Anheuser Busch InBev 1Q15 Earnings Call Notes

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Craft strategy is regional

” in terms of crafts or specialties, the strategy in different places, of course, in different countries are slightly different because they are at different stages of development. In the U.S., for example, the segment is more developed than in other countries, of course. And here, we’re adopting the strategy very clearly of having more regional relevant brands.”

We’re outperforming in Brazil because we made the decision not to get caught up in the gloomy mood

“our guys in Brazil, which has been through tough years before, at the beginning of this year, they decided they were not going to be part of the bad mood or whatever that was in some other industries in Brazil. They decided that we would focus on the things we could control. We felt we had good plans in our hands. So we decided to keep our head down, focus on execution and out-execute competition in the marketplace, at least have that intent. I like to remind people that despite the bad mood or some poor macro indicators, the fundamentals in Brazil remain the same. So demographics, the fact that LDA is growing at a healthy pace, it’ll be a plus. The weather, the beer culture, the regional differences, middle class, all those things are there.”

Bud Light didn’t have support during the summer because it advertised so heavily with Football

“you have to remember that Bud Light for many years didn’t have much support as a brand during the summer because most of its investments was tied to sports and NFL, which in the summer doesn’t really take place. So it was a very low support season for Bud Light. Last year, we decided to — as you saw, we upped our investments in the U.S., one of the reasons being we decided to support Bud Light during the summer. And the results were quite impressive. So this year, we’re doing that again. So that’s one thing.”

Brand fragmentation is a reality

“brand fragmentation is a reality. It has to be managed, though. One of the ways to manage it is with technology. So for example, by increasing the use of smartphones with our sales reps, which is something we do, and using more algorithms, you can be better at your offer being tailored by a customer when you have a bigger portfolio. You also have to be smarter about how you split your market money and sales money in support of those brands. So we’re developing better models to check return on investment on both traditional and social media. So we are sharper on how to allocate resources behind brands”

You have to have salepeople who can help customers with assortments

“you also have to have better training of our people, so they can talk to customers and also try to tell customers and get insights to customers on how they should build their assortment because what we see these days is that some customers that went too wild on assortment lost business on a relative basis. And they keep asking themselves, “Why, if I’m offering more assortment, which is what consumers seem to want, how come I’m losing share of business to my competitor, my neighbor?” And what we — the insights we bring is that there is a point at which more assortment becomes like overwhelming to consumers. ‘

Some craft brews don’t turn very quickly creates challenges for the retailer that we need to help solve

“if you have some of those craft brands, for example, in the U.S., we’ve been proven. Data proves that some of them should sit outside of the cold box because they turn 1 six pack per month. And that, of course, doesn’t compare to a Bud Light that turns 6 packs in a day, right? So those are the things that with increased fragmentation, we need to do — we need to be smart about technology in our production, sales and distribution facilities. ‘