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Bonus: Beer is Flowing Again · Stephanomics

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  Speaker 1: Hi. I'm Andy Brown, the editorial director of the Bloomberg
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  Speaker 1: New Economy. I'll be with you for the next few
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  Speaker 1: weeks sharing highlights of my video broadcast called on the
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  Speaker 1: front Lines and Bloomberg New Economy Conversations, which look at
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  Speaker 1: how COVID nineteen is reshaping the global economy. You can
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  Speaker 1: find them all on Bloomberg dot com. One of the
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  Speaker 1: first global consumer companies to feel the impact of COVID
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  Speaker 1: nineteen was the beer giant A b InBev, whose brands
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  Speaker 1: include Budweiser, Corona and Stella Artois. A Bienbev operates a
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  Speaker 1: brewery in Wuhan, China, where the pandemic began and which
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  Speaker 1: was the world's first city to go into lockdown. But
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  Speaker 1: as life returns to normal in Wuhan and cities all
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  Speaker 1: over the world, beer is flowing again in record quantities.
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  Speaker 1: For a b InBev CEO Carlos Brito, this and around
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  Speaker 1: in Fortunes tells an optimistic story about mankind's ability to
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  Speaker 1: rebound from this catastrophe. Ultimately, he says, humans are social creatures.
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  Speaker 1: COVID nineteen may have pushed us temporarily into isolation, but
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  Speaker 1: it hasn't killed our urge to gather, to cultivate friendships,
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  Speaker 1: to celebrate. Cheers to that. I hope you enjoy this
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  Speaker 1: and other interviews on how the coronavirus is transforming the
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  Speaker 1: business world. And thanks to Stephanie Flanders for letting me
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  Speaker 1: hijack her feed. Carlos Brito, Welcome to the program. Thank
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  Speaker 1: you glad to be here. Andrew, So, you were one
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  Speaker 1: of the very first global consumer companies to feel the
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  Speaker 1: impact of COVID nineteen. That's because you operate a brewery
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  Speaker 1: in Wuhan, China, which of course is where the outbreak.
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  Speaker 1: And tell us a little bit about what happened in
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  Speaker 1: Wuhan and how's the situation there today. It's interesting you
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  Speaker 1: asked this, Andrew, because in January and the first week
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  Speaker 1: of January, first ten days, I was in China and
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  Speaker 1: I traveled, you know, throughout five different cities. We had
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  Speaker 1: wholesale of conventions, we had people from all over China.
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  Speaker 1: Ain't directed with everybody. Everything was normal. Then it came
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  Speaker 1: back ten days later the whole thing in China started
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  Speaker 1: with the lockdowns and the travel restrictions. During the first
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  Speaker 1: day of Chinese New Year. In Uhan, we have one
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  Speaker 1: of our close to forty breweries. We had a big
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  Speaker 1: operation in China. It's one of our top five countries.
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  Speaker 1: We have thirty thou colleagues there and Whan. Yes it's
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  Speaker 1: a big brewery, but it's one of many. And UH
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  Speaker 1: everything in the country went through through a lockdown and
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  Speaker 1: shut down consumers, businesses, everything for a month and a
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  Speaker 1: half and then we started reopening and Johan when was
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  Speaker 1: was one of the last brewers to reopen. But now
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  Speaker 1: for the past two months, everything is back to normal
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  Speaker 1: and China as much as it can be. When you
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  Speaker 1: look at retailers, bars, restaurants, everything, they're pretty much all open.
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  Speaker 1: Our officers back to normal since two months. So China's
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  Speaker 1: way ahead of the curve. And the same with Korea.
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  Speaker 1: South Korea we have also big business there and they
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  Speaker 1: also experienced the COVID as China did in the end
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  Speaker 1: of January, and they're all back to the new normal.
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  Speaker 1: So is Wuhan a bell weather for global consumption trends city.
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  Speaker 1: I think we learned a lot in China. I think
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  Speaker 1: one of the big advantage of being a global company
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  Speaker 1: and we operate in all continents UH and have big
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  Speaker 1: you know, business around all the major countries. The big advantage,
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  Speaker 1: as you said at the beginning, was that we learned
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  Speaker 1: from China early on how to be able to operate
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  Speaker 1: guaranteeing the safety of our people, how to observe and
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  Speaker 1: to understand where consumers are going in terms of their consumption,
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  Speaker 1: how to adapt our supply chain to the new reality.
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  Speaker 1: And when the pandemics started becoming, you know, going to Europe, Africa,
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  Speaker 1: the America's, we had the protocols that were developing China,
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  Speaker 1: South Korea, bar our colleagues on how to operate. So
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  Speaker 1: all I had to do is pretty much translate everything
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  Speaker 1: and uh because you had to observe social distancing, for
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  Speaker 1: example within the Brewers, so you had to operate with
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  Speaker 1: fewer people, you had to work from home. You had
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  Speaker 1: consumers now not being able to go to bars, restaurants,
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  Speaker 1: hotels or travel, and a lot of occasions migrate into
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  Speaker 1: the in home occasion. And with that consumers buying more
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  Speaker 1: in supermarkets, grocery stores, and that had to being impact
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  Speaker 1: on the supply chain in terms of package mix, brand mix,
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  Speaker 1: you know, in terms of delivery distribution. So agility was
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  Speaker 1: something that we learned from China that was very key
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  Speaker 1: to navigate given the fluidity of the situation and uncertainly
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  Speaker 1: because every country was a bit different in how a
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  Speaker 1: pandemic developed, in what measures governments took in different countries
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  Speaker 1: in terms of lockdowns, stay home type mandates, and our
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  Speaker 1: consumers also reacted. But the learning in China was key
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  Speaker 1: for us to navigate in Europe, Africa, the America's you've
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  Speaker 1: just announced record be a sales. It seems as though
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  Speaker 1: people count wait to start drinking it. And what's driving
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  Speaker 1: this and is it sustainable. It's interesting you asked that
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  Speaker 1: because in China, because it was the first country, the
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  Speaker 1: big country of ours that was affected, we did a
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  Speaker 1: lot of consumer research during the pandemic, and what we
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  Speaker 1: saw is that the question was what would you like
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  Speaker 1: to do once the pandemic is over? And what they
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  Speaker 1: told us is that they would I would love to
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  Speaker 1: go back to their normal left So they'll love to
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  Speaker 1: go to restaurants, to travel, to meet their friends physically,
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  Speaker 1: to go with its relatives, family members, and uh and
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  Speaker 1: do all these sorts of things, go to ball games,
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  Speaker 1: go to music festivals. So that gave us a little
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  Speaker 1: bit of an insight that yes, they will be a
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  Speaker 1: new normal. But the fundamental things that consumers are trying
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  Speaker 1: to do when they have free time and in trying
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  Speaker 1: to keep a close relationship with family and friends are
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  Speaker 1: still very much deep inside of them, and we don't
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  Speaker 1: think those things will change. There is obviously a colossal
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  Speaker 1: global industry, but it's also very local. You're literally everywhere.
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  Speaker 1: Take us around the world. Where are you seeing positive
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  Speaker 1: consumption trends? Where are the problems? Well, if you look
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  Speaker 1: at our you're very right, and our business is global,
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  Speaker 1: they're very local. At the same time, if you look
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  Speaker 1: at everything we sell, what of all we sell the
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  Speaker 1: supply chain of that local. We buy raw materials from
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  Speaker 1: farmers that are local. We use water local, We hire
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  Speaker 1: our colleagues locally, we brew locally, We sell back to
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  Speaker 1: consumers locally. So we are very connected to our communities
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  Speaker 1: and that's right. During COVID, once again we tried to
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  Speaker 1: be in a big way part of the solution and
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  Speaker 1: we provided in many countries hospitals. We used our trucks
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  Speaker 1: that were idle to help governments distribute food. We we
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  Speaker 1: get we we we We started producing face masks, face shields,
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  Speaker 1: alcohol sanitizer, hand sanitizers because we deal with with non
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  Speaker 1: all call beers. So the alcohol extracted from the non
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  Speaker 1: all call beer we repurpose to hand sanitizers. So we
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  Speaker 1: did all these things because again we're part of the community.
