A few years ago, the executive team at the world’s largest beer brewer, AB InBev, felt comfortable not being a digital company. “We had been around for hundreds of years, in a business that was not subject to disruption like technology was,” said David Almeida, the firm’s Chief Strategy and Technology Officer, in his interview with Latin Trade. “At technology companies, you can have a great product now. Someone can come, out-innovate you, and you disappear tomorrow.”
However, the company sharply shifted this view. It realized that the lack of a robust digital strategy increased its chances of becoming irrelevant in the future, Almeida stated. Amazon and Alibaba, for instance, had vast amounts of data on consumers, and more importantly, on AB InBev customers. “Over time they can build products that come into our space”.
The brewer was arriving late to the game, Almeida conceded, but the opportunity to build one-to-one digital connections with its stakeholders was still there. “We are a platform at the center of our ecosystem, and we believe that we have the unique opportunity to connect our hundreds of thousands of suppliers, the six million customers we visit on a weekly basis around the world, and the billions of consumers who love our brands”.
This year, Covid-related lockdowns greatly accelerated e-commerce adoption. Connecting directly to consumers became a critical matter. Direct-to-consumer projects jumped from seventh to second in the firm’s digital priorities, Almeida stated. “Long term, what is going to define if we succeed or we die is our ability to connect with the consumer”.
Along those lines, the company aggressively developed platforms like Tienda Cerca, and grew Zé Delivery and Tucerveza.do in Latin America.
But the consumer space is full of activity and competitors, he said. It would take time to develop appealing products and it would not be easy to compete head-on against Amazon in that realm.
That’s why the first spot in AB InBev’s digital transformation agenda is building a digital bridge to its customers (retailers, bars, and restaurants). “Short term, our biggest opportunity is our customer base,” he said. It is the segment where they can make the biggest impact and it is not crowded like the consumer field. “It is more like virgin territory.”
Third on its priority list is connecting 150 breweries around the world. Sensors at different stages of the process and AI software, monitor production to avoid waste and to improve product quality. The long arm of AB InBev’s IoT reaches its point-of-sale fridges. Algorithms plan maintenance, and significantly reduce problems of product going out of specs.
A digital firm?
How far does the beer maker want to take this strategy? “Ours is not a digital transformation for digital transformation’s sake. It’s about how can you transform your business using technology,” Almeida explained. “Our goal is not to become a technology company. Our goal is to become a better company, leveraged by technology.”
On the customer’s side, the brewer’s goal is to redesign connections. AB InBev wants to upgrade this relationship providing better services to increase their loyalty, but above all, by helping retailers expand their business. “It’s an ecosystem, not a zero-sum game. We can add value to them. Help them improve their business.”
On the consumer side, in the past, beer was big TV commercials, outdoors, and big sporting events, he said. Today, much more efficient internet channels can be used to communicate with each consumer individually. Upgrading AB InBev business centers around understanding and building better communication with consumers. “Do not interrupt them and provide relevant content”.
Examples of digital transformation:
Customers at corner stores. The minute Covid happened, AB InBev launched Tienda Cerca in Colombia. It is an online directory that allows households to connect with neighborhood stores, to get groceries delivered to their houses. The app-driven platform also allows the company to take orders from these small retailers. Furthermore, AI tools process the data collected from retailers to individually suggest new products, and even to offer financial services like credit and digital wallets, much needed to live through the pandemic and thrive afterwards.
Connect with consumers. “It is simple. The consumer has a pain point, we address that pain point”. This is the no-nonsense, business description of successful Zé Delivery in Brazil. The pain point was clear: customers wanted to get a cold beer in thirty minutes, at supermarket prices. With this idea, AB InBev gradually improved a solution that ended showing exponential growth. During the pandemic, “in one month we took the same amount of orders that we processed in the entirety of 2019. It’s a platform that’s flying”.
In March, right at the beginning of the pandemic, the company launched malt beer ‘Brahma Duplo Malte’ in Brazil. To power the launch, marketers offered a series of live music events to promote Zé Delivery and to have audiences sample the new beer. According to a recent company report, the lives got millions of views.