WEBVTT - Bonus: Beer is Flowing Again 0:00:02.160 --> 0:00:06.000 Hi. I'm Andy Brown, the editorial director of the Bloomberg 0:00:06.200 --> 0:00:09.200 New Economy. I'll be with you for the next few 0:00:09.240 --> 0:00:12.880 weeks sharing highlights of my video broadcast called on the 0:00:12.920 --> 0:00:17.760 front Lines and Bloomberg New Economy Conversations, which look at 0:00:17.800 --> 0:00:21.720 how COVID nineteen is reshaping the global economy. You can 0:00:21.760 --> 0:00:25.320 find them all on Bloomberg dot com. One of the 0:00:25.360 --> 0:00:28.960 first global consumer companies to feel the impact of COVID 0:00:29.040 --> 0:00:33.120 nineteen was the beer giant A b InBev, whose brands 0:00:33.159 --> 0:00:38.600 include Budweiser, Corona and Stella Artois. A Bienbev operates a 0:00:38.640 --> 0:00:42.840 brewery in Wuhan, China, where the pandemic began and which 0:00:42.920 --> 0:00:46.920 was the world's first city to go into lockdown. But 0:00:47.000 --> 0:00:50.520 as life returns to normal in Wuhan and cities all 0:00:50.560 --> 0:00:55.680 over the world, beer is flowing again in record quantities. 0:00:56.440 --> 0:01:00.440 For a b InBev CEO Carlos Brito, this and around 0:01:00.520 --> 0:01:05.440 in Fortunes tells an optimistic story about mankind's ability to 0:01:05.640 --> 0:01:12.600 rebound from this catastrophe. Ultimately, he says, humans are social creatures. 0:01:13.480 --> 0:01:17.560 COVID nineteen may have pushed us temporarily into isolation, but 0:01:17.680 --> 0:01:22.400 it hasn't killed our urge to gather, to cultivate friendships, 0:01:22.880 --> 0:01:26.920 to celebrate. Cheers to that. I hope you enjoy this 0:01:27.000 --> 0:01:30.280 and other interviews on how the coronavirus is transforming the 0:01:30.280 --> 0:01:33.920 business world. And thanks to Stephanie Flanders for letting me 0:01:34.040 --> 0:01:44.120 hijack her feed. Carlos Brito, Welcome to the program. Thank 0:01:44.160 --> 0:01:47.920 you glad to be here. Andrew, So, you were one 0:01:47.960 --> 0:01:51.320 of the very first global consumer companies to feel the 0:01:51.400 --> 0:01:56.280 impact of COVID nineteen. That's because you operate a brewery 0:01:56.320 --> 0:01:59.560 in Wuhan, China, which of course is where the outbreak. 0:02:00.120 --> 0:02:02.720 And tell us a little bit about what happened in 0:02:02.840 --> 0:02:08.120 Wuhan and how's the situation there today. It's interesting you 0:02:08.240 --> 0:02:11.280 asked this, Andrew, because in January and the first week 0:02:11.360 --> 0:02:15.320 of January, first ten days, I was in China and 0:02:15.360 --> 0:02:18.920 I traveled, you know, throughout five different cities. We had 0:02:18.960 --> 0:02:21.720 wholesale of conventions, we had people from all over China. 0:02:22.280 --> 0:02:25.359 Ain't directed with everybody. Everything was normal. Then it came 0:02:25.400 --> 0:02:28.760 back ten days later the whole thing in China started 0:02:28.960 --> 0:02:32.120 with the lockdowns and the travel restrictions. During the first 0:02:32.160 --> 0:02:36.399 day of Chinese New Year. In Uhan, we have one 0:02:36.400 --> 0:02:40.160 of our close to forty breweries. We had a big 0:02:40.160 --> 0:02:42.560 operation in China. It's one of our top five countries. 0:02:42.600 --> 0:02:46.440 We have thirty thou colleagues there and Whan. Yes it's 0:02:46.480 --> 0:02:49.840 a big brewery, but it's one of many. And UH 0:02:49.960 --> 0:02:52.799 everything in the country went through through a lockdown and 0:02:52.840 --> 0:02:55.679 shut down consumers, businesses, everything for a month and a 0:02:55.720 --> 0:03:00.239 half and then we started reopening and Johan when was 0:03:00.240 --> 0:03:02.840 was one of the last brewers to reopen. But now 0:03:02.919 --> 0:03:04.959 for the past two months, everything is back to normal 0:03:04.960 --> 0:03:07.000 and China as much as it can be. When you 0:03:07.040 --> 0:03:11.040 look at retailers, bars, restaurants, everything, they're pretty much all open. 0:03:11.080 --> 0:03:14.440 Our officers back to normal since two months. So China's 0:03:14.440 --> 0:03:17.000 way ahead of the curve. And the same with Korea. 