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  Speaker 1: Our colleagues and our consumers live in the community, so
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  Speaker 1: that was something that was key for us. It was
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  Speaker 1: key for us also we learned learning from China to
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  Speaker 1: establish those priorities very clear day one. First priorities safety
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  Speaker 1: of our colleague. Second, our communities. Third our consumers. All
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  Speaker 1: to support them at home with the entertainment, with streaming,
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  Speaker 1: with delivery services, so they because they had to be
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  Speaker 1: at home. How to support the supply chain be upstream.
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  Speaker 1: Our suppliers are downstream, our bars, restaurants, pubs, our retailers.
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  Speaker 1: We did lots of things to support them to bridge
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  Speaker 1: this lockdown, and at the end, how to support again,
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  Speaker 1: how to be prepared for the recovery because we knew
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  Speaker 1: the recovery would come, and how to understand the new
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  Speaker 1: normal and our consumers will Talking about the recovery of
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  Speaker 1: the new normal, there's a lot of concerns that many
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  Speaker 1: bars and restaurants in cities will never reopen. What are
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  Speaker 1: you seeing and then what generally how seriously do you
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  Speaker 1: take this idea that COVID nineteen contribute this sort of
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  Speaker 1: stampede out of cities. Well, in terms of bars and restaurants,
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  Speaker 1: are very committed to their recovery in many countries, are
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  Speaker 1: getting together with other CpG companies like in Brazil for example,
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  Speaker 1: and we are there to finance they are coming back
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  Speaker 1: to business, to finance that first purchase when they reopen,
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  Speaker 1: to provide them with a reopening kit in sanitizers, gowns, gloves, everything,
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  Speaker 1: and to also give a discount on some key s
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  Speaker 1: kus key products so they can get back to business.
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  Speaker 1: When you look at our supply chain, most of our
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  Speaker 1: farmers that we buy from our small farmers fifteen thou
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  Speaker 1: of them. And of the six million retailers that we
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  Speaker 1: service on a weekly basis throughout the world, most of
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  Speaker 1: them are small and medium businesses. So our successes very
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  Speaker 1: connected to their success and that's why we're so connected
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  Speaker 1: to having them recovering from this whole pandemic that affected
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  Speaker 1: them a big way. So, for example, one of the
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  Speaker 1: things we did during the pandemic was too fold first
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  Speaker 1: to launch it in many countries, in more than twenty countries, vouchers,
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  Speaker 1: so consumers could buy vouchers to help the retailers while
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  Speaker 1: they were closed their favorite pubs, and then redeemed that
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  Speaker 1: when the pub would reopen. And the second thing is
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  Speaker 1: that we put very quickly, because we have a very
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  Speaker 1: very big tech team inside our company. We put in
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  Speaker 1: place um apps that would connect consumers that were in
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  Speaker 1: stay home type mandates in orders with our retailers that
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  Speaker 1: were in shutdown. But they need each other, so we
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  Speaker 1: put that app to connect them. And in the Americans today,
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  Speaker 1: this app is already a big deal. We have hundreds
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  Speaker 1: of thousands of retailers that are connected in hundreds of
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  Speaker 1: thousands of consumers that are using it. So we did
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  Speaker 1: everything we could during and now after the pandemic to
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  Speaker 1: make sure this uh pub's restaurants will come back. So
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  Speaker 1: it seems pretty likely that more and more people will
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  Speaker 1: work from home permanently after this, even after the pandemic
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  Speaker 1: has has gone away. Does that concern you? Does it
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  Speaker 1: affect you in any way? A few after work drinkers. Well,
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  Speaker 1: our our offices, for example, if you take us as
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  Speaker 1: an example, we've always worked in open, open plan offices,
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  Speaker 1: you know, so nobody has an office I'll work in
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  Speaker 1: a big table with my direct reports around me. Everybody
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  Speaker 1: can see me, everybody can come talk to me. There's
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  Speaker 1: no doors, no assistance, blocking anything. So we we've always
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  Speaker 1: done that for now thirty years because we believe that
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  Speaker 1: people have in contact with each other is very important.
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  Speaker 1: So for example, I think zoom and this kind of
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  Speaker 1: technology can bridge you know, during the pandemic, you know
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  Speaker 1: much better than I thought, and I think most people thought.
