AB InBev CEO on Zero-Alcohol Beer, World Cup, and the Future of Drinking

Good to see you. And what brings you by MSG?

And our partners getting the city customers, people that come here to watch the games. Today is special to friends, have a chat. Are you a big Knicks guy?

It's good to see you. Cheers. I've never had a Michelob Ultra zero before.

So, this brand specifically, triple digits. We launched it over a year ago. It's turned to be the number one non-alcohol beer in the US. Fantastic, 29 calories, zero alcohol. A beer for every occasion.

So, I think that there is a couple of things coming together. The number one, to be brutally honest, is that innovation brought an incredible difference in the liquids. So, we invested a lot out of Belgium, our design and technology center. Today, you enjoy these zero-alcohol beers with the same taste of the regular beers, but without alcohol. And people want to enjoy their occasions. They want to be fit and ready. I know that you are training. So, that's why...

That's it. So, hydrate, non-alcohol beer, very healthy. You can take it, 29 calories. So, it's a good thing to have on your options. And I think that you can have a healthy lifestyle, you are training, you are doing everything that you like from working to exercising, then you can go and take a non-alcohol beer.

Yeah, we have a company that was built over the years through mergers and acquisitions. And today, you have this global platform, 120 countries. The company has operations physically, 135,000 people across 50 countries. And back in 2021, this was not yesterday, but is now 5 years in the making. We have decided that the platform was big enough and we had to go now through a new phase, which we call organic growth. And it's different, right? So, you come from a history and a culture of mergers and acquisitions. And now, you are in this phase of growing brands, connecting with consumers, innovating, and getting the platform to yield more out of the same assets. And I think that is being rewarded. So, the company is growing. Over the last 5 years, we have a mid-term outlook, as you know, 4 to 8% EBITDA growth. We've been delivering each and every year. We've been innovating a lot. So, example, non-alcohol, but think about ready-to-drink beverages. I know you are a neutral fan. And digital, we have our digital platform, BiiS. And all those things are combining on superior products, great innovation, and more opportunities to connect and grow with consumers.

Yeah, we are a house of brands. When you think about our company globally, we have like 500 different brands. Because we are in many countries. But the reality is that we have a group of brands, let's say 50 brands. We call them the mega brands. Brands that have scale, that fit to many different occasions for consumers, and that we are investing behind in our markets to grow these brands. And they command 80 to 90% of the growth that the company has. They can be some small brands, like Michelob Ultra non-alcohol, or they can be some of the big brands that we have as Michelob Ultra, which is the number one brand in the US now. We've been investing with a lot of discipline and consistency behind these brands. Each of these brands has a platform that can be music, can be sports, can be food. And these platforms, we are activating like executing them at global level. So, when you think about Michelob Ultra and the Olympic Games, Team USA, we just came out of the celebrations and the whole Olympic Games now during the winter. So, the brand is proudly brewed here. And its slogan is superior is brewed here. Right? So, the athletes, the emotions, the training, the sweating, but also the celebration. And when you tap into these territories with these brands, our brands have a lot of opportunities to grow, and we are pursuing these opportunities globally, servicing better consumers and customers, bringing innovation to the market, superior liquids, and more than anything, enabling moments of celebration, socialization, and friendships.

So, you can refer as complex. And I think that it's just like amazing, the fact that we have farmers in the US and farms, because we buy barley, we buy rice. I was the other day in Arkansas with the rice growers. We buy most of the rice that they grow there. We have in Idaho the barley suppliers. We have our own farms, where we grow hops. Then, we produce in the US cans. We buy cans as well, but we produce our own cans. And we have our brewers in the US and our wholesalers. So, the logistics is really from the farm to the tables and bars at home or bars or restaurants. We cover all aspects of that with our partners, being farmers, being distributors, being retailers.

There is a little bit of everything, but at the end, a good day is a day that you spend with your customers or learning from consumers or supporting and interacting with your team. So, no matter where I go, can be the football game or can be the trip overseas, always customers, always consumers, always time with them.

You will call it soccer.

So do I. I think that there is two sides of the World Cup. There is the Michel, who is the soccer fan, the football fan.

We are in the US. It's okay. It's loved anyway. So, on one side, the fan. I love the games. I love the excitement. I love to watch the match and to see people enjoying, celebrating. And on the other side, there is the business. For us, every 4 years, this is the biggest event for the sports on Earth. And people are very focused on the country, on the stadium. But actually, there is a much bigger amount of people who watch the games at bars and make the bar their living room, where they meet friends. Sometimes, they meet strangers. Sometimes, they are all supporting the same team, but they don't know each other. Sometimes, they are hugging and crying when it's final minutes or final penalty. And this is an emotion that cannot be replicated. It's only when the games start that you see people with this atmosphere and enjoying the game. So, I love both sides, the business one, but also as a fan.

It's an important moment for the brands. And during the month that happens depending on the country, you see very big uplifts. So, think about Brazil. So, this is bigger than life, right? So, the whole country stops to watch. And then you have places like if you go to Korea and Japan where people watch and they enjoy the sport, but life continues regardless what goes on during the World Cup. So, the lift can be a good lift globally when we have the events and the lift is often big for the host country, but it happens globally as well. So, it's a good occasion for us.

So, this is one thing that people sometimes don't know, but it's a great topic to talk because it is a huge amount of people involved in that. And believe you or not, but on the day that the last World Cup ended, our plans started to execute here in the US this summer. So, we have people that they are dedicated in the whole cycle for 4 years to plan everything. From how we change our packaging, how we organize the communication, how we bring customers and consumers from other countries to host them here in the local market, to the packaging that we're going to have, to the campaigns that we're going to run across the globe. Because we have a global campaign for Michelob Ultra and global campaign for Budweiser, but then in Colombia, Aguila is the brand. And Belgium, Jupiler is the brand.

No, we have a team who works on that. Of course, I'm looking at everything that the team is doing. Some of the big things like the campaign for Michelob Ultra maybe in the US or the global Budweiser campaign or the new package, but we have a team working on that and they know the drill and they work very hard on that.

Sometimes. Sometimes we can because sometimes you see something you say, oh, that's just so good. That's going to be a big hit. Sometimes people tell you that. So, we have cases for example, I'll tell you one that's very interesting. Last year, we were in the wholesaler meeting in the US and we had organized the Super Bowl lineup. And the Super Bowl lineup had Bud Light, Michelob Ultra, Stella Artois. And we showed the Budweiser campaign. And at the moment that we put it, the whole room went crazy. And I looked towards you here, Brendan, our CMO Marcel, and I told them, get this in the Super Bowl. And there was no spots available. There was no budget to cover for that. And I just told the team, go there, find a spot, buy it because this campaign is going to be a big hit. And it became the number one campaign Super Bowl last year. This year was different. I think that we all saw the Super Bowl campaign the moment that we saw it, said, okay. Okay, okay. Just go for it because it'll be great.

It was huge and it's incredible because I heard the same feedback from dozens of people. People come to me. Sometimes they know who I am and they say, thank you for that. It was great. I felt great. Sometimes they don't know who you are, but they see that you are wearing a jacket that has a Budweiser or a t-shirt. They say, hey, I saw your commercial. That was great. Thank you for doing that, whatever. And the team who produced, who backed that up, they did a fantastic job. So, then so proud of them. They did really well.