Carlos Brito, that’s gone Anheuser-Busch InBev this week at the age of 61, he already anticipates a long second act. “Brito 2.0” could involve another quarter of a century of work, said the Brazilian entrepreneur who spent three decades at the brewery.
“My father.” . . he was a vascular surgeon until his 86s. . . I have 25 years ahead of me, at least 25 years, ”he said.
Brito has built AB InBev from a Latin American regional player into the largest beer company in the world, with brands including Budweiser and Stella Artois.
But his last few years have been overshadowed by his biggest, most controversial deal, the £ 79bn takeover of rival SABMiller in 2016. AB InBev’s share price is more than 45 per cent below where it was when the deal was completed, and is still packed with $ 83 bn of debt.
AB InBev’s aggressive deal defined a period of consolidation that cemented the dominance of a handful of global beer producers. Brito leave the company – and industry – transformed since joining what was then Brahma in 1989.
Trevor Stirling, a Bernstein analyst, called him “one of the three titans who formed the modern brewing industry,” alongside former Heineken boss Jean-François van Boxmeer and late SABMiller boss Graham Mackay.
In many ways, Wall Street’s vision of BritoThe inheritance agrees with that of the former chief executive. “We left a country in Latin America, a country in Europe, and we built a world brewery. . . one of the first three CPGs [consumer packaged goods] companies in the world and the highest for profitability, ”he said.
“It has clearly created a lot of value for its shareholders,” Stirling agreed.
With AB InBev gathering from the back of the pandemic – it has reported much better than expected first quarter results – Brito gave the reins to Michel Doukeris, a 25-year veteran company known for brand creation and digital sales.
“He’s very competent; he’s better than me, ”Brito said, citing his successor’s successes in Mexico, Brazil, China and the United States.
Doukeris ’career reflects the evolution of AB InBev into a truly global society, which Brito argued would not have happened without the SABMiller agreement. “It was the right thing to do,” he said, for a brewery that thinks “not just for the next few years, but for the next 50, 100 years.”
But he admitted that Covid-19 had resumed AB InBev’s debt reduction plans for about two years, and preferred to highlight Anheuser-Busch’s 2008 hostile takeover.
This offer came just before the global financial crisis. “We needed 10 banks by the end date to come up with a couple of billion dollars each and some banks were just disappearing every day,” he recalled. But once AB InBev got that funding, “we never looked back.”
The age of megadeal manufacturing is over, Brito acknowledged, although smaller-scale trading continues. This, analysts said, has put more pressure on AB InBev to build brands and grow biologically, although its scale has not always helped its agility.
One example is the hard seltzer, the aromatic sparkling alcoholic water that has taken the storm over the beverage market in the United States. In 2016 AB InBev acquired the pioneering brand, SpikedSeltzer, only to be overtaken by new rivals White Claw and Truly; remains behind those brands, despite gaining market share this year, according to Bernstein.
“I think sometimes, perhaps, we take more time to embrace some change,” Brito admitted, because the dimensions of society have made it prudent to cannibalize its enormous existing profit factors.
Without acknowledging that the U.S. beer market is declining, he predicted that non-beer products like hard seltzer would grow in importance. “What people call the fourth category, which is the blurring of beer, wine and liqueurs. . . endangers[s] a section of existing categories, legacy categories. “
Expectations of top executives grew at the time of the drinking habit during Brito’s reign, but he said AB InBev would not be “an activist society” by campaigning on issues outside its heart. mandate.
“The biggest challenge today.” [is] that people think CEOs and companies need to have an opinion on everything, ”he laments.
Investors ’new focus on environmental, social and governance issues, or ESG, might seem like an awkward fit with AB InBev’s embrace of zero-based budgeting. However, Brito painted the 3G system backed by capital in which every cost must be justified again in each balance sheet period as for a greener society.
“Everyone. . . it requires companies to manage waste so that we minimize the impact on the planet. So all of a sudden, efficiency has become a great thing, ”he said.
Companies now need to understand that their communities “allow you to exist only if you are part of the solution,” he said: “The moment you are portrayed as part of the problem, they will not kill you, but you I will regulate, I will tax you, I will limit your business ”.
Brito has ordered governments not to raise taxes on companies like soy to pay their Covid-19 expenses, but to impose the burden on those who have benefited from the pandemic.
“When they raise taxes to pay Covid incentives and things, they have to go after companies that need to share their wealth because they have consumers who have been pushed towards them,” he said. Some companies have tripled or quadrupled their market value: “We don’t.”
Brito has not yet settled on his next move, but has not ruled out another executive role, nor will he work again with his mentor, 3G co-founder Jorge Paulo Lemann, who funded his education and he hired it in the bank in his 20s.
The calls Brito received after announcing his departure suggested he had “a lot of options,” he said, and planned to spend July and August to return them.
But he expressed little doubt that this was the right moment to give up the company he formed. “We have to pass the baton to a new generation, otherwise they will go elsewhere,” he said. “If the CEO stays forever, the machine won’t work.”