0:03:17.280 --> 0:03:19.840 South Korea we have also big business there and they 0:03:19.840 --> 0:03:23.760 also experienced the COVID as China did in the end 0:03:23.760 --> 0:03:26.840 of January, and they're all back to the new normal. 0:03:28.400 --> 0:03:32.960 So is Wuhan a bell weather for global consumption trends city. 0:03:34.240 --> 0:03:35.920 I think we learned a lot in China. I think 0:03:36.000 --> 0:03:38.040 one of the big advantage of being a global company 0:03:38.400 --> 0:03:41.880 and we operate in all continents UH and have big 0:03:42.040 --> 0:03:46.000 you know, business around all the major countries. The big advantage, 0:03:46.040 --> 0:03:48.160 as you said at the beginning, was that we learned 0:03:48.160 --> 0:03:51.400 from China early on how to be able to operate 0:03:52.480 --> 0:03:56.240 guaranteeing the safety of our people, how to observe and 0:03:56.280 --> 0:03:59.760 to understand where consumers are going in terms of their consumption, 0:04:00.360 --> 0:04:03.680 how to adapt our supply chain to the new reality. 0:04:03.760 --> 0:04:07.920 And when the pandemics started becoming, you know, going to Europe, Africa, 0:04:07.960 --> 0:04:12.000 the America's, we had the protocols that were developing China, 0:04:12.080 --> 0:04:14.680 South Korea, bar our colleagues on how to operate. So 0:04:14.720 --> 0:04:16.799 all I had to do is pretty much translate everything 0:04:17.520 --> 0:04:20.520 and uh because you had to observe social distancing, for 0:04:20.560 --> 0:04:23.039 example within the Brewers, so you had to operate with 0:04:23.120 --> 0:04:27.039 fewer people, you had to work from home. You had 0:04:27.120 --> 0:04:30.640 consumers now not being able to go to bars, restaurants, 0:04:30.720 --> 0:04:34.839 hotels or travel, and a lot of occasions migrate into 0:04:34.839 --> 0:04:38.160 the in home occasion. And with that consumers buying more 0:04:38.200 --> 0:04:41.719 in supermarkets, grocery stores, and that had to being impact 0:04:41.760 --> 0:04:45.080 on the supply chain in terms of package mix, brand mix, 0:04:45.720 --> 0:04:50.240 you know, in terms of delivery distribution. So agility was 0:04:50.360 --> 0:04:52.720 something that we learned from China that was very key 0:04:52.760 --> 0:04:57.480 to navigate given the fluidity of the situation and uncertainly 0:04:57.520 --> 0:05:00.040 because every country was a bit different in how a 0:05:00.120 --> 0:05:04.880 pandemic developed, in what measures governments took in different countries 0:05:04.920 --> 0:05:09.800 in terms of lockdowns, stay home type mandates, and our 0:05:09.800 --> 0:05:13.159 consumers also reacted. But the learning in China was key 0:05:13.279 --> 0:05:18.400 for us to navigate in Europe, Africa, the America's you've 0:05:18.440 --> 0:05:22.920 just announced record be a sales. It seems as though 0:05:22.960 --> 0:05:25.679 people count wait to start drinking it. And what's driving 0:05:25.680 --> 0:05:29.719 this and is it sustainable. It's interesting you asked that 0:05:29.800 --> 0:05:32.200 because in China, because it was the first country, the 0:05:32.279 --> 0:05:34.800 big country of ours that was affected, we did a 0:05:34.800 --> 0:05:38.719 lot of consumer research during the pandemic, and what we 0:05:38.800 --> 0:05:42.120 saw is that the question was what would you like 0:05:42.160 --> 0:05:44.960 to do once the pandemic is over? And what they 0:05:45.000 --> 0:05:47.480 told us is that they would I would love to 0:05:47.520 --> 0:05:50.520 go back to their normal left So they'll love to 0:05:50.560 --> 0:05:53.520 go to restaurants, to travel, to meet their friends physically, 0:05:53.839 --> 0:05:57.480 to go with its relatives, family members, and uh and 0:05:57.480 --> 0:05:59.360 do all these sorts of things, go to ball games, 0:05:59.400 --> 0:06:03.200 go to music festivals. So that gave us a little 0:06:03.200 --> 0:06:05.440 bit of an insight that yes, they will be a 0:06:05.440 --> 0:06:09.200 new normal. But the fundamental things that consumers are trying 0:06:09.240 --> 0:06:12.440 to do when they have free time and in trying 0:06:12.480 --> 0:06:15.680 to keep a close relationship with family and friends are 0:06:15.720 --> 0:06:18.880 still very much deep inside of them, and we don't 0:06:18.920 --> 0:06:24.320 think those things will change. There is obviously a colossal 0:06:24.480 --> 0:06:29.800 global industry, but it's also very local. You're literally everywhere. 