InBev's approach to marketing is quite a window into the company's ethos. “Acquiring a (sponsorship) asset is very easy,” Burggraeve says. “You write a cheque. But, we apply art, science and discipline to the property: The key thing is that we get a return on it. That's the A-B InBev way of marketing – a combination of art, science and discipline.”
I'd go as far as to say that that's the best form of describing the A-B InBev way per se – a blend of art, science and discipline. This approach, however, is often obscured from the view of its critics by the sheer size of the brewer (boasting 18.9% global market share, lest we forget). As the biggest player, does Burggraeve concur that A-B InBev is an easy target for critical appraisal?
“Having spent 12 years at Coca-Cola,” he says, “I'm not afraid of that. It's one type of adrenaline to get a tennis player to number one, but a different type of adrenaline to get him to stay number one. In Flemish, we have a saying; the high trees catch all the wind. That's something we're going to have to deal with. AmBev and Interbrew were off the radar because they were smaller, now we're an FMCG and one of the aspects of growing up to join the likes of Coca-Cola, Nestle and Procter & Gamble is that you will be in the spotlight more.”
Chris Burggraeve, chief marketing officer of Anheuser-Busch InBev
Burggraeve is keen to submit the company's approach to CSR as an exhibit for the defence. “Previously,” he explains, “the company's aim was to become the best beer company in the world. As we got bigger, we added one word – 'better'. AB InBev’s dream is to be the best beer company in a better world. The young company mentality has undergone a huge strategic change to add that word. It sounds trivial but, with the same rigour and discipline that you see in everything we do, we are now looking to give something back. So, for example, we are saving water, which is a credible target for a company like ours, which makes beer.
“It's taking a leadership role, through future-orientated commitments when it comes to CSR,” he continues. “We have a set of foundations worldwide to give something back: that's where we are in the global society, we're no longer a start-up brewing company. These are high words, but I see them happening.”
Throughout this part of our discussion, Burggraeve's laptop has rested on a slide from the aforementioned presentation with a world map showing where A-B Inbev's volumes come from (it's slide three, here). I can't help but notice that Africa is in grey and doesn't boast a percentage. This, at a time when the likes of Heineken – who recently described Africa as being as important to them as Brazil is to A-B InBev - are making their presence felt on the continent.
“We export to Africa,” Burggraeve notes, “but it's a choice, We believe there is so much upside in the countries where we are present, even in the ones where we already have high shares. There is room for growth for us in countries like Russia and China – just mastering where we are leaves us with so much volume growth opportunity.” But, is A-B InBev running the risk of missing the African boat? “I think that one of the key things that got us to deliver the results that we have is an enormous focus and not to be sidetracked,” he says. “We will stick to that path.”
With Burggraeve being the most senior executive I've met from A-B InBev, it's inevitable that I was going to get carried away at some point in our time together. And, here it comes.
Tell me about Mexico, I venture. How's A-B InBev's relationship with Grupo Modelo? I'm swiftly batted away. “I have very little to add on that,” says Burggraeve. Beyond confirming that A-B InBev accounts for nine of the Mexican brewer's 19 board members and that the company holds a 50% economic stake, that's all I'm likely to get on the subject.
I can't resist another nudge, though. But, what about Foster's Group in Australia? Are recent reports, that Modelo has been fishing for A-B InBev approval to make a bid for Foster's, correct? “Again, I have no comment.” Behold, the discipline arm of A-B InBev's approach has been tested and has been found to be solid.
People are starting to look at their watches, as Burggraeve's departure time draws closer. Credit to him, though: Before he's hauled away, he's keen to show me two (very amusing) TV ads A-B InBev has just started running in Argentina.
I've got time to slip one more question in and, seeing as the corporate angle hasn't got me very far, I best stick to the marketing arena. So...
Does brand provenance matter to A-B InBev, I ask. We're back on track.
“Provenance is a paradigm that has evolved substantially,” Burggraeve says. “If you ask an American where Heineken comes from, they would probably say Germany. If you asked a beer drinker in the UK where Stella Artois comes from, they would say the continent.
“What millenials and the younger generation look for is a story and something they can connect with. Provenance can be part of it but, in beer, we see it as being less and less an absolute necessity. I have absolutely no problem with that. Where it is physically made becomes less of a decision factor to buy the brand or not. There are many examples of this – Asahi in Europe, for example, is brewed in the Czech Republic.”
Woah, woah, woah. A Japanese beer, not made in Japan? That's fair ruined my day.
“Let us make your day, then,” says the CMO for the largest brewer in the world. “Grab some Buds!”
To read part I of this exclusive interview, click here.
They've been arguing for more than 100 years, but are we in danger of reaching some sort of clarity on the Budweiser trademark dispute in Europe?...
With the end of the year looming, just-drinks is running a series of 'Top Tens of the Year' in the run-up to Christmas....
- Focus - Edrington's FY Performance by Brand
- Where Beer is Brewed Can Leave a Bad Taste
- Analysis - Storm clouds lift over Diageo Towers
- Analysis - Cider's Campaign Gains
- Analysis - SABMiller's LatAm aim? Drink more beer
- Former Bacardi exec takes De Kuyper CEO role
- Pernod Ricard appoints Absolut Vodka VP
- Beam Suntory to re-package Courvoisier Cognac
- Edrington posts FY profits drop
- TWE, Pernod hail China-Aus FTA
- Global liqueurs insights - market forecasts, product innovation and consumer trends research
- The IWSR Company Profile 2014 – Remy Cointreau
- Diageo plc (DGE) - Financial and Strategic SWOT Analysis Review
- Global Tequila insights - market forecasts, product innovation and consumer trends research
- Beer, 2014 and the future