Speaker 1: This is Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes. Tim Stinovic on Bloomberg Radio. Our next guest
Speaker 1: works at the world's biggest brewer maker, Budweiser and Corona.
Speaker 1: He has spent nearly twenty years at the company. Has
Speaker 1: some thoughts for us on today's marketplace and what consumers want.
Speaker 1: He's also the former global president of A b in
Speaker 1: Bev's Beyond Beer division, so we can talk about a
Speaker 1: lot with him. Very pleased this afternoon to have Marcel
Speaker 1: Marcondez with us. He's chief marketing officer at A b
Speaker 1: in Bev. He's with us in person in the Bloomberg
Speaker 1: and Ractive Brokers studio. It's really nice. How are you.
Speaker 1: I'm very good. Thank you. It's so cool to be here.
Speaker 1: Thanks for having me. Yeah, we love we love having
Speaker 1: you here. Um, Marcella, I want to just talk about
Speaker 1: the global outlook here and what you're seeing. I mean,
Speaker 1: you has operated in so many different countries, so you
Speaker 1: have a really good idea of what's happening on the
Speaker 1: ground the world Struggling with inflation or concerns about the
Speaker 1: economy here in the US, around the world, what are
Speaker 1: you seeing Yeah, I'm seeing that, Alduv. Everything you just
Speaker 1: said is absolutely true, of course, and we all feel it. Uh,
Speaker 1: there's another big force having a big impact on how
Speaker 1: we behave and in the economy as well. I really
Speaker 1: believe in that, like hopefully we're getting out of this
Speaker 1: COVID thing. So especially when you think about our business,
Speaker 1: hopefully you can have an affirm it because there can
Speaker 1: can and there can always be a new variant showing
Speaker 1: up any time. Knock on the wood. But anyway, especially
Speaker 1: for our business, for the beer business, it's very meaningful
Speaker 1: to see that people that people are really willing to
Speaker 1: go back to life right to enjoy to be outside,
Speaker 1: to enjoy concerts too, uh, to be with friends, to
Speaker 1: be with family, to have a good time, to feel
Speaker 1: like they can enjoy time together one more time. This
Speaker 1: has an impact on the economy. This, this has a
Speaker 1: significant impact in our business as well. You can imagine
Speaker 1: all the frequency on restaurants, bars, events or all those
Speaker 1: things that were not happening anymore. So there's a balance
Speaker 1: long story short in terms of points of concern as
Speaker 1: as it's always the case in life, but a lot
Speaker 1: of points for optimism as well. Do you feel like
Speaker 1: you have a lot of clarity and in terms of
Speaker 1: the outlook. And it's interesting that you talk about events,
Speaker 1: Tim and I um did a couple of shows from
Speaker 1: the US Open here in New York City, and I
Speaker 1: mean it was packed and people were eating, people were drinking,
Speaker 1: people were enjoying, people were shopping, people were enjoying incredible tennis.
Speaker 1: But it does feel like and and it was so
Speaker 1: packed compared to where it was pretty pandemic, like people
Speaker 1: are just starving. It looks like to do things. Did
Speaker 1: set records, Carol, it did the most attended U s Open.
Speaker 1: So having said that, do you feel like the economy
Speaker 1: is stronger versus like all of the recessionary talk that
Speaker 1: seems to be going on globally. Yes, And I am optimistic.
Speaker 1: That's exactly how I feel, especially for for for our segment,
Speaker 1: for our industry. I am optimistic. I think there's a
Speaker 1: lot of bright side, a lot of bright angles for
Speaker 1: us to observe, like the ones you just described. People
Speaker 1: are out there. There's always a keep concerned about inflation,
Speaker 1: recession here and there, but there's a bigger inner uh
Speaker 1: voice and energy saying go live, Like, let's talk about
Speaker 1: something different like travel, Like you for sure you've been traveling,
Speaker 1: You've been going to airports, they're all packed, right. There's
Speaker 1: some how crises because of lack of staff on on
Speaker 1: the airlines and stuff, but people are moving right, so
Speaker 1: so there's there's definitely some some some reasons for optimism
Speaker 1: as well. Well. It's it's interesting here you speak this
Speaker 1: way because obviously your job is to tap into what
Speaker 1: people are feeling, because you need to know how to
Speaker 1: communicate to them. You need to know how to express
Speaker 1: your brands to them in a way that they will
Speaker 1: be receptive to. How have you community? How is your
Speaker 1: communication a B in BEVs? Communication changed over the last
Speaker 1: couple of years? Like what is the message that you
Speaker 1: are sending right now? And I know this varies depending
Speaker 1: on the market, but how would you characterize it? That's
Speaker 1: a very good question. And actually I should take one
Speaker 1: or two steps back before I get really straight into
Speaker 1: your into your question, because I think we we as
Speaker 1: a company, we're going through a meaningful process of evolution.
