AB InBev CEO: Creative power drives efficiency

Strong creative work, combined with digitalisation and more precise data, is enabling alcoholic beverages company AB InBev to drive higher return on investment (ROI) with its marketing campaigns, the business’s CEO has said.

Sales and marketing investment as a percentage of revenue fell by 120 basis points over the last year and 140 basis points since 2017, Michel Doukeris confirmed on a call with investors today (24 February).

However, this “doesn’t really paint the full picture,” he said.

“On one hand, we are becoming much more efficient as we digitise. As we get more data, we can then tailor our investment much better by segment, by region, to the detail of clusters of clients. Through the usage of data we can be very precise,” he explained.

“Combined with that, our creative work driving our brands is also becoming much more efficient. So we are driving higher ROI campaigns.”

Doukeris noted that yesterday, AB InBev was awarded the ‘creative marketer of the year’ title by the organisers of the Cannes Lions Festival of Creativity. Lions CEO Simon Cook said AB InBev has “shown how creativity can be used as a lever to drive incredible success”.

Today, Doukeris claimed “creative power drives efficiency”.

AB InBev accelerated its growth over 2021 and grew its top line revenues by 15.6%.

“The full picture is more into how much money we are deploying for growth,” he explained. Last year the business invested more than $400m (£300m) to “continue driving the momentum and the power” of its brands, but with revenue up significantly, marketing as a percentage decreased.

“That is why our business has the momentum it has today and why we ended 2021 at an all time high,” Doukeris explained.

Digitalisation and DTC growth

In its fiscal report for its financial year, AB InBev reported EBITDA growth of 11.8%, at the top end of its previous forecast.

Compared to pre-pandemic levels, the business behind brands such as Corona, Budweiser and Stella Artois grew top line revenue by more than 10% and nearly recovered EBITDA on an organic basis. Full year global revenue surpassed $54bn (£40bn).

Nearly $1.5bn (£1.1bn) of revenue was generated by the company’s “omni-channel direct-to-consumer (DTC) ecosystem” of ecommerce platforms and over 12,000 retail stores, up more than 35%. The company’s DTC ecommerce platforms grew their revenue by 62% to reach over $500m (£374m) and deliver 66 million orders, more than double the previous year.

“That’s 66 million opportunities to capture data insights to solve real customer problems,” Doukeris said.

‘We’re building the plane while flying it’: AB InBev on the growth of its in-house agency

AB InBev highlighted the success of PerfectDraft, a counter-top machine that claims to serve bar quality beer at home. The product contributed over $170m (£127m) in revenue and expanded to 55% more households than in 2020.

Meanwhile, the business’s proprietary B2B platform Bees grew its monthly active user base to 2.5 million. The platform reached approximately $20bn (£15bn) in gross merchandise value with over 78 million orders placed, a greater than 6 times increase versus 2020. Bees is now live in 16 markets, with further expansion planned this year.

Altogether, AB InBev now has more than 2 billion consumers and 6 million customers through its digital ecosystem, generating over 10 million weekly transactions.

“We are investing to scale our global innovative technology products to become a tech-first FMCG company,” Doukeris added. “This is enabling us to turn customer pain points into opportunities for growth.”

Innovation and premiumisation

Creating cost efficiencies and digitalising its sales ecosystem were two of three new strategic pillars outlined by AB InBev last year, as the business announced a renewed focus on its purpose to ‘dream big to create a future with more cheers’.

The third pillar is to lead and grow the category, primarily through new innovations and growing its premium portfolio. The premium portfolio now represents approximately a third of AB InBev’s total revenue, delivering more than 20% revenue growth last year.

In 2021, innovations contributed more than $5bn (£3.7bn) in revenue, the company claims, making up approximately 10% of total revenue. Innovations include the double malt concept, which has been rolled out across more than 12 brands in 10 markets and contributed revenue of over $450m (£337m).

“Our commitment to lead and grow the category by investing in our brands’ innovation and creative marketing is already delivering results,” Doukeris said.

“We have been on a journey for some years now in better understanding insights and consumer needs. Innovation has been great to add to our current brands in segments that we have, as well as to allow us to tap into new occasions and gather more consumers around the products and offerings we have. This is becoming much more mature within the company as a process.”

He added that AB InBev is “prepared to continue to meet this momentum”.