Anheuser-Busch CMO Discusses Strategic Shift: From Defending Market Share To Driving Growth
At one point in my career, I went from working for P&G in the U.S. to Eastern Europe. The shift in mindset was significant. Because the U.S. business was so big, we had more risk aversion. We worried about share loss and were extremely careful and measured with moves. Mentally, this was a defensive posture. When I arrived in the Czech Republic after the fall of the wall, it was the complete opposite. It was a mad rush for distribution and share, with major global companies jockeying to win. A competitor would do something on Friday and we were working on the weekend to address it. The objective was growth and the risk in such a market was in not moving fast.
Many big companies have much to lose and so they slip into a defensive mode to minimize risk. Of course, this mindsight can stifle growth. That’s why I was fascinated to talk with Marcel Marcondes, CMO of Anheuser-Busch who has helped steer a tremendous growth spurt for the firm. It was announced this week that there is a transition as Benoit Garbe will become the new CMO. Below is Marcondes’ insight on how he, working with the Chief Sales Officer and the CEO, shifted the firm’s mindset from defense to growth over the past nearly five years.
Kimberly A. Whitler: Why did you decide to shift the company’s focus?
Marcel Marcondes: Over four years ago, when Michel Doukeris got here as North American CEO, he defined a clear North Star. Although we were the largest brewery in the world and the U.S. we needed to start leading growth creation again. His vision,which became all of ours, was to be both the largest and fastest growing brewery. For short, this vision was translated into LFG – lead future growth. The mission was to not play defensive to protect our size but to embrace significant growth. It is one thing is to defend your position – quite another to drive growth. We should be the fastest growing company. This became our North Star. This was a big change.
Whitler: How did you make the change?
Marcondes: At that point, the CEO, head of sales, and myself worked together to put together a new commercial strategy. We had been working to protect ourselves – and this made us more company centric instead of consumer centric, and we needed to change our approach
We needed to become a people-centric company for real. We did this by focusing on three pillars: 1) portfolio rebalance (we used to be the Bud and Bud Light company that is in a segment in decline – we needed to shift to the growing segments), 2) reinvent our innovation machine (the fuel for the portfolio rebalance had to be new innovation), and 3) how our brands connect with consumers (media, sponsorship, with digital capabilities).
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Whitler: Can you elaborate on the mindset shift this required?
Marcondes: I believe that marketers often believe that their job is to change the minds of consumers. Instead, we as marketers need to adjust what we do to meet the needs of consumers. This is not about convincing consumers to buy something. This is about creating what consumers want to buy. This subtle mindset shift required listening intently to consumers. Learning more about them as humans and not statistics. The more we listened, the easier it was to adapt the company to create valuable innovations and relevant communications.
Whitler: What were some of the factors that enabled you to achieve the shift?
1) Have to have the right people who believe in the vision. There was a big reorganization.
2) We invested in tech to connect with consumers. We built online panels. We now can talk to thousands of consumers on a daily basis. No more focus groups that take weeks to set up. We are like CNN with a newsroom and constant engagement with consumers.
3) We are a house of brands. We had to shift investments from core to premium brands. We moved beyond beer (e.g., cutwater and canned wine). We really focused on going “beyond beer” and “premiumization”.
4) Next, it’s about innovation. It used to take two years to introduce a new product. Now it is 100 days. We have a pilot team called the Apollo team. This team develops the pilot and tests it. We have a second team that then takes recommended new products to market. We launched our first premium organic beer. Launched seltzer brands. We just launched a vodka brand.
5) We created an in-house digital agency called draftLine with more than 150 people. They connect data with creativity. This is about personalization at scale.
6) Introduced different KPIs. We moved from SOV (share of voice) to share of social media mentions. We are now the #1 in brewer in share of social media mentions. There is an economy of attention – it is hard to grab attention. We focused on moving from visibility to relevance. Our creative work received two awards my first year and now has received 111 awards this year alone. This required a big shift in risk taking. We have newsroom meetings weekly – track everything that is trending and try to ensure that when something is relevant and “on brand,” we are engaged.
Whitler: What are the results of this plan?
Marcondes: By shifting the portfolio and driving consumer-relevant innovation, we have more than tripled the net revenues coming from new products. That represents more than one billion in revenue. Roughly 20% of what we sell today did not exist four years ago.
Whitler: What are your thoughts on Benoit Garbe becoming the new CMO?
Marcondes: Our mantra for the last year and a half has been to not go back to normal, but to get better. With Benoit moving into this role, I know he’s going help push that idea forward in big ways to keep making this team and our work better so we continue to drive even more growth.
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