0:06:30.279 --> 0:06:32.839 Take us around the world. Where are you seeing positive 0:06:32.839 --> 0:06:36.640 consumption trends? Where are the problems? Well, if you look 0:06:36.680 --> 0:06:39.800 at our you're very right, and our business is global, 0:06:40.000 --> 0:06:41.880 they're very local. At the same time, if you look 0:06:41.880 --> 0:06:46.359 at everything we sell, what of all we sell the 0:06:46.400 --> 0:06:51.120 supply chain of that local. We buy raw materials from 0:06:51.120 --> 0:06:55.520 farmers that are local. We use water local, We hire 0:06:55.520 --> 0:06:58.039 our colleagues locally, we brew locally, We sell back to 0:06:58.080 --> 0:07:04.040 consumers locally. So we are very connected to our communities 0:07:04.480 --> 0:07:08.719 and that's right. During COVID, once again we tried to 0:07:08.839 --> 0:07:11.720 be in a big way part of the solution and 0:07:11.760 --> 0:07:15.320 we provided in many countries hospitals. We used our trucks 0:07:15.320 --> 0:07:18.880 that were idle to help governments distribute food. We we 0:07:19.000 --> 0:07:24.000 get we we we We started producing face masks, face shields, 0:07:24.160 --> 0:07:28.320 alcohol sanitizer, hand sanitizers because we deal with with non 0:07:28.360 --> 0:07:31.320 all call beers. So the alcohol extracted from the non 0:07:31.360 --> 0:07:35.800 all call beer we repurpose to hand sanitizers. So we 0:07:35.840 --> 0:07:38.640 did all these things because again we're part of the community. 0:07:38.640 --> 0:07:42.360 Our colleagues and our consumers live in the community, so 0:07:43.240 --> 0:07:45.080 that was something that was key for us. It was 0:07:45.160 --> 0:07:47.960 key for us also we learned learning from China to 0:07:48.040 --> 0:07:51.800 establish those priorities very clear day one. First priorities safety 0:07:51.800 --> 0:07:55.680 of our colleague. Second, our communities. Third our consumers. All 0:07:55.760 --> 0:07:59.480 to support them at home with the entertainment, with streaming, 0:08:00.080 --> 0:08:02.600 with delivery services, so they because they had to be 0:08:02.640 --> 0:08:06.400 at home. How to support the supply chain be upstream. 0:08:06.440 --> 0:08:11.440 Our suppliers are downstream, our bars, restaurants, pubs, our retailers. 0:08:11.520 --> 0:08:14.160 We did lots of things to support them to bridge 0:08:14.560 --> 0:08:18.160 this lockdown, and at the end, how to support again, 0:08:18.960 --> 0:08:21.360 how to be prepared for the recovery because we knew 0:08:21.360 --> 0:08:23.600 the recovery would come, and how to understand the new 0:08:23.640 --> 0:08:27.280 normal and our consumers will Talking about the recovery of 0:08:27.320 --> 0:08:29.600 the new normal, there's a lot of concerns that many 0:08:29.680 --> 0:08:33.000 bars and restaurants in cities will never reopen. What are 0:08:33.040 --> 0:08:36.200 you seeing and then what generally how seriously do you 0:08:36.240 --> 0:08:39.520 take this idea that COVID nineteen contribute this sort of 0:08:39.640 --> 0:08:45.000 stampede out of cities. Well, in terms of bars and restaurants, 0:08:45.000 --> 0:08:48.080 are very committed to their recovery in many countries, are 0:08:48.080 --> 0:08:52.840 getting together with other CpG companies like in Brazil for example, 0:08:53.320 --> 0:08:56.600 and we are there to finance they are coming back 0:08:56.640 --> 0:08:59.640 to business, to finance that first purchase when they reopen, 0:09:00.120 --> 0:09:05.439 to provide them with a reopening kit in sanitizers, gowns, gloves, everything, 0:09:06.160 --> 0:09:09.679 and to also give a discount on some key s 0:09:09.760 --> 0:09:13.520 kus key products so they can get back to business. 