Brewing Better Beer Brands for Consumers

Marcondez with us. He's chief marketing officer at A b in Bev. He's with us in person in the Bloomberg and Ractive Brokers studio. It's really nice. How are you. I'm very good. Thank you. It's so cool to be here. Thanks for having me. Yeah, we love we love having you here. Um, Marcella, I want to just talk about

the global outlook here and what you're seeing. I mean, you has operated in so many different countries, so you have a really good idea of what's happening on the ground the world Struggling with inflation or concerns about the economy here in the US, around the world, what are you seeing Yeah, I'm seeing that, Alduv. Everything you just said is absolutely true, of course, and we all feel it. Uh, there's another big force having a big impact on how

we behave and in the economy as well. I really believe in that, like hopefully we're getting out of this COVID thing. So especially when you think about our business, hopefully you can have an affirm it because there can can and there can always be a new variant showing

up any time. Knock on the wood. But anyway, especially for our business, for the beer business, it's very meaningful to see that people that people are really willing to go back to life right to enjoy to be outside, to enjoy concerts too, uh, to be with friends, to be with family, to have a good time, to feel like they can enjoy time together one more time. This has an impact on the economy. This, this has a

significant impact in our business as well. You can imagine all the frequency on restaurants, bars, events or all those things that were not happening anymore. So there's a balance long story short in terms of points of concern as as it's always the case in life, but a lot of points for optimism as well. Do you feel like you have a lot of clarity and in terms of

the outlook. And it's interesting that you talk about events, Tim and I um did a couple of shows from the US Open here in New York City, and I mean it was packed and people were eating, people were drinking, people were enjoying, people were shopping, people were enjoying incredible tennis. But it does feel like and and it was so packed compared to where it was pretty pandemic, like people are just starving. It looks like to do things. Did set records, Carol, it did the most attended U s Open.

So having said that, do you feel like the economy is stronger versus like all of the recessionary talk that seems to be going on globally. Yes, And I am optimistic. That's exactly how I feel, especially for for for our segment, for our industry. I am optimistic. I think there's a lot of bright side, a lot of bright angles for us to observe, like the ones you just described. People

are out there. There's always a keep concerned about inflation, recession here and there, but there's a bigger inner uh voice and energy saying go live, Like, let's talk about something different like travel, Like you for sure you've been traveling, You've been going to airports, they're all packed, right. There's some how crises because of lack of staff on on the airlines and stuff, but people are moving right, so so there's there's definitely some some some reasons for optimism

as well. Well. It's it's interesting here you speak this way because obviously your job is to tap into what people are feeling, because you need to know how to communicate to them. You need to know how to express your brands to them in a way that they will be receptive to. How have you community? How is your communication a B in BEVs? Communication changed over the last couple of years? Like what is the message that you are sending right now? And I know this varies depending

on the market, but how would you characterize it? That's a very good question. And actually I should take one or two steps back before I get really straight into your into your question, because I think we we as a company, we're going through a meaningful process of evolution. We're known for our financial discipline and for growing inorganically, but then in the last couple of years, to your question, we became the indisputable number one brewery in the world.

And by the time you become the number one, you lead the category. So your growth model needs to adjust, it needs to evolve, because it's not about acquiring other companies anymore and just fighting for share. You need to work to enlarge and to grow the whole category so that everybody wins and you win together. Meaning we need to move from a growth model that is focused on inorganic growth to a growth model that is focused on

organic growth. And by the time any company makes that decision, brands become inevitably one of the most important assets of the organization, if not the most important ones. And this is when we really talk about our messaging and all that. So we are intentionally becoming much more consumer centric. And this is for real, it's not just a nice thing

a nice thing to say. So we became obsessed about talking to people, understanding people, understanding what's going on with them, what's impacting their behaviors, which are their needs, so that we can identify relevant opportunities to make our brands relevant in their lives. The key thing is that when you do marketing, when you build brands, there's a a trap or a tendency for people to be okay just if they're visible, and then you can spend a lot of

money just on visibility. The key thing to really drive growth and to be meaningful to people is when you find the right spots to be relevant to them. How do you figure out relevancy? It all comes. It all comes as a consequence of being closed to them. So we talked to literally millions of people every year. We have survey we have online panels and fixed online panels.

