WEBVTT - Brewing Better Beer Brands for Consumers

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<v Speaker 1>This is Bloomberg Business Week with Carol Messer and Bloomberg

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<v Speaker 1>Quick Takes. Tim Stinovic on Bloomberg Radio. Our next guest

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<v Speaker 1>works at the world's biggest brewer maker, Budweiser and Corona.

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<v Speaker 1>He has spent nearly twenty years at the company. Has

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<v Speaker 1>some thoughts for us on today's marketplace and what consumers want.

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<v Speaker 1>He's also the former global president of A b in

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<v Speaker 1>Bev's Beyond Beer division, so we can talk about a

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<v Speaker 1>lot with him. Very pleased this afternoon to have Marcel

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<v Speaker 1>Marcondez with us. He's chief marketing officer at A b

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<v Speaker 1>in Bev. He's with us in person in the Bloomberg

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<v Speaker 1>and Ractive Brokers studio. It's really nice. How are you.

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<v Speaker 1>I'm very good. Thank you. It's so cool to be here.

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<v Speaker 1>Thanks for having me. Yeah, we love we love having

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<v Speaker 1>you here. Um, Marcella, I want to just talk about

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<v Speaker 1>the global outlook here and what you're seeing. I mean,

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<v Speaker 1>you has operated in so many different countries, so you

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<v Speaker 1>have a really good idea of what's happening on the

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<v Speaker 1>ground the world Struggling with inflation or concerns about the

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<v Speaker 1>economy here in the US, around the world, what are

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<v Speaker 1>you seeing Yeah, I'm seeing that, Alduv. Everything you just

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<v Speaker 1>said is absolutely true, of course, and we all feel it. Uh,

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<v Speaker 1>there's another big force having a big impact on how

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<v Speaker 1>we behave and in the economy as well. I really

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<v Speaker 1>believe in that, like hopefully we're getting out of this

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<v Speaker 1>COVID thing. So especially when you think about our business,

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<v Speaker 1>hopefully you can have an affirm it because there can

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<v Speaker 1>can and there can always be a new variant showing

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<v Speaker 1>up any time. Knock on the wood. But anyway, especially

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<v Speaker 1>for our business, for the beer business, it's very meaningful

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<v Speaker 1>to see that people that people are really willing to

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<v Speaker 1>go back to life right to enjoy to be outside,

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<v Speaker 1>to enjoy concerts too, uh, to be with friends, to

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<v Speaker 1>be with family, to have a good time, to feel

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<v Speaker 1>like they can enjoy time together one more time. This

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<v Speaker 1>has an impact on the economy. This, this has a

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<v Speaker 1>significant impact in our business as well. You can imagine

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<v Speaker 1>all the frequency on restaurants, bars, events or all those

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<v Speaker 1>things that were not happening anymore. So there's a balance

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<v Speaker 1>long story short in terms of points of concern as

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<v Speaker 1>as it's always the case in life, but a lot

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<v Speaker 1>of points for optimism as well. Do you feel like

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<v Speaker 1>you have a lot of clarity and in terms of

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<v Speaker 1>the outlook. And it's interesting that you talk about events,

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<v Speaker 1>Tim and I um did a couple of shows from

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<v Speaker 1>the US Open here in New York City, and I

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<v Speaker 1>mean it was packed and people were eating, people were drinking,

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<v Speaker 1>people were enjoying, people were shopping, people were enjoying incredible tennis.

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<v Speaker 1>But it does feel like and and it was so

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<v Speaker 1>packed compared to where it was pretty pandemic, like people

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<v Speaker 1>are just starving. It looks like to do things. Did

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<v Speaker 1>set records, Carol, it did the most attended U s Open.

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<v Speaker 1>So having said that, do you feel like the economy

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<v Speaker 1>is stronger versus like all of the recessionary talk that

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<v Speaker 1>seems to be going on globally. Yes, And I am optimistic.

