As the economy has tightened consumer spending, Carlos Brito, chief executive officer of Anheuser-Busch InBev, has also taken the cue and applied a no-frills culture to the world’s largest beer company and producer of the largest U.S. beer brand, Bud Light. It was with his frugal approach to business that InBev was able to finance the $52 billion purchase of Anheuser-Busch Cos. in 2008 by InBev NV, the Brazilian beer maker that Brito played a key role in transforming.
In 2009, the company grew EBITDA 16.6% in spite of a challenging global economic environment, and in spite of the complexities of uniting two major companies, divesting assets and de-leveraging the balance sheet.
“When we combined Anheuser-Busch and InBev, we announced an ambitious set of commitments to drive the performance of our new company,” the company’s annual report stated. “The integration was achieved even more quickly and successfully than we imagined, as our new U.S. colleagues embraced our dream, ownership culture and core values of meritocracy, accountability and informality.
“As a result, we met — and in many cases exceeded — our commitments in 2009. We captured 1.1 billion USD in synergies in 2009. We maintain our commitment for total synergies from the combination of 2.25 billion USD, with a further 500 million USD expected in 2010.”
The main focus during the past year has been integration — bringing together two huge companies to deliver at both the global and local levels, according to Neil Stern, senior partner at McMillan Doolittle, a Chicago-based retail consulting firm.
Brito has said he plans to shift the marketing of Budweiser to revive the brand in the U.S. while expanding to other countries as well.
“We have to do a better job of reinforcing the foundations of the brand,” Brito told The Wall Street Journal recently. “We haven’t reminded people it’s a different brewing process than all the other beers out there. In the U.S., we haven’t talked much about [beechwood aging] for years.”
Another focus of Brito’s has been in developing an economical approach to the company’s culture where being a top executive doesn’t mean special costly privileges.
“If you are doing anything that you think a consumer would not be willing to pay a premium for — think twice before doing it,” Brito told the Journal. “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.”
Stern has also noticed this in Brito. “He has really been focusing the company on delivering results and specifically bringing the InBev culture into the U.S.,” Stern told SN. AB InBev is headquartered in Leuven, Belgium. “It is much more focused on accountability, cost containment and results than AB, and that has been the focus.”
Stern added that the challenge for the company is really a macro one. “Beer consumption has tracked the economy with shipments down. As the economy recovers, they will obviously benefit,” he said.
“At the same time, they need to continue to drive category innovation — as they are far and away the largest, they benefit as the category grows.”