AB InBev: Three 2020 innovations that address today’s mega-trends
The success of these innovations – Bud Light Seltzer in the US; Brahma Duplo Malte in Brazil; and Nuestra Siembra in Ecuador – demonstrates a ‘thoughtful and well-designed innovation strategy’, according to Brito.
“We have been evolving this strategy over time to deliver superior products to consumers with increased speed and agility. This capability has proven especially critical this year as consumers adapt to a rapidly changing environment.”
Need for speed
AB InBev identifies premiumization and an increased focus on health and wellness as key mega-trends in today’s world. In order to maximise their potential, innovations need to be superior to others on the market; have long-term potential; and have the ability to be scaled up quickly if proven to be successful.
One of the biggest changes in AB InBev’s innovation machine has been the speed of bringing new products to launch, says Brito.
“We bring products to life through our dedicated seed and learn approach. This process has evolved dramatically. It used to take up to two years, and now we're driving toward a 100-day concept-to-launch timeline across all of our markets.
“We start with smaller local pilots, which allow us to gain critical learnings quickly by seeing how our product actually performs in market. This gives us more confidence, but when we do decide to scale our winning innovations, an approach we call prove and move.
“Our strategy has resulted in a portfolio of differentiated innovations that address common consumer opportunities in growing mega trends like premiumization, health and wellness, and purpose-driven brands.”
And innovation is not just a buzzword for Brito, who estimates that innovation contributed some $5bn to AB InBev's 2019 revenue.
Here are three launches which Brito says showcases successful innovation for the company in 2020.
US: Bud Light Seltzer
Bud Light Seltzer hit shelves in the US in January. The 5% ABV seltzer is made with cane sugar and natural fruit flavors, and comes in at 100 calories, 2g carbs and <1g of sugar per serving. The seltzer comes in four flavorsL Black Cherry, Lemon Lime, Strawberry and Mango.
The brand draws on the brand equity of Bud Light – the top selling beer in the US – and is just one of AB InBev’s entries in the booming hard seltzer category.
The success of Bud Light Seltzer – ‘the #1 innovation in the country so far this year’ – has helped boost strong results for the beer giant in the US in Q3, Brito reported last week. “Its volume is more than 40% incremental to the beer category and more than 75% incremental to our portfolio.”
AB InBev has already started expanding on the brand's success with the launch of Bud Light Platinum Hard Seltzer in September - this time with an elevated ABV of 8% to differentiate it from Bud Light Hard Seltzer and indeed the majority of other hard seltzers.
Brito notes that a portfolio approach - offering a number of differentiated products - will be key to conquering the hard seltzer market (it already offers a number of hard seltzers across different brands).
Brazil: Brahma Duplo Malte
Brahma Duplo Malte was launched in Brazil earlier this year.
“Brahma Duplo Malte is another amazing success story,” said Brito. “It delivers a new pure malt experience to consumers by blending Pilsen malt with the Munich malt, which results in a striking flavor profile.
"It's off to a strong start and is now the leader of the core plus segment in Brazil after only five months.”
AB InBev’s beer business in Brazil enjoyed strong volume growth of 25% over the latest quarter, and Brito credits the new brew with helping to drive this growth: “Our innovation portfolio contributed [to volume growth] in a relevant way led by Brahma Duplo Malte."
Ecuador: Nuestra Siembra
The 4.5% ABV beer was launched by AB InBev’s Ecuadorian subsidiary Cerveceria Nacional in July. It is part of a project called ‘Siembra por Contrato’ which involves more than 800 rice, barley and maize farmers – alongside associated small businesses.
“In Ecuador, our local crop innovation, Nuestra Siembra, was developed in partnership with the government," explains Brito. "It is supporting and developing thousands of farmers in the country while delivering incremental volume to the category.
"We're offering a high-quality local product at an accessible price point to broaden our addressable consumer base.”
Celebramos el mes del agricultor con #NuestraSiembra, la cosecha de un nuevo Ecuador.
— Nuestra Siembra Cuenta Oficial (@NuestraSiembra) October 23, 2020
https://t.co/q2a0yA2WEQpic.twitter.com/Xh9eO78MxI
The project currently covers 6,000 hecatares of land and 200,000 tonnes of maize rice and barley.
Other innovations in Ecuador include the 2015 launch of Club Cacao (beer with Ecuadorian cocoa); the launch of non-alcoholic beer Pilsener Cero the same year, and the 2016 launch of Pony Malta Plus (malt beverage enriched with vitamins and minerals).
AB InBev's innovation strategy
Superiority: Providing superior products to consumers in the categories and attributes they're most focused on.
Sustainability: Aligning the portfolio with long-term trends "so that we go where our consumers are going and maximize our return on investment," says AB InBev. "Our goal is to ensure our innovations generate year-over-year consistent growth and that we are de-risking uncertainty prior to launch."
Scalability: Addressing big consumer pain points with solutions that work globally to take advantage of the company's diverse geographic footprint. "We determine minimum thresholds to ensure we're working on impactful projects and we're disciplined about stopping projects that do not meet performance metrics after their first year."
Incrementality: Engage with consumers to ensure the portfolio addresses 'the most structural and unstoppable trends'. "In addition, we leverage our category expansion framework to broaden and differentiate our portfolio, aiming to find opportunities to fill the right white spaces."
