How is Marcel Marcondes, U.S. Chief Marketing Officer of Anheuser Busch InBev and the country’s most powerful beer marketer, adjusting to a world where the largest sources of sales and consumption of his products are on indefinite pause?
“We’ve never worked so much in our lives before,” Marcondes says from his offices at AB InBev’s U.S. headquarters in New York. “We pivoted everything.”
That includes amping up the company’s investments in ecommerce and delivery platforms to ensure beer drinkers had ubiquitous access to its products, but also reimagining all of its brands’ communications to focus on what Marcondes calls “meaningful connections” with consumers during a time of crisis.
AB InBev reallocated $5 million from its entertainment marketing spend into converting sports venues into blood drives to provide crucial resources for the American Red Cross. Bud Light’s Dive Bar concert series turned into a live-stream platform with exclusive performances from artists like Luke Bryan, Thomas Rhett and OneRepublic, doubling as a fundraiser for the Red Cross and other charities. Michelob Ultra, Stella Artois and the newly launched Bud Light Seltzer reimagined their existing relationships with sports, chefs and gaming, respectively, to create virtually relevant experiences with philanthropic components at their core.
“People really value, recognize and appreciate the brands that are really doing something for them,” Marcondes says. “We saw something very interesting [in the early days of COVID], which was consumers getting connected to the brands they know and trust instead of just going after whatever was new.”
That brand loyalty helped buoy AB InBev’s latest global earnings, for Q3 2020, in which the company reported a 1.9% increase in total volume sales and 2.6% lift in beer sales, driven by outperforming markets like the U.S. and Brazil. Marcondes is equally proud of other brand health metrics, like a 60% increase in social conversation connected to AB InBev’s products and significant upticks in brand consideration. “It shows the power of being relevant and taking tangible action to be meaningful to your consumer,” he says.
Brand Innovators caught up with Marcondes to learn more about his pandemic pivots from sports to ecommerce, the spike in hard-seltzer consumption and why planning for Super Bowl LV remains “very fluid” — and may even stretch past the holidays this year. The conversation has been edited for length and clarity.
Brand Innovators: 2020 has obviously been a game-changer for your company and your category. What steps did you take to pivot your business and messaging during the first weeks of COVID-19 lockdown?
What a year for everybody. So the first impact was really intense because you can imagine what happens for a beer and alcoholic beverages company when all the restaurants shut down, all the bars shut down, all the sports events shut down, all the birthday parties stop happening, all the music concerts get canceled. Pretty much the bulk of our consumption shut down. So for an industry like ours, this was really really serious.
So what we did was become even more obsessed about understanding consumer behavior. We’ve been investing for a long time already in new technologies because we are a consumer-centric company, and we’re always trying to raise the bar on the way we interact with our consumers. We have some online panels where we can reach out to thousands of consumers on a daily basis all over the country, for example. And we used those like never before, we were talking to consumers everyday, so what’s hanging in your routine, what do you need, what’s going on with you. We could talk to consumers everyday to understand what was going on with them.
So as we had a very good pulse of what was going on with people, we ended up working in three phases and we evolved the kinds of actions we took as a company with the evolution we noticed happening from a consumer perspective.
What did Phase 1 look like as all public consumption of your drinks disappeared?
Phase 1 was identifying that people did not want to hear from brands. It was all about safety. “How can I be safe, how can I protect myself from getting this virus, and how can I make sure our community is safe?” So immediately we said, “Ok, the first thing we need to do is address this as a company, We’re a big company, it’s time to focus on that.” So we had to get intentionally organized around what we call ideas for good. Then we came up with tangible actions like hand sanitizers. We converted some of our breweries to start producing hand sanitizer instead of beer so we could help with the supplies in the country.
The second big thing that we did was the One Team program. Especially from a marketing perspective. We’re connected with all the leagues that we sponsor and the networks and we said, “It’s time for all of us to get together because everything’s getting canceled.” And one thing we identified when we started talking to our partners was that many hospitals across the country are getting close to collapse because the blood reserves were really low. The American Red Cross told us, “If there’s one thing we need, it’s to resume the blood donations and blood drives.” We gathered all the teams and told them we need to convert all the sports venues into blood drive centers to continue to supply blood to the hospitals. It was a huge thing, and still today in many states and many cities we’re doing blood drives in sports venues.
And then the third big program we developed was to support the segments more connected to our industry, especially bars and restaurants. We came up with the Open for Takeout program with Bud Light, which was all about gathering all the information about bars and restaurants that were offering delivery and takeout so consumers could use those bars and restaurants to buy food, beverages and things like that.
How did this start to impact your event sponsorships and activations?
When we saw that home entertainment became the most relevant way of entertainment because everything else shut down, we developed a streaming program to do live-streaming for music concerts with Bud Light Seltzer. Then we used that platform to raise funds for the Red Cross. It was always a 50/50 approach: we gave something meaningful to the consumer, and at the same time we supported segments of society in need.