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  Speaker 1: So it's very efficient. But it does not replace the
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  Speaker 1: experience of people bumping to each other, having a coffee
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  Speaker 1: at a break, having a beer at the end of
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  Speaker 1: the day. We have bars in our offices, so at
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  Speaker 1: the end of the day they can have a beer,
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  Speaker 1: talk about business, talk about life. It doesn't replace the
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  Speaker 1: traveling a lot of my routine, for examples, traveling to
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  Speaker 1: all these countries around the world, and when you travel
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  Speaker 1: unique host other you need clients, You see consumers while
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  Speaker 1: they're shopping, You ask consumers questions. So all those things
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  Speaker 1: are not programmed interactions that cannot be replaced easy by zoom.
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  Speaker 1: Zoom can replace what's programmed. So meetings that are you know,
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  Speaker 1: in your calendar, but these things that happen as you
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  Speaker 1: go through markets and you see people buying, and you
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  Speaker 1: see your people in action and interact with the customer,
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  Speaker 1: and you visit the whole salter, this thing's technology can replaced.
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  Speaker 1: So I think, yes, there will be some flexibilization after
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  Speaker 1: work environment. But I think people find that after a
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  Speaker 1: couple of months. You know, for example, suppose you have
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  Speaker 1: somebody new join your company. How can this person it's
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  Speaker 1: not fair with them that we continue the whole life
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  Speaker 1: like this, because they will now be able to understand
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  Speaker 1: how the company works, how the culture is all about,
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  Speaker 1: because they won't be able to interact with people. So
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  Speaker 1: I think what's happening now is that we're using a
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  Speaker 1: lot of the social capital that we've been accumulating. But
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  Speaker 1: there's a limit. At some point you have to accumulate
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  Speaker 1: more captor in the bank in terms of your colleagues
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  Speaker 1: and how well you know them. The last question, your
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  Speaker 1: entire business model depends on bringing people together. Does that
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  Speaker 1: change in any way as a result of COVID nineteen.
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  Speaker 1: Do we become less social or the opposite? No? No,
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  Speaker 1: I think what changes is that, for example, starts from
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  Speaker 1: the culture of our company. Our culture is a culture
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  Speaker 1: of ownership in in that we treat the companies hours
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  Speaker 1: a culture of talented people, big dreams, and more importantly,
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  Speaker 1: a culture that we go where consumers go because that's
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  Speaker 1: where growth is. So what we've been observing during this
• 13:39
  Speaker 1: pandemic is that consumers have the same needs of getting together.
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  Speaker 1: It's yet that just that because of all the restrictions,
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  Speaker 1: they had to use technology to do so. But what
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  Speaker 1: you also observe is that as as as soon as
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  Speaker 1: these restrictions are easy, consumers go back and try to
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  Speaker 1: regain the ground they lost in terms of physical interactions.
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  Speaker 1: Of course, sure, of course consumers are more cautious, they
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  Speaker 1: are more you know, they're looking more at social distancing,
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  Speaker 1: wearing mass and all that. But at the end of
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  Speaker 1: physical contact, we believe the new normal will have it's
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  Speaker 1: yet to be defined, but consumers will go to some
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  Speaker 1: old habits because those are have been ingrained forever. I mean,
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  Speaker 1: human being is a social animal. We like to be
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  Speaker 1: together with people and the yes, technology can bridge lots
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  Speaker 1: of things, but at the end of the day, the
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  Speaker 1: human beings the human being, and I think the new
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  Speaker 1: normal will entail lots of things that used to be
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  Speaker 1: the old normal. For sure, Carlos Pretta, it's great to
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  Speaker 1: have you on the program. Thanks for your insights, thanks
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  Speaker 1: for your time. Thank you very much. I have a
• 14:44
  Speaker 1: great day. Thanks for listening. I hope you'll tune in
• 14:49
  Speaker 1: later this year for a digital edition of the annual
• 14:52
  Speaker 1: Bloomberg New Economy Forum, where business and government leaders from
• 14:57
  Speaker 1: around the world will talk about the challenge of bill
• 15:00
  Speaker 1: building a more sustainable and equitable post COVID economy.