Carlos Brito will be a tough act to follow, but Anheuser-Busch InBev’s next chief executive doesn’t need his predecessor’s empire-building skills.
Michel Doukeris, who was tapped last week to lead the giant brewer when Brito retires July 1, inherits a company that sits firmly atop its industry but has struggled to keep up with changing consumer tastes. It also is weighed down by $83 billion in debt from Brito’s decade-long acquisition spree.
Brito, whom some St. Louisans still haven’t forgiven for the bold 2008 takeover bid that pushed the Busch family out of the beer business, built the world’s largest brewer through shrewd dealmaking and relentless cost-cutting. However, revenue hasn’t grown since he closed his last big acquisition, of SABMiller, in 2016.
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“They built this great empire, but now they’re saddled with this enormous debt and their business is smaller than before because of the pandemic,” said Benj Steinman, president of trade publication Beer Marketer’s Insights. “They need a somewhat different business model.”
Doukeris, a 25-year A-B InBev veteran, has run the company’s business in Asia and, for the last three years, North America. A statement from Chairman Martin Barrington praised his skills at innovation, brand building and consumer insight, which are exactly what the company needs if it is to start growing again.
Brito built the company to push big brands such as Budweiser and Stella Artois through an efficient distribution network. Young consumers, though, have turned away from mainstream brands to craft beer and other products, such as alcoholic seltzers.
A-B InBev has been a capable follower, but not a leader, in those categories. It has bought craft brands such as Goose Island and Kona and introduced Bud Light Seltzer last year. In seltzer, it ranks a distant third behind White Claw and Boston Beer’s Truly brand.
It has one solid, growing premium brand in Michelob Ultra, but sales of Budweiser and Bud Light have been slipping for a long time: Budweiser sales peaked in 1988, its lighter sibling in 2007.
Steinman finds it encouraging that the company’s North American beer volume grew 2.9% in the first quarter. “It’s not like they’re kicking ass and taking names, but they are growing again,” he said. “He (Doukeris) did turn that big boat around.”
Tom Pirko, managing director of California consulting firm Bevmark, notes that Doukeris faces a very different world than Brito did when he took the helm of InBev, the product of a Belgian-Brazilian beer merger, in 2006.
Tariffs, trade disputes and a pandemic have made it more difficult to do business across borders. Add in changing demographics, and the old rules of the beer business no longer apply.
“The model has to be different because the world has changed,” Pirko said. “The concepts of brands, brand loyalty and consumer choice are very different.”
Markus Baer, professor of organizational behavior at Washington University’s Olin Business School, said companies often need different leadership skills in different eras. Sharp-penciled Efficiency experts make the best leaders at some times; creative problem-solvers excel at others.
“The pendulum is constantly readjusting, and you reach a point where you need a leadership style and culture that is more supportive of innovation,” Baer said.
Brito, 61, built a great company, but his shareholders must wonder what happened to the promise of greater profits through market domination. With A-B InBev’s share price more than 40% below its peak in 2016, investors surely are ready for this swing of the leadership pendulum.