Reuters logo
AB InBev replaces North America chief to stem sales slide
November 13, 2017 / 2:38 PM / 9 days ago

AB InBev replaces North America chief to stem sales slide

LONDON/BRUSSELS (Reuters) - The world’s biggest brewer, Anheuser-Busch InBev (ABI.BR), is replacing its North American chief to stem a years-long sales decline in its largest market.

The logo of Anheuser-Busch InBev is pictured outside the brewer's headquarters in Leuven, Belgium February 25, 2016. REUTERS/Yves Herman/File Photo

The maker of Budweiser and Bud Light said on Monday that Joao Castro Neves would be succeeded on Jan. 1 by another Brazilian company veteran, Michel Doukeris, currently chief sales officer of the global business.

“Neves had been viewed as a potential successor to Brito. If Doukeris can deliver on growth in the U.S., this would boost his chances for the top spot,” Jefferies analysts said.

Other contenders identified by the analysts are David Almeida, chief integration officer, and Ricardo Tadeu, president of African operations.

Brito said it was too early to speculate on CEO succession.

“It’s up to the board to make that decision. But for me, I’ve been here 20-plus years and I’ll be here another 20.”

Brito said he had discussed the departure of Neves with him for nearly a year and that it was a “personal decision”.

Doukeris, a 44-year-old Brazilian citizen with Greek heritage, last year moved his family to New York, the de facto headquarters of what is one of Europe’s biggest companies with a market value of about $200 billion.

The biggest challenge in the coming years will be to lift sales in the United States, where Bud Light is the largest brand with 19 percent of the market but has been in steady decline alongside mainstream lager rivals as U.S. consumers increasingly embrace wine and spirits.

BEER SHIFT

When they do drink beer, they are choosing more unusual craft beers made by smaller producers or imported beers, particularly from Mexico.

AB InBev has sold less beer in North America each year since 2014, with a steep 6.2 percent drop in the third quarter of this year.

“People are trading up,” said Liberum analyst Nico von Stackelberg. “I don’t think anyone is really hoping for dramatic volume turnarounds. Just stopping the bleeding is the hope.”

Sales volume for the U.S. beer industry was down 1.8 percent for the first nine months of the year and has been down for the past decade, according to Wells Fargo analysts. Per capita beer consumption is down 20 percent in the past 35 years.

Doukeris, who joined the company in 1996, has run its Chinese and Asia Pacific operations, helping to expand Budweiser globally, and launched its “High End” business strategy focused on growing imported and craft beers. AB InBev has acquired nearly a dozen craft beers in recent years.

Brito, who has run the company for 12 years, said the United States is the company’s most important market and that Doukeris is the ideal person to lead it.

The CEO cited Doukeris’s sales background, which differs from the likes of former U.S. chiefs Luiz Edmond, who excelled at cost-cutting, and Neves, who strengthened relationships with wholesalers.

“He’s very consumer-centric, he has a great commercial mind,” Brito told Reuters, adding that the company will focus more on category expansion and category management, approaches learned from SABMiller, which AB InBev bought a year ago for $100 billion.

SALES AND MARKETING FOCUS

Under Doukeris, analysts said they expected an approach that would prioritise pulling in consumers rather than pushing distribution.

Doukeris said “the real opportunities” are in how to better organise the portfolio for growth, adding that he would supplement a national strategy with identification of pockets within the U.S. where he could boost sales of Budweiser and Bud Light.

Separately on Monday the company announced five other North American appointments, including the promotion of Brendan Whitworth, a veteran of PepsiCo and the U.S. Central Intelligence Agency, to vice president of sales.

AB InBev shares closed little changed at 100.50 euros in Brusssels.

The company’s high-end strategy was launched in China and expanded to 22 countries while Doukeris ran the sales division, garnering the business more than $5 billion in global sales. But in September the unit announced a reorganization that included the loss of roughly 2 percent of its workforce, about 300 jobs.

Craft beer is off its double-digit growth rates but is still expected to grow at about 6 percent this year, compared with an overall beer sector that could be down as much as 1.5 percent, Susquehanna analysts said.

Brito said AB InBev would continue to look at acquisition opportunities in craft beer but at present he is “very happy” with the portfolio.

Reporting by Philip Blenkinsop; Additional reporting by Martinne Geller; Editing by Tom Pfeiffer and David Goodman

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below