Speaker 1: We're known for our financial discipline and for growing inorganically,
Speaker 1: but then in the last couple of years, to your question,
Speaker 1: we became the indisputable number one brewery in the world.
Speaker 1: And by the time you become the number one, you
Speaker 1: lead the category. So your growth model needs to adjust,
Speaker 1: it needs to evolve, because it's not about acquiring other
Speaker 1: companies anymore and just fighting for share. You need to
Speaker 1: work to enlarge and to grow the whole category so
Speaker 1: that everybody wins and you win together. Meaning we need
Speaker 1: to move from a growth model that is focused on
Speaker 1: inorganic growth to a growth model that is focused on
Speaker 1: organic growth. And by the time any company makes that decision,
Speaker 1: brands become inevitably one of the most important assets of
Speaker 1: the organization, if not the most important ones. And this
Speaker 1: is when we really talk about our messaging and all that.
Speaker 1: So we are intentionally becoming much more consumer centric. And
Speaker 1: this is for real, it's not just a nice thing
Speaker 1: a nice thing to say. So we became obsessed about
Speaker 1: talking to people, understanding people, understanding what's going on with them,
Speaker 1: what's impacting their behaviors, which are their needs, so that
Speaker 1: we can identify relevant opportunities to make our brands relevant
Speaker 1: in their lives. The key thing is that when you
Speaker 1: do marketing, when you build brands, there's a a trap
Speaker 1: or a tendency for people to be okay just if
Speaker 1: they're visible, and then you can spend a lot of
Speaker 1: money just on visibility. The key thing to really drive
Speaker 1: growth and to be meaningful to people is when you
Speaker 1: find the right spots to be relevant to them. How
Speaker 1: do you figure out relevancy? It all comes. It all
Speaker 1: comes as a consequence of being closed to them. So
Speaker 1: we talked to literally millions of people every year. We
Speaker 1: have survey we have online panels and fixed online panels.
Speaker 1: We we talked to thousands of consumers every week. We
Speaker 1: talked to millions of consumers on a given year because
Speaker 1: we're asked about understanding their behavior, their needs, and the
Speaker 1: changes in their routine. We learn a lot of that
Speaker 1: coming after COVID, right because when the big thing happens
Speaker 1: that it significantly changes the way people live. We need
Speaker 1: to to have a much tighter post on how they're
Speaker 1: living so you can identify the opportunities to be meaningful
Speaker 1: and relevant in their lives. And that's a big change
Speaker 1: that we've been going through as an organization. Because there's
Speaker 1: so many brands today BNTH five hundred some some five
Speaker 1: hundred brands, how does is structured internally? Because you can't
Speaker 1: personally oversee five hundred brands. So take us inside the
Speaker 1: company a little bit. Okay, So welcome to the I
Speaker 1: was about to say welcome to the kitchen, but I'd
Speaker 1: right say welcome to the bar, to the brewery, all right.
Speaker 1: So yeah, basically I have heads of marketing responsible for
Speaker 1: the different regions of the world. Uh, and I also
Speaker 1: have people reportents directly to me to lead from those
Speaker 1: five hundred brands. With the four global brands, these are
Speaker 1: the brands that really have gigantic global scale. And there
Speaker 1: are a Budweiser, Stellartowa, Corona, and Mikolobota. So there's a
Speaker 1: special focus their plus the long tail of brands because
Speaker 1: this is still in an industry where fifty is percent
Speaker 1: of the industry is focused is still in local brands.
Speaker 1: So beer is so so is so connected with culture. Right,
Speaker 1: So in the different countries we have powerful, big local
Speaker 1: brands that are that are extremely meaningful because on top
Speaker 1: of being strong beer brands, they are heavily connected with
Speaker 1: the local culture. They usually carry the local pride, you know, right,
Speaker 1: that makes a lot of sense. I mean, do you
Speaker 1: anticipate that those four brands continue to be really kind
Speaker 1: of the engine for the company going forward, or from
Speaker 1: what you're seeing with consumers, are tastes going to change
Speaker 1: maybe significantly? Yeah, definitely yes, because these four brands there
Speaker 1: are premium brands, and the primiumization is a is a
Speaker 1: gigantic trend that we see having a huge impact in
Speaker 1: multiple industries including ours. It's and it's here to stay.