We we talked to thousands of consumers every week. We talked to millions of consumers on a given year because we're asked about understanding their behavior, their needs, and the changes in their routine. We learn a lot of that coming after COVID, right because when the big thing happens that it significantly changes the way people live. We need to to have a much tighter post on how they're living so you can identify the opportunities to be meaningful

and relevant in their lives. And that's a big change that we've been going through as an organization. Because there's so many brands today BNTH five hundred some some five hundred brands, how does is structured internally? Because you can't personally oversee five hundred brands. So take us inside the company a little bit. Okay, So welcome to the I was about to say welcome to the kitchen, but I'd right say welcome to the bar, to the brewery, all right.

So yeah, basically I have heads of marketing responsible for the different regions of the world. Uh, and I also have people reportents directly to me to lead from those five hundred brands. With the four global brands, these are the brands that really have gigantic global scale. And there

are a Budweiser, Stellartowa, Corona, and Mikolobota. So there's a special focus their plus the long tail of brands because this is still in an industry where fifty is percent of the industry is focused is still in local brands. So beer is so so is so connected with culture. Right, So in the different countries we have powerful, big local brands that are that are extremely meaningful because on top of being strong beer brands, they are heavily connected with

the local culture. They usually carry the local pride, you know, right, that makes a lot of sense. I mean, do you anticipate that those four brands continue to be really kind of the engine for the company going forward, or from what you're seeing with consumers, are tastes going to change maybe significantly? Yeah, definitely yes, because these four brands there are premium brands, and the primiumization is a is a gigantic trend that we see having a huge impact in

multiple industries including ours. It's and it's here to stay. Still with us, as Marcel Marcondest, his chief marketing officer at a b in Bev, formerly the global president of the Companies Beyond Beer division, still with us in her Bloomberg Interactor Broker's studio. We had a fun conversation while Charlie was giving us an update, Um, what are the top brands that's sell in the United States. I'll give I'll give you the top two. Okay, So number one is not going to be hard to to guess. It's

bud Light and it's been the case for decades. But number two might be in new news for you. Number two is mik Glub Ultra low carbs, locale with great tastes, been around for twenty years. That's been around for twenty years, and since last year it's the number two brand in volumes in the United States. Tommy, you were shocked by that. Yeah, I was really surprised because to me, it's still a new brand even though it is twenty years old. That's one of those brands that I think I remember when

it was introduced. Uh, why is how has it been so successful and why, especially in the last year, has it seen a real uptick. I think again, it's all about getting extremely well connected with consumer behavior and with the consumer trends and industry trends. In this case, we see that health and wellness is a big trend. We see this in every industry right and for sure COVID

has accelerated that as well. People became more and more health conscious, So we see a clear impact of this in our industry too, and this has definitely accelerated the performance of Mikolo Boltra more so. That's what I wanted to ask you. Like Tim and I so many of our conversations for a long time, and I do feel like we're getting increasingly away of thinking about the COVID impact. But what happened to you guys during COVID that has stayed with you in terms of corporate strategy and how

you relate with consumers. That's very a very good question. So when you think about brands, UH and UH commercial trends in the industry, I could name three. So the first one, as we just spoke about this, health and wellness. For obvious reasons, people became much more health conscious. This has an impact on everything. In our case, we feel it. We feel the same. There was a very nice acceleration of Mikolo Boltra for example, as a consequence of that.

Second point is premiumization. Because beer, I mean beer is affordable luxury, right, so when people say, like, okay, things are complicated, I want to give myself some treat and then they can't afford great beers. So we see premiumization. Again. This is a trend that we see happening in multiple industries, but in our case, in the beer industry, it's a

very evident and strong trend. So back to your previous question on the global brands, they're all premium and they continue to be the big growth engine of the company because they're sitting over a gigantic trend UH for the industry. The third thing that I think we all feel it in our daily lives is e commerce. Because of the lockdown lives, people started getting used to buying things online

and for us, it's happening as well. So we've been investing significantly significant amounts of money on technology on building those platforms. Uh. And for example, another point that is probably going to be a curiosity for for for a lot of people. More than fifty percent of one of our net revenues they are they are already sold worldwide via digital channels. How does that work? For beer? Right? How does that work? So this is because those jobs, but this is sold from us to the clients, to

the retailers right, so to the entrade. So this is our business to business. These are business to business platform called bees. It's already one of the top ten e commerce platforms in the world. But imagine a company our size more than fifty percent of our netural revenes are already sold via digital channels. What about director consumer direct to consumers? Thanks for the question. This is our next endeavor.