0:09:14.200 --> 0:09:17.040 When you look at our supply chain, most of our 0:09:17.080 --> 0:09:20.360 farmers that we buy from our small farmers fifteen thou 0:09:20.559 --> 0:09:23.920 of them. And of the six million retailers that we 0:09:24.040 --> 0:09:28.120 service on a weekly basis throughout the world, most of 0:09:28.160 --> 0:09:33.000 them are small and medium businesses. So our successes very 0:09:33.040 --> 0:09:37.559 connected to their success and that's why we're so connected 0:09:37.600 --> 0:09:43.240 to having them recovering from this whole pandemic that affected 0:09:43.240 --> 0:09:45.840 them a big way. So, for example, one of the 0:09:45.880 --> 0:09:49.439 things we did during the pandemic was too fold first 0:09:49.440 --> 0:09:53.559 to launch it in many countries, in more than twenty countries, vouchers, 0:09:53.559 --> 0:09:57.719 so consumers could buy vouchers to help the retailers while 0:09:57.720 --> 0:10:01.120 they were closed their favorite pubs, and then redeemed that 0:10:01.920 --> 0:10:04.680 when the pub would reopen. And the second thing is 0:10:04.679 --> 0:10:06.680 that we put very quickly, because we have a very 0:10:06.880 --> 0:10:10.880 very big tech team inside our company. We put in 0:10:10.960 --> 0:10:15.400 place um apps that would connect consumers that were in 0:10:15.520 --> 0:10:20.280 stay home type mandates in orders with our retailers that 0:10:20.360 --> 0:10:23.920 were in shutdown. But they need each other, so we 0:10:24.080 --> 0:10:27.200 put that app to connect them. And in the Americans today, 0:10:27.200 --> 0:10:30.040 this app is already a big deal. We have hundreds 0:10:30.080 --> 0:10:34.280 of thousands of retailers that are connected in hundreds of 0:10:34.320 --> 0:10:36.720 thousands of consumers that are using it. So we did 0:10:36.720 --> 0:10:39.600 everything we could during and now after the pandemic to 0:10:39.679 --> 0:10:45.080 make sure this uh pub's restaurants will come back. So 0:10:45.200 --> 0:10:48.560 it seems pretty likely that more and more people will 0:10:48.720 --> 0:10:53.599 work from home permanently after this, even after the pandemic 0:10:53.640 --> 0:10:55.880 has has gone away. Does that concern you? Does it 0:10:56.200 --> 0:11:01.280 affect you in any way? A few after work drinkers. Well, 0:11:01.280 --> 0:11:03.960 our our offices, for example, if you take us as 0:11:03.960 --> 0:11:07.160 an example, we've always worked in open, open plan offices, 0:11:07.720 --> 0:11:09.520 you know, so nobody has an office I'll work in 0:11:09.559 --> 0:11:13.000 a big table with my direct reports around me. Everybody 0:11:13.000 --> 0:11:14.840 can see me, everybody can come talk to me. There's 0:11:14.880 --> 0:11:18.839 no doors, no assistance, blocking anything. So we we've always 0:11:18.920 --> 0:11:22.520 done that for now thirty years because we believe that 0:11:22.640 --> 0:11:26.000 people have in contact with each other is very important. 0:11:26.440 --> 0:11:28.720 So for example, I think zoom and this kind of 0:11:28.720 --> 0:11:32.920 technology can bridge you know, during the pandemic, you know 0:11:33.240 --> 0:11:35.760 much better than I thought, and I think most people thought. 0:11:35.840 --> 0:11:41.600 So it's very efficient. But it does not replace the 0:11:41.640 --> 0:11:44.760 experience of people bumping to each other, having a coffee 0:11:44.760 --> 0:11:46.520 at a break, having a beer at the end of 0:11:46.559 --> 0:11:48.720 the day. We have bars in our offices, so at 0:11:48.760 --> 0:11:50.040 the end of the day they can have a beer, 0:11:50.080 --> 0:11:53.440 talk about business, talk about life. It doesn't replace the 0:11:53.480 --> 0:11:56.320 traveling a lot of my routine, for examples, traveling to 0:11:56.360 --> 0:11:58.880 all these countries around the world, and when you travel 0:11:59.400 --> 0:12:02.880 unique host other you need clients, You see consumers while 0:12:02.920 --> 0:12:06.839 they're shopping, You ask consumers questions. So all those things 0:12:06.880 --> 0:12:12.280 are not programmed interactions that cannot be replaced easy by zoom. 0:12:12.400 --> 0:12:16.000 Zoom can replace what's programmed. So meetings that are you know, 0:12:16.160 --> 0:12:18.800 in your calendar, but these things that happen as you 0:12:18.880 --> 0:12:21.720 go through markets and you see people buying, and you 0:12:21.760 --> 0:12:24.800 see your people in action and interact with the customer, 0:12:25.120 --> 0:12:28.679 and you visit the whole salter, this thing's technology can replaced. 0:12:29.120 --> 0:12:32.120 So I think, yes, there will be some flexibilization after 0:12:32.120 --> 0:12:35.800 work environment. But I think people find that after a 0:12:35.800 --> 0:12:38.640 couple of months. You know, for example, suppose you have 0:12:38.800 --> 0:12:42.520 somebody new join your company. How can this person it's 0:12:42.520 --> 0:12:45.600 not fair with them that we continue the whole life 0:12:45.640 --> 0:12:47.880 like this, because they will now be able to understand 0:12:47.880 --> 0:12:50.679 how the company works, how the culture is all about, 0:12:51.120 --> 0:12:53.640 because they won't be able to interact with people. So 0:12:53.679 --> 0:12:55.480 I think what's happening now is that we're using a 0:12:55.520 --> 0:12:59.680 lot of the social capital that we've been accumulating. But 0:12:59.760 --> 0:13:01.920 there's a limit. At some point you have to accumulate 0:13:01.920 --> 0:13:04.520 more captor in the bank in terms of your colleagues 0:13:04.559 --> 0:13:07.560 and how well you know them. The last question, your 0:13:07.920 --> 0:13:12.679 entire business model depends on bringing people together. Does that 0:13:12.760 --> 0:13:16.040 change in any way as a result of COVID nineteen. 0:13:16.520 --> 0:13:21.160 Do we become less social or the opposite? No? No, 0:13:21.280 --> 0:13:23.719 I think what changes is that, for example, starts from 0:13:23.720 --> 0:13:26.400 the culture of our company. Our culture is a culture 0:13:26.400 --> 0:13:29.640 of ownership in in that we treat the companies hours 0:13:30.080 --> 0:13:33.160 a culture of talented people, big dreams, and more importantly, 0:13:33.200 --> 0:13:36.160 a culture that we go where consumers go because that's 0:13:36.200 --> 0:13:39.760 where growth is. So what we've been observing during this 0:13:39.840 --> 0:13:43.520 pandemic is that consumers have the same needs of getting together. 0:13:43.920 --> 0:13:46.559 It's yet that just that because of all the restrictions, 0:13:46.559 --> 0:13:49.200 they had to use technology to do so. But what 0:13:49.320 --> 0:13:53.240 you also observe is that as as as soon as 0:13:53.240 --> 0:13:57.440 these restrictions are easy, consumers go back and try to 0:13:58.200 --> 0:14:01.280 regain the ground they lost in terms of physical interactions. 0:14:01.640 --> 0:14:04.679 Of course, sure, of course consumers are more cautious, they 0:14:04.720 --> 0:14:08.920 are more you know, they're looking more at social distancing, 0:14:09.520 --> 0:14:11.679 wearing mass and all that. But at the end of 0:14:11.720 --> 0:14:15.280 physical contact, we believe the new normal will have it's 0:14:15.440 --> 0:14:18.400 yet to be defined, but consumers will go to some 0:14:18.480 --> 0:14:21.400 old habits because those are have been ingrained forever. I mean, 0:14:21.920 --> 0:14:25.480 human being is a social animal. We like to be 0:14:25.520 --> 0:14:28.760 together with people and the yes, technology can bridge lots 0:14:28.760 --> 0:14:30.520 of things, but at the end of the day, the 0:14:30.560 --> 0:14:32.760 human beings the human being, and I think the new 0:14:32.840 --> 0:14:35.560 normal will entail lots of things that used to be 0:14:35.920 --> 0:14:39.640 the old normal. For sure, Carlos Pretta, it's great to 0:14:39.680 --> 0:14:42.240 have you on the program. Thanks for your insights, thanks 0:14:42.280 --> 0:14:44.440 for your time. Thank you very much. I have a 0:14:44.440 --> 0:14:49.760 great day. Thanks for listening. I hope you'll tune in 0:14:49.840 --> 0:14:52.640 later this year for a digital edition of the annual 0:14:52.680 --> 0:14:57.240 Bloomberg New Economy Forum, where business and government leaders from 0:14:57.320 --> 0:14:59.960 around the world will talk about the challenge of bill 0:15:00.000 --> 0:15:04.560 building a more sustainable and equitable post COVID economy.