Speaker 1: Still with us, as Marcel Marcondest, his chief marketing officer
Speaker 1: at a b in Bev, formerly the global president of
Speaker 1: the Companies Beyond Beer division, still with us in her
Speaker 1: Bloomberg Interactor Broker's studio. We had a fun conversation while
Speaker 1: Charlie was giving us an update, Um, what are the
Speaker 1: top brands that's sell in the United States. I'll give
Speaker 1: I'll give you the top two. Okay, So number one
Speaker 1: is not going to be hard to to guess. It's
Speaker 1: bud Light and it's been the case for decades. But
Speaker 1: number two might be in new news for you. Number
Speaker 1: two is mik Glub Ultra low carbs, locale with great tastes,
Speaker 1: been around for twenty years. That's been around for twenty years,
Speaker 1: and since last year it's the number two brand in
Speaker 1: volumes in the United States. Tommy, you were shocked by that. Yeah,
Speaker 1: I was really surprised because to me, it's still a
Speaker 1: new brand even though it is twenty years old. That's
Speaker 1: one of those brands that I think I remember when
Speaker 1: it was introduced. Uh, why is how has it been
Speaker 1: so successful and why, especially in the last year, has
Speaker 1: it seen a real uptick. I think again, it's all
Speaker 1: about getting extremely well connected with consumer behavior and with
Speaker 1: the consumer trends and industry trends. In this case, we
Speaker 1: see that health and wellness is a big trend. We
Speaker 1: see this in every industry right and for sure COVID
Speaker 1: has accelerated that as well. People became more and more
Speaker 1: health conscious, So we see a clear impact of this
Speaker 1: in our industry too, and this has definitely accelerated the
Speaker 1: performance of Mikolo Boltra more so. That's what I wanted
Speaker 1: to ask you. Like Tim and I so many of
Speaker 1: our conversations for a long time, and I do feel
Speaker 1: like we're getting increasingly away of thinking about the COVID impact.
Speaker 1: But what happened to you guys during COVID that has
Speaker 1: stayed with you in terms of corporate strategy and how
Speaker 1: you relate with consumers. That's very a very good question.
Speaker 1: So when you think about brands, UH and UH commercial
Speaker 1: trends in the industry, I could name three. So the
Speaker 1: first one, as we just spoke about this, health and wellness.
Speaker 1: For obvious reasons, people became much more health conscious. This
Speaker 1: has an impact on everything. In our case, we feel it.
Speaker 1: We feel the same. There was a very nice acceleration
Speaker 1: of Mikolo Boltra for example, as a consequence of that.
Speaker 1: Second point is premiumization. Because beer, I mean beer is
Speaker 1: affordable luxury, right, so when people say, like, okay, things
Speaker 1: are complicated, I want to give myself some treat and
Speaker 1: then they can't afford great beers. So we see premiumization. Again.
Speaker 1: This is a trend that we see happening in multiple industries,
Speaker 1: but in our case, in the beer industry, it's a
Speaker 1: very evident and strong trend. So back to your previous
Speaker 1: question on the global brands, they're all premium and they
Speaker 1: continue to be the big growth engine of the company
Speaker 1: because they're sitting over a gigantic trend UH for the industry.
Speaker 1: The third thing that I think we all feel it
Speaker 1: in our daily lives is e commerce. Because of the
Speaker 1: lockdown lives, people started getting used to buying things online
Speaker 1: and for us, it's happening as well. So we've been
Speaker 1: investing significantly significant amounts of money on technology on building
Speaker 1: those platforms. Uh. And for example, another point that is
Speaker 1: probably going to be a curiosity for for for a
Speaker 1: lot of people. More than fifty percent of one of
Speaker 1: our net revenues they are they are already sold worldwide
Speaker 1: via digital channels. How does that work? For beer? Right?
Speaker 1: How does that work? So this is because those jobs,
Speaker 1: but this is sold from us to the clients, to
Speaker 1: the retailers right, so to the entrade. So this is
Speaker 1: our business to business. These are business to business platform
Speaker 1: called bees. It's already one of the top ten e
Speaker 1: commerce platforms in the world. But imagine a company our
Speaker 1: size more than fifty percent of our netural revenes are
Speaker 1: already sold via digital channels. What about director consumer direct
Speaker 1: to consumers? Thanks for the question. This is our next endeavor.
Speaker 1: So we have already in a few countries it's going
Speaker 1: to be able to get a little blight just click
Speaker 1: ultra sorry. So in the US specifically, we have strong
Speaker 1: partnerships with the big retailers that are that also have
Speaker 1: online versions like Walmart and so and so forth and
Speaker 1: Reasily and the ones you mentioned. We cannot operate in
Speaker 1: the US doing direct two consumers operations, but in multiple
Speaker 1: countries of the world we can. In Brazil, it's uh,
Speaker 1: it already represents more than five percent of our total
Speaker 1: sales we sell direct to consumers there, and we're just
Speaker 1: about to launch like FIFL World Cup will be a
Speaker 1: big opportunity for us, especially in Latin American markets because
Speaker 1: imagine how many people will be watching the games at
Speaker 1: home and feel like, oh, I should have ordered more beers.