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<v Speaker 1>That's exactly how I feel, especially for for for our segment,

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<v Speaker 1>for our industry. I am optimistic. I think there's a

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<v Speaker 1>lot of bright side, a lot of bright angles for

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<v Speaker 1>us to observe, like the ones you just described. People

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<v Speaker 1>are out there. There's always a keep concerned about inflation,

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<v Speaker 1>recession here and there, but there's a bigger inner uh

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<v Speaker 1>voice and energy saying go live, Like, let's talk about

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<v Speaker 1>something different like travel, Like you for sure you've been traveling,

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<v Speaker 1>You've been going to airports, they're all packed, right. There's

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<v Speaker 1>some how crises because of lack of staff on on

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<v Speaker 1>the airlines and stuff, but people are moving right, so

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<v Speaker 1>so there's there's definitely some some some reasons for optimism

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<v Speaker 1>as well. Well. It's it's interesting here you speak this

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<v Speaker 1>way because obviously your job is to tap into what

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<v Speaker 1>people are feeling, because you need to know how to

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<v Speaker 1>communicate to them. You need to know how to express

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<v Speaker 1>your brands to them in a way that they will

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<v Speaker 1>be receptive to. How have you community? How is your

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<v Speaker 1>communication a B in BEVs? Communication changed over the last

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<v Speaker 1>couple of years? Like what is the message that you

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<v Speaker 1>are sending right now? And I know this varies depending

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<v Speaker 1>on the market, but how would you characterize it? That's

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<v Speaker 1>a very good question. And actually I should take one

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<v Speaker 1>or two steps back before I get really straight into

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<v Speaker 1>your into your question, because I think we we as

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<v Speaker 1>a company, we're going through a meaningful process of evolution.

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<v Speaker 1>We're known for our financial discipline and for growing inorganically,

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<v Speaker 1>but then in the last couple of years, to your question,

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<v Speaker 1>we became the indisputable number one brewery in the world.

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<v Speaker 1>And by the time you become the number one, you

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<v Speaker 1>lead the category. So your growth model needs to adjust,

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<v Speaker 1>it needs to evolve, because it's not about acquiring other

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<v Speaker 1>companies anymore and just fighting for share. You need to

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<v Speaker 1>work to enlarge and to grow the whole category so

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<v Speaker 1>that everybody wins and you win together. Meaning we need

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<v Speaker 1>to move from a growth model that is focused on

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<v Speaker 1>inorganic growth to a growth model that is focused on

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<v Speaker 1>organic growth. And by the time any company makes that decision,

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<v Speaker 1>brands become inevitably one of the most important assets of

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<v Speaker 1>the organization, if not the most important ones. And this

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<v Speaker 1>is when we really talk about our messaging and all that.

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<v Speaker 1>So we are intentionally becoming much more consumer centric. And

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<v Speaker 1>this is for real, it's not just a nice thing

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<v Speaker 1>a nice thing to say. So we became obsessed about

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<v Speaker 1>talking to people, understanding people, understanding what's going on with them,

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<v Speaker 1>what's impacting their behaviors, which are their needs, so that

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<v Speaker 1>we can identify relevant opportunities to make our brands relevant

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<v Speaker 1>in their lives. The key thing is that when you

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<v Speaker 1>do marketing, when you build brands, there's a a trap

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<v Speaker 1>or a tendency for people to be okay just if

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<v Speaker 1>they're visible, and then you can spend a lot of

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<v Speaker 1>money just on visibility. The key thing to really drive

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<v Speaker 1>growth and to be meaningful to people is when you

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<v Speaker 1>find the right spots to be relevant to them. How

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<v Speaker 1>do you figure out relevancy? It all comes. It all

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<v Speaker 1>comes as a consequence of being closed to them. So

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<v Speaker 1>we talked to literally millions of people every year. We

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<v Speaker 1>have survey we have online panels and fixed online panels.

