What is happening in the beer industry for digital transformation? This is the question I can’t avoid as I’m going back to my company right after my graduation in May. As you may know, #1 company in the world is Anheuser-Busch InBev (AB InBev) with more than 500 brands including its flagship, Budweiser. #2 is Heineken from the Netherlands, and my company, Kirin, is the 9th largest beer producer. Heineken has always been a benchmark for me as a marketer because of its excellent brand management system whereas I haven’t done so much research about AB InBev. Now that I’m in the U.S. and Kirin has a strategic partnership with them, I choose the American behemoth and try to navigate through the digital transformation of its value chain from production, logistics and sales to marketing as well as its organizational capabilities.
100+ Sustainability Accelerator
Before jumping to the value chain, let me introduce the unique accelerator program where AB InBev partners with Coca-Cola, Unilever and Colgