During a recent invitation-only seminar at Harvard Business School, a group of CEOs was asked to imagine four crises they would face during their average tenure: a health emergency, a geographic Political Conflict, Economic Depression, and Trade. war
For one participant in particular—Michel Doukeris, CEO of Anheuser-Busch InBev, the world’s largest brewer—the list hit home. “So, according to your research, I’m ready to retire,” he recalls telling the Harvard professor. “Because I’ve seen it all in the first two years.”
Doukeris was promoted to lead AB InBev (as the brewing giant is known) in July 2021. It was a baptism by fire, beginning with the height of the COVID pandemic, when millions of drinkers were on lockdown, or avoiding drinking in crowded bars. Then came Russia’s invasion of Ukraine, rising inflation around the world, and deepening trade tensions between the world’s two largest economies, the United States and China. And as if all that weren’t enough: Last year, a large number of Americans launched a boycott against Bud Light — AB InBev’s best-known and best-selling beer — after the company promoted it on TikTok. Transgender actress Dylann Mulvaney was hired for the film. The backlash briefly sent AB InBev’s stock down 20%, while the company estimated the boycott could cost it about $1.4 billion in U.S. sales.
Growing up in a small town in southern Brazil, Doqueris is a vivacious person. He joined the company aged 23 with degrees in chemical engineering and marketing, and spent his early career expanding its markets in Latin America, before being sent to China to oversee its Asia operations. At 51, Duqueris has no clear plans to retire (despite what he told a Harvard professor). But he says he gained an important insight at the seminar: For most businesses, hustle is the new normal. “Change is coming very fast,” he says, sitting in AB InBev’s office in Brussels on a rainy morning, overlooking the Belgian capital’s cobblestone square, with its towering 16th-century city hall. . “Bicycles are smaller than they used to be.”
For AB InBev, churn has been challenging lately. The company generated $59 billion in revenue last year, but its size hasn’t protected it from economic downturns. While third-quarter revenue rose 2.1 percent from the same period last year, beer sales fell about 3.1 percent in volume terms, thanks largely to economic woes in China, where revenues fell 16 percent in just three months. Decreased. “People are going to restaurants and bars less,” Duqueris told analysts, citing problems in China – a country where he lived for seven years, and strengthening his reputation among winemakers.
The company he leads has an extensive portfolio of beer brands, resulting from the acquisition of several beer makers in South Africa. St. Louis, Mo. (home of Budweiser and Bud Light); Brazil and elsewhere. (It is headquartered in the old brewing city of Leuven, Belgium, 17 miles east of Brussels.) AB InBev’s 2016 merger with SABMiller made it the world’s largest brewer, with the Netherlands’ Also ahead of Heineken and Carlsberg of Denmark, with around 500 produced. including global brands such as Michelob, Corona, and Stella Artos.
While AB InBev is publicly traded on the Belgian and New York stock exchanges, about half of the company is owned by a small group of Brazilian and Belgian shareholders, who exercise significant influence over its direction. “They’re very behind the scenes,” says Trevor Stirling, a beer analyst at Bernstein in London. “For these shareholders, this is their family legacy.”
With AB InBev breweries in 50 countries, Doukeris, who shuttles between the company’s central offices in Belgium and Manhattan, faces problems far wider than China. Some of these are described in the company’s annual report in the eight-page risk assessment: “Difficult economic conditions” is a key topic.
By Duqueris’s admission, the beer industry faces much bigger challenges than economic uncertainty — some of which could be long-lasting. Perhaps most worryingly, younger generations are drinking far less than their parents – a change largely driven by health consciousness. Among those under 34, the share who say ever According to a Gallup study last year, drinking has fallen from 72 percent to 62 percent since 2000, and only 40 percent drink regularly.
Slender and soft-spoken, Duqueris is a perfect example of this health consciousness (though not Tito Taylor). day good luck Meeting him in Brussels at 9 a.m., he woke up at 5:30 a.m., and worked out for 85 minutes, including a 35-minute treadmill run at his hotel gym—all through an Aura ring. is tracked which he wears on his finger. He says he is in bed by 9 at night, never later, and often earlier. You need to perform.”
Its own performance can ultimately be judged by how well it competes in one of the fastest-growing segments of the global industry: non-alcoholic beer. Indeed, AB InBev’s future growth may depend heavily on the marketing of these beers. That’s a stark contrast from the 2010s, when the company expanded rapidly through acquisitions. “In the last five or six years the directors realized there was no one left to buy,” Sterling says. “They realized that if they wanted to create value, they had to restructure the business.”
Kenzo Triboulliard — AFP/Getty Images
Zero-alcohol beers have gone from being a mass-market niche product in Europe to becoming “a type of growth everywhere,” says Duqueris. His strategy for expanding this market hinges on his preference for long-term planning compared to many Western CEOs—a practice he says he learned from his years living in China, when he Asian companies have seen decades of setting business goals. Dokiris says he’s thinking in terms of a “10-year plan.” “If you think about non-alcoholic beer as it was two years ago, probably no one would invest,” he continues, “but as we’re planning 10 years down the road, we decided to invest globally. We developed technology, which is very clean.
‘We need to make non-alcoholic beer taste like beer’
Technology has been the focus of a long, difficult effort within AB InBev. That much is evident inside the company’s headquarters in Leuven, a town where monks first began brewing beer 600 years ago, fermenting hops with polluted river water flowing through the city in the belief that This drink keeps fish safe from water. eat
Today, a strong yeasty aroma still permeates parts of Leuven, now emanating from AB InBev’s giant facility on the banks of the river. Inside the doors are vast halls with stainless steel fermentation tanks, and a vast tangle of 10 conveyor belts, where more than 8.5 million bottles and millions more cans zip by in a blur every day, 24/7.
But the center of operations is located in a quiet corner of the complex: the Global Innovation and Technology Center, or GITEC. For 14 years, AB InBev engineers have worked here with the goal of creating a formula for zero-alcohol beers that taste virtually indistinguishable from the alcoholic version. When he arrived in Leuven to oversee GITEC in 2010, AB InBev’s head of innovation, David de Schutter, says he was given strict orders: “We have to make non-alcoholic beer taste like beer,” he remembers. That the staff had told them. “This is the mission. Do whatever you need to do, but you need to get it.
Non-alcoholic beers are hardly new; The U.S. sold several during the Prohibition era nearly a century ago, including those manufactured by Anheuser-Busch. But previous attempts at alcohol-free beers by major brewers resulted in drinks that tasted burnt or cooked, or tasted off-flavored, and lacked the aroma of real beer. . They were either made too hot to drive off the alcohol, or the fermentation time was too short to recreate the beer’s distinctive smell and consistency. “To be honest, they tasted pretty bad,” Sterling says.
By the 2010s, brewers were in an all-out race to create the first mass-market zero-alcohol beer, and were pushing ahead on the flavor front. The industry’s first major breakthrough came when Heineken launched a zero-alcohol version in 2017, raising competition among others. They still represent a small portion of total beer sales, but since 2018, their sales have grown more than 10 times faster than alcoholic beers.
It took another three years for AB InBev to release Budweiser Zero, the first non-alcoholic version of a major brand. It was the culmination of a huge effort: The work involved researchers from several universities in Belgium as well as Oregon State University, de Schutter says. Engineers experimented with sugars and enzymes, tweaking the formula so the beer could be brewed at a lower temperature to preserve its flavor and aroma. AB InBev also developed its own technology to mimic the smell of beer.
The company declined to share its growth estimates for non-alcoholic beers, which it says are currently a “low single-digit” percentage of sales. AB InBev says it now has about 20% of the global non-alcoholic beer market (based on outside estimates of market size, its revenue would be about $2.6 billion). It has 28 brands, from Budweiser Zero to its latest release, Corona Cero (Portuguese for zero) – which made its grand debut at the Paris Olympics last July.
That particular formula, meanwhile, now sits in AB InBev’s flagship “Global Yeast Bank,” a refrigerated room with more than 2,000 yeast cultures at sub-zero temperatures, some decades old. Each culture is unique to a particular beer, so it can be brought to any of the company’s 260 breweries worldwide, ensuring that any brand can be brewed with the same taste. No matter where it is sold. Fortune was given a very rare tour of the facility, but without the CEO — only four staff members are allowed regular access, and Doukeris is not among them.
A 10-year plan, with a lot of uncertainty.
Dokiris, who says he drinks a variety of beers several times a week, has a long view of the market that is more promising than the immediate one. The weekend I met him in Brussels, he had flown in from New York for the Belgian Beer Weekend, an annual festival celebrating one of the country’s oldest traditions, whose grand central square is a It was transformed into a crowded, open-air beer hall. With hundreds of drinks on offer.
Inside the medieval city hall on the square, the country’s trade association, the Belgian Brewers, staged an ornate event, where brewers in fur-trimmed red robes marched solemnly through a hall hung with old tapestries. , and later knighted Dukerus.
However, the romance could not overcome the financial problems. “We’re not going to beat around the bush,” the organization’s president, Bernard Derikray, told an audience of brewers and government officials. He said beer companies have been hit hard by “rising inflation, rising labor costs and rising taxes” and many have been forced out of business.
For Doukeris, the task ahead is to protect AB InBev from the maelstrom—a task, he says, made easier by focusing on the long-term horizon. “When you project the world in 10 years, you realize that things are very rare today,” he says. “But the compounding effect of 10 years: it represents a real opportunity.”