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<v Speaker 1>We we talked to thousands of consumers every week. We

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<v Speaker 1>talked to millions of consumers on a given year because

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<v Speaker 1>we're asked about understanding their behavior, their needs, and the

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<v Speaker 1>changes in their routine. We learn a lot of that

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<v Speaker 1>coming after COVID, right because when the big thing happens

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<v Speaker 1>that it significantly changes the way people live. We need

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<v Speaker 1>to to have a much tighter post on how they're

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<v Speaker 1>living so you can identify the opportunities to be meaningful

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<v Speaker 1>and relevant in their lives. And that's a big change

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<v Speaker 1>that we've been going through as an organization. Because there's

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<v Speaker 1>so many brands today BNTH five hundred some some five

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<v Speaker 1>hundred brands, how does is structured internally? Because you can't

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<v Speaker 1>personally oversee five hundred brands. So take us inside the

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<v Speaker 1>company a little bit. Okay, So welcome to the I

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<v Speaker 1>was about to say welcome to the kitchen, but I'd

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<v Speaker 1>right say welcome to the bar, to the brewery, all right.

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<v Speaker 1>So yeah, basically I have heads of marketing responsible for

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<v Speaker 1>the different regions of the world. Uh, and I also

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<v Speaker 1>have people reportents directly to me to lead from those

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<v Speaker 1>five hundred brands. With the four global brands, these are

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<v Speaker 1>the brands that really have gigantic global scale. And there

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<v Speaker 1>are a Budweiser, Stellartowa, Corona, and Mikolobota. So there's a

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<v Speaker 1>special focus their plus the long tail of brands because

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<v Speaker 1>this is still in an industry where fifty is percent

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<v Speaker 1>of the industry is focused is still in local brands.

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<v Speaker 1>So beer is so so is so connected with culture. Right,

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<v Speaker 1>So in the different countries we have powerful, big local

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<v Speaker 1>brands that are that are extremely meaningful because on top

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<v Speaker 1>of being strong beer brands, they are heavily connected with

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<v Speaker 1>the local culture. They usually carry the local pride, you know, right,

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<v Speaker 1>that makes a lot of sense. I mean, do you

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<v Speaker 1>anticipate that those four brands continue to be really kind

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<v Speaker 1>of the engine for the company going forward, or from

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<v Speaker 1>what you're seeing with consumers, are tastes going to change

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<v Speaker 1>maybe significantly? Yeah, definitely yes, because these four brands there

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<v Speaker 1>are premium brands, and the primiumization is a is a

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<v Speaker 1>gigantic trend that we see having a huge impact in

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<v Speaker 1>multiple industries including ours. It's and it's here to stay.

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<v Speaker 1>Still with us, as Marcel Marcondest, his chief marketing officer

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<v Speaker 1>at a b in Bev, formerly the global president of

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<v Speaker 1>the Companies Beyond Beer division, still with us in her

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<v Speaker 1>Bloomberg Interactor Broker's studio. We had a fun conversation while

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<v Speaker 1>Charlie was giving us an update, Um, what are the

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<v Speaker 1>top brands that's sell in the United States. I'll give

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<v Speaker 1>I'll give you the top two. Okay, So number one

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<v Speaker 1>is not going to be hard to to guess. It's

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<v Speaker 1>bud Light and it's been the case for decades. But

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<v Speaker 1>number two might be in new news for you. Number

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<v Speaker 1>two is mik Glub Ultra low carbs, locale with great tastes,

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<v Speaker 1>been around for twenty years. That's been around for twenty years,

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<v Speaker 1>and since last year it's the number two brand in

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<v Speaker 1>volumes in the United States. Tommy, you were shocked by that. Yeah,

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<v Speaker 1>I was really surprised because to me, it's still a

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<v Speaker 1>new brand even though it is twenty years old. That's

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<v Speaker 1>one of those brands that I think I remember when

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<v Speaker 1>it was introduced. Uh, why is how has it been

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<v Speaker 1>so successful and why, especially in the last year, has

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<v Speaker 1>it seen a real uptick. I think again, it's all

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<v Speaker 1>about getting extremely well connected with consumer behavior and with

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<v Speaker 1>the consumer trends and industry trends. In this case, we

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<v Speaker 1>see that health and wellness is a big trend. We

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<v Speaker 1>see this in every industry right and for sure COVID

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<v Speaker 1>has accelerated that as well. People became more and more

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<v Speaker 1>health conscious, So we see a clear impact of this

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<v Speaker 1>in our industry too, and this has definitely accelerated the

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<v Speaker 1>performance of Mikolo Boltra more so. That's what I wanted

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<v Speaker 1>to ask you. Like Tim and I so many of

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<v Speaker 1>our conversations for a long time, and I do feel

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<v Speaker 1>like we're getting increasingly away of thinking about the COVID impact.

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<v Speaker 1>But what happened to you guys during COVID that has

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<v Speaker 1>stayed with you in terms of corporate strategy and how

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<v Speaker 1>you relate with consumers. That's very a very good question.

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<v Speaker 1>So when you think about brands, UH and UH commercial

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<v Speaker 1>trends in the industry, I could name three. So the

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<v Speaker 1>first one, as we just spoke about this, health and wellness.

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<v Speaker 1>For obvious reasons, people became much more health conscious. This

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<v Speaker 1>has an impact on everything. In our case, we feel it.

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<v Speaker 1>We feel the same. There was a very nice acceleration

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<v Speaker 1>of Mikolo Boltra for example, as a consequence of that.

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<v Speaker 1>Second point is premiumization. Because beer, I mean beer is

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<v Speaker 1>affordable luxury, right, so when people say, like, okay, things

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<v Speaker 1>are complicated, I want to give myself some treat and

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<v Speaker 1>then they can't afford great beers. So we see premiumization. Again.

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<v Speaker 1>This is a trend that we see happening in multiple industries,

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<v Speaker 1>but in our case, in the beer industry, it's a

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<v Speaker 1>very evident and strong trend. So back to your previous

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<v Speaker 1>question on the global brands, they're all premium and they

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<v Speaker 1>continue to be the big growth engine of the company

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<v Speaker 1>because they're sitting over a gigantic trend UH for the industry.

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<v Speaker 1>The third thing that I think we all feel it

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<v Speaker 1>in our daily lives is e commerce. Because of the

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<v Speaker 1>lockdown lives, people started getting used to buying things online

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<v Speaker 1>and for us, it's happening as well. So we've been

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<v Speaker 1>investing significantly significant amounts of money on technology on building

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<v Speaker 1>those platforms. Uh. And for example, another point that is

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<v Speaker 1>probably going to be a curiosity for for for a

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<v Speaker 1>lot of people. More than fifty percent of one of

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<v Speaker 1>our net revenues they are they are already sold worldwide

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<v Speaker 1>via digital channels. How does that work? For beer? Right?

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<v Speaker 1>How does that work? So this is because those jobs,

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<v Speaker 1>but this is sold from us to the clients, to

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<v Speaker 1>the retailers right, so to the entrade. So this is

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<v Speaker 1>our business to business. These are business to business platform

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<v Speaker 1>called bees. It's already one of the top ten e

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<v Speaker 1>commerce platforms in the world. But imagine a company our

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<v Speaker 1>size more than fifty percent of our netural revenes are

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<v Speaker 1>already sold via digital channels. What about director consumer direct

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<v Speaker 1>to consumers? Thanks for the question. This is our next endeavor.

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<v Speaker 1>So we have already in a few countries it's going

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<v Speaker 1>to be able to get a little blight just click

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<v Speaker 1>ultra sorry. So in the US specifically, we have strong

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<v Speaker 1>partnerships with the big retailers that are that also have

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<v Speaker 1>online versions like Walmart and so and so forth and

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<v Speaker 1>Reasily and the ones you mentioned. We cannot operate in

0:11:53.679 --> 0:11:58.120
<v Speaker 1>the US doing direct two consumers operations, but in multiple

0:11:58.120 --> 0:12:01.440
<v Speaker 1>countries of the world we can. In Brazil, it's uh,

0:12:01.480 --> 0:12:04.480
<v Speaker 1>it already represents more than five percent of our total

0:12:04.520 --> 0:12:08.000
<v Speaker 1>sales we sell direct to consumers there, and we're just

0:12:08.080 --> 0:12:10.160
<v Speaker 1>about to launch like FIFL World Cup will be a

0:12:10.160 --> 0:12:13.640
<v Speaker 1>big opportunity for us, especially in Latin American markets because

0:12:13.679 --> 0:12:16.080
<v Speaker 1>imagine how many people will be watching the games at

0:12:16.080 --> 0:12:19.359
<v Speaker 1>home and feel like, oh, I should have ordered more beers.

0:12:19.600 --> 0:12:22.439
<v Speaker 1>So we're launching Tada. I've already had a six pack

0:12:22.520 --> 0:12:24.240
<v Speaker 1>and I can't go out, So yeah, I'm just kidding.

0:12:24.440 --> 0:12:27.960
<v Speaker 1>So so so we're launching Tada Tada right, which is

0:12:27.960 --> 0:12:31.480
<v Speaker 1>our our new global brand for for director consumers in

0:12:31.480 --> 0:12:34.840
<v Speaker 1>more than ten countries in the second semester of this year.

0:12:35.360 --> 0:12:37.560
<v Speaker 1>And this has become this is growing very fast. Marcel

0:12:37.640 --> 0:12:41.559
<v Speaker 1>our beer trends among consumers, I mean, it's probably stupid question,

0:12:41.640 --> 0:12:44.800
<v Speaker 1>but I mean are they the same? Like do the

0:12:44.800 --> 0:12:47.720
<v Speaker 1>trends that change? Is it the same or different markets?

0:12:47.760 --> 0:12:52.520
<v Speaker 1>And what consumers are different? Like how different are some

0:12:52.520 --> 0:12:56.839
<v Speaker 1>some some trends? Are they some things? They they hit

0:12:56.920 --> 0:13:01.040
<v Speaker 1>the trends the different markets, uh and with different intensities,

0:13:01.040 --> 0:13:03.720
<v Speaker 1>but they're the same like the mega trends, as we say,

0:13:03.800 --> 0:13:06.400
<v Speaker 1>like primealization, healthy well in the commence, these are mega trends.

0:13:06.480 --> 0:13:10.840
<v Speaker 1>But for example, beyond beer is something that is not

0:13:11.000 --> 0:13:14.800
<v Speaker 1>equally split yet. So you see like the US, for example,

0:13:14.880 --> 0:13:17.960
<v Speaker 1>having a very meaningful market already for beyond beer, I

0:13:18.000 --> 0:13:22.640
<v Speaker 1>mean Selter's ready to drink cocktails, heartease and these kinds

0:13:22.640 --> 0:13:26.800
<v Speaker 1>of products. It's already tennish percent of the total industry

0:13:26.800 --> 0:13:29.800
<v Speaker 1>in the US. It's very sizeable. In other markets, it's

0:13:29.800 --> 0:13:33.920
<v Speaker 1>still more at the early stages. So this is one trend.

0:13:34.160 --> 0:13:40.319
<v Speaker 1>It is a trend everywhere, but it's still unevenly distributed.

0:13:40.640 --> 0:13:43.199
<v Speaker 1>For example, this is what brings a lot of female drinkers.

0:13:43.200 --> 0:13:46.280
<v Speaker 1>You're asking me offline about it, right, So it brings

0:13:46.320 --> 0:13:48.280
<v Speaker 1>a lot of female drinkers into the business, a lot

0:13:48.320 --> 0:13:51.000
<v Speaker 1>of younger consumers into the business. It's ruin a lot.

0:13:51.080 --> 0:13:53.640
<v Speaker 1>We used to say, it's inclusive, incremental, and profitable. So

0:13:53.679 --> 0:13:55.520
<v Speaker 1>it's a great business to be part of. Where people

0:13:55.520 --> 0:13:58.120
<v Speaker 1>say non alcoholic beer, do you like, oh my god,

0:13:58.120 --> 0:14:00.720
<v Speaker 1>please don't say that, or do you say Okay, we're

0:14:00.800 --> 0:14:03.880
<v Speaker 1>we're you know, we're in it. We we we learned,

0:14:04.240 --> 0:14:06.599
<v Speaker 1>we learned something from experience. Like if you want to

0:14:06.679 --> 0:14:09.079
<v Speaker 1>say that we were consumer centric for real, we can

0:14:09.080 --> 0:14:11.080
<v Speaker 1>never say, oh no, don't talk to me about it

0:14:11.080 --> 0:14:14.120
<v Speaker 1>because if consumers are looking after those solutions, we need

0:14:14.160 --> 0:14:16.600
<v Speaker 1>to be best in class and giving it to them.