Speaker 1: So we're launching Tada. I've already had a six pack
Speaker 1: and I can't go out, So yeah, I'm just kidding.
Speaker 1: So so so we're launching Tada Tada right, which is
Speaker 1: our our new global brand for for director consumers in
Speaker 1: more than ten countries in the second semester of this year.
Speaker 1: And this has become this is growing very fast. Marcel
Speaker 1: our beer trends among consumers, I mean, it's probably stupid question,
Speaker 1: but I mean are they the same? Like do the
Speaker 1: trends that change? Is it the same or different markets?
Speaker 1: And what consumers are different? Like how different are some
Speaker 1: some some trends? Are they some things? They they hit
Speaker 1: the trends the different markets, uh and with different intensities,
Speaker 1: but they're the same like the mega trends, as we say,
Speaker 1: like primealization, healthy well in the commence, these are mega trends.
Speaker 1: But for example, beyond beer is something that is not
Speaker 1: equally split yet. So you see like the US, for example,
Speaker 1: having a very meaningful market already for beyond beer, I
Speaker 1: mean Selter's ready to drink cocktails, heartease and these kinds
Speaker 1: of products. It's already tennish percent of the total industry
Speaker 1: in the US. It's very sizeable. In other markets, it's
Speaker 1: still more at the early stages. So this is one trend.
Speaker 1: It is a trend everywhere, but it's still unevenly distributed.
Speaker 1: For example, this is what brings a lot of female drinkers.
Speaker 1: You're asking me offline about it, right, So it brings
Speaker 1: a lot of female drinkers into the business, a lot
Speaker 1: of younger consumers into the business. It's ruin a lot.
Speaker 1: We used to say, it's inclusive, incremental, and profitable. So
Speaker 1: it's a great business to be part of. Where people
Speaker 1: say non alcoholic beer, do you like, oh my god,
Speaker 1: please don't say that, or do you say Okay, we're
Speaker 1: we're you know, we're in it. We we we learned,
Speaker 1: we learned something from experience. Like if you want to
Speaker 1: say that we were consumer centric for real, we can
Speaker 1: never say, oh no, don't talk to me about it
Speaker 1: because if consumers are looking after those solutions, we need
Speaker 1: to be best in class and giving it to them.
Speaker 1: And non NOWC is a trend as well because it
Speaker 1: is connected to health and aroundness. What are the gro
Speaker 1: what's the growth you're seeing a non alcoholic We're seeing
Speaker 1: double digit growth, but from a small base right yes,
Speaker 1: in the US, for example, it's around one percent of
Speaker 1: the industry. In Europe it's closer to ten, between five
Speaker 1: and tents, so it's a different kind of conversation, but
Speaker 1: it is growing everywhere. What's your brand? What are your
Speaker 1: brands that are not alcoholic? We're the leaders in the West.
Speaker 1: For example, we have Bush on NOWK, we have what
Speaker 1: those or those no now but are leading brand in
Speaker 1: terms of growth. Now because it's more recently, is bud
Speaker 1: zero uh fifty calories, no sugar, zero point zero alcohol.
Speaker 1: It's a great it's a very modern liquid. We just
Speaker 1: launched it Stella no nowc in Europe we're piloting this
Speaker 1: in the US now and and uh, the heavy heater
Speaker 1: that we have now is Corona. We're having multiple markets
Speaker 1: in Canada, in Europe, we're studying this in Latin America
Speaker 1: as well. And it's amazing because for you to have
Speaker 1: the taste of a real Corona with the line whenever
Speaker 1: you're looking for a non now proposition, it's just irresistible.
Speaker 1: All right, it's been a rough day, rough week, or
Speaker 1: rough month. What you drink a choice? I always have
Speaker 1: my Miklo Botra at home, my Stella at home, and
Speaker 1: my cut Water at home as well, which is ready
Speaker 1: to drink cocktail. That is just amazing night sometimes yes right,
Speaker 1: not got to do it for work. Part of his
Speaker 1: job making sure you know your product. This was fun.
Speaker 1: Come back, please, let's think so much, Mama Condes. He
Speaker 1: is chief marketing officer at A B in bab and
Speaker 1: lucky for us here in our Bloomberg Interactive Broker studio,
Speaker 1: it's good to have be back. Carol, welcome back to
Speaker 1: be back. It would be even better if we had
Speaker 1: a nickel. All right, let's go, We'll go one next time.
Speaker 1: This is Boombart