And the other thing we saw was everybody learning how to better cook at home. We started to see a lot of searches on how to improve their skills in cooking from Google. So we came up with a food platform for Stella Artois where we brought chefs and celebrities, giving tips to consumers on how to elevate their meals at home. And with that, we were giving consumers the opportunity to support restaurants that were closed so they could survive that period.
We also saw, for example, that gaming became a big consumption occasion for beer. Gaming exploded and this became a meaningful consumption occasion. We doubled down our efforts on gaming and created an even bigger platform with Bud Light Seltzer. We created two big events with gaming and then we became the number one brand page on Twitch because of that. It was really nice and we raised funds with this gaming platform for the Red Cross and other charities.
Something else we saw was health and wellness became an even more relevant point of concern for people, as people couldn’t leave their homes and gyms were closed. We created a platform with Michelob Ultra that was all about home workout sessions. We brought celebs trainers, models, actors, actresses to train and we created home workout sessions for people that they could finish with a happy hour provided by Michelob Ultra because it’s our low carb, low cal brand. And we provided funds for gyms that were closed and suffering during this period.
So we provided all these ways for our brands to show up for their consumers in a meaningful way and connect to them with the new drinking occasions that we saw from consumers. But also keep up these good contributions to groups and segments of society in need.
How did you pivot your direct-to-consumer channels to meet the increased need for ecommerce during this time?
We created a new team attached to Draftline, our in-house agency, that is now fully focused on direct-to-consumer, so we could have tailor made programs and platforms to connect with ecommerce. And on International Beer Day in August, we did almost like a Black Friday promotion where we had a lot of content with big discounts on ecommerce so we could bring more people in to our channels.
We focused on bringing people together. Although everybody was focused on distance from others, how could we give them a feeling of being closer together? And with everything coming back, especially sports, how can we make them be more meaningful. This is why we came up with the Michelob Ultra Courtside program when the NBA returned. It was a partnership we did with Microsoft and the NBA to have all those screens in the courts so the athletes could see real people watching the games, and people could feel closer to the court with exclusive views. It was all about trying to bring people using technology to provide valuable experiences in a different situation.
We did something with NASCAR as well, making fun of the cardboard fans with the NFL. We also had a wall where after the touchdown they could see the fans and do some fun celebrations with the fans. So we were trying to bring people more closely together.
And on top of that we’re supporting bars and restaurants so they can have a sustainable comeback for the business. In Chicago, we’re creating bubbles now [with Stella Artois] for some restaurants as it’s getting colder so they can still operate outside, and we’re going to continue to expand that. We’re doing QR codes for all the bars and restaurants so they can have touchless menus.
We’re trying to be disruptive and using technology to feel closer together, and provide resources to bars and restaurants so they can have a sustainable comeback and reopen in a safe way.
AB InBev recently announced Q3 earnings with strong results in the U.S. What’s driving that growth, and how are things pacing in the following weeks and months as more bars & restaurants start to reopen?
I think for the industry as a whole what we saw is of course, given that the on-trade bars and restaurants are close to 100% closed still, the off-trade supermarkets and convenience stores gained much more relevance to our business. The second point was ecommerce, these are the two big shifts that we see with the distribution as a whole, this had an impact on the industry overall.
I really believe during this period and year to date, we are as a company in the U.S., the company that is driving the largest – if you take all the growth for what in the industry we have the highest mix in terms of growth creation. We are the number one company in the industry in terms of sales and volume growth [according to IRI’s year-to-date 2020 data as of November 8.] I really believe this is also an effect of all the actions that I’ve told you, I think that we’ve managed to be ahead of others in terms of pivoting our plans to better serve consumers in all the changes we’re going through.
What newer product types that you’ve recently added to your portfolio do you expect will be primed for the most growth in the years ahead?
Seltzer for sure is the category that stands out. And it’s interesting because seltzer is bringing more consumers into the category, it’s bringing consumers form wine and spirits. During this period, seltzer is accelerating even more. This is why if you see Bud Light Seltzer was a bold move that we made this year, we launched it right before the pandemic and it was crucial that we did it right in that timeframe. But Bud Light Seltzer grew 3x faster than its launch month in January, and grew double the rate of seltzer as a segment, so we managed to go from zero to 10% market share within seltzers in just a few weeks [according to IRI.] So it was really, really fast.
Given the constant state of flux we’re in, where are you in your planning cycles for Super Bowl?
I don’t have much to say because I think one thing that is inevitable to all of us now is that the planning cycles we have to everything we do are much shorter. We’re changing everything that we’re doing, and the changes continue to happen. One day it’s “OK, restaurants are re-opening, restaurants are closing, COVID is going up, now it’s going down.” So things are very fluid still. This is why our planning cycles for Super Bowl will be much shorter as well. So I don’t have much to tell you, we’re still observing and feeling it.
So if you’re not shooting any Super Bowl spots yet and we’re two and a half months out from February 7, does that mean it’ll be a busy Christmas for you?
We are already at mid-November, so yeah, it’s gonna be a short notice. The action will happen for Super Bowl between December and January for sure.
Andrew Hampp is an entertainment marketing consultant for Brand Innovators and the founder of consultancy 1803 LLC, based in Berkeley, California.