0:14:16.760 --> 0:14:19.520
<v Speaker 1>And non NOWC is a trend as well because it

0:14:19.640 --> 0:14:21.680
<v Speaker 1>is connected to health and aroundness. What are the gro

0:14:21.800 --> 0:14:24.600
<v Speaker 1>what's the growth you're seeing a non alcoholic We're seeing

0:14:24.680 --> 0:14:28.000
<v Speaker 1>double digit growth, but from a small base right yes,

0:14:28.080 --> 0:14:30.440
<v Speaker 1>in the US, for example, it's around one percent of

0:14:30.480 --> 0:14:34.760
<v Speaker 1>the industry. In Europe it's closer to ten, between five

0:14:34.800 --> 0:14:37.200
<v Speaker 1>and tents, so it's a different kind of conversation, but

0:14:37.360 --> 0:14:40.040
<v Speaker 1>it is growing everywhere. What's your brand? What are your

0:14:40.040 --> 0:14:43.040
<v Speaker 1>brands that are not alcoholic? We're the leaders in the West.

0:14:43.040 --> 0:14:45.000
<v Speaker 1>For example, we have Bush on NOWK, we have what

0:14:45.120 --> 0:14:47.480
<v Speaker 1>those or those no now but are leading brand in

0:14:47.560 --> 0:14:49.960
<v Speaker 1>terms of growth. Now because it's more recently, is bud

0:14:50.040 --> 0:14:54.880
<v Speaker 1>zero uh fifty calories, no sugar, zero point zero alcohol.

0:14:54.960 --> 0:14:57.480
<v Speaker 1>It's a great it's a very modern liquid. We just

0:14:57.600 --> 0:15:01.240
<v Speaker 1>launched it Stella no nowc in Europe we're piloting this

0:15:01.760 --> 0:15:04.640
<v Speaker 1>in the US now and and uh, the heavy heater

0:15:04.680 --> 0:15:09.040
<v Speaker 1>that we have now is Corona. We're having multiple markets

0:15:09.040 --> 0:15:12.840
<v Speaker 1>in Canada, in Europe, we're studying this in Latin America

0:15:12.880 --> 0:15:15.120
<v Speaker 1>as well. And it's amazing because for you to have

0:15:15.200 --> 0:15:18.480
<v Speaker 1>the taste of a real Corona with the line whenever

0:15:18.480 --> 0:15:21.800
<v Speaker 1>you're looking for a non now proposition, it's just irresistible.

0:15:21.800 --> 0:15:23.320
<v Speaker 1>All right, it's been a rough day, rough week, or

0:15:23.400 --> 0:15:27.480
<v Speaker 1>rough month. What you drink a choice? I always have

0:15:27.640 --> 0:15:30.880
<v Speaker 1>my Miklo Botra at home, my Stella at home, and

0:15:30.920 --> 0:15:32.920
<v Speaker 1>my cut Water at home as well, which is ready

0:15:32.960 --> 0:15:38.200
<v Speaker 1>to drink cocktail. That is just amazing night sometimes yes right,

0:15:38.200 --> 0:15:40.880
<v Speaker 1>not got to do it for work. Part of his

0:15:41.040 --> 0:15:44.280
<v Speaker 1>job making sure you know your product. This was fun.

0:15:44.360 --> 0:15:48.040
<v Speaker 1>Come back, please, let's think so much, Mama Condes. He

0:15:48.200 --> 0:15:50.200
<v Speaker 1>is chief marketing officer at A B in bab and

0:15:50.280 --> 0:15:53.160
<v Speaker 1>lucky for us here in our Bloomberg Interactive Broker studio,

0:15:53.200 --> 0:15:55.000
<v Speaker 1>it's good to have be back. Carol, welcome back to

0:15:55.080 --> 0:15:56.880
<v Speaker 1>be back. It would be even better if we had

0:15:57.600 --> 0:15:59.960
<v Speaker 1>a nickel. All right, let's go, We'll go one next time.

0:16:00.640 --> 0:16:01.560
<v Speaker 1>This is Boombart