So we have already in a few countries it's going to be able to get a little blight just click ultra sorry. So in the US specifically, we have strong partnerships with the big retailers that are that also have online versions like Walmart and so and so forth and Reasily and the ones you mentioned. We cannot operate in the US doing direct two consumers operations, but in multiple

countries of the world we can. In Brazil, it's uh, it already represents more than five percent of our total sales we sell direct to consumers there, and we're just about to launch like FIFL World Cup will be a big opportunity for us, especially in Latin American markets because imagine how many people will be watching the games at home and feel like, oh, I should have ordered more beers. So we're launching Tada. I've already had a six pack and I can't go out, So yeah, I'm just kidding.

So so so we're launching Tada Tada right, which is our our new global brand for for director consumers in more than ten countries in the second semester of this year. And this has become this is growing very fast. Marcel our beer trends among consumers, I mean, it's probably stupid question, but I mean are they the same? Like do the trends that change? Is it the same or different markets? And what consumers are different? Like how different are some

some some trends? Are they some things? They they hit the trends the different markets, uh and with different intensities, but they're the same like the mega trends, as we say, like primealization, healthy well in the commence, these are mega trends. But for example, beyond beer is something that is not equally split yet. So you see like the US, for example, having a very meaningful market already for beyond beer, I mean Selter's ready to drink cocktails, heartease and these kinds

of products. It's already tennish percent of the total industry in the US. It's very sizeable. In other markets, it's still more at the early stages. So this is one trend. It is a trend everywhere, but it's still unevenly distributed. For example, this is what brings a lot of female drinkers. You're asking me offline about it, right, So it brings a lot of female drinkers into the business, a lot of younger consumers into the business. It's ruin a lot.

We used to say, it's inclusive, incremental, and profitable. So it's a great business to be part of. Where people say non alcoholic beer, do you like, oh my god, please don't say that, or do you say Okay, we're we're you know, we're in it. We we we learned,

we learned something from experience. Like if you want to say that we were consumer centric for real, we can never say, oh no, don't talk to me about it because if consumers are looking after those solutions, we need to be best in class and giving it to them. And non NOWC is a trend as well because it

is connected to health and aroundness. What are the gro what's the growth you're seeing a non alcoholic We're seeing double digit growth, but from a small base right yes, in the US, for example, it's around one percent of the industry. In Europe it's closer to ten, between five and tents, so it's a different kind of conversation, but it is growing everywhere. What's your brand? What are your brands that are not alcoholic? We're the leaders in the West.

For example, we have Bush on NOWK, we have what those or those no now but are leading brand in terms of growth. Now because it's more recently, is bud zero uh fifty calories, no sugar, zero point zero alcohol. It's a great it's a very modern liquid. We just launched it Stella no nowc in Europe we're piloting this in the US now and and uh, the heavy heater that we have now is Corona. We're having multiple markets in Canada, in Europe, we're studying this in Latin America

as well. And it's amazing because for you to have the taste of a real Corona with the line whenever you're looking for a non now proposition, it's just irresistible. All right, it's been a rough day, rough week, or rough month. What you drink a choice? I always have my Miklo Botra at home, my Stella at home, and my cut Water at home as well, which is ready to drink cocktail. That is just amazing night sometimes yes right, not got to do it for work. Part of his

job making sure you know your product. This was fun. Come back, please, let's think so much, Mama Condes. He is chief marketing officer at A B in bab and lucky for us here in our Bloomberg Interactive Broker studio, it's good to have be back. Carol, welcome back to be back. It would be even better if we had a nickel. All right, let's go, We'll go one next time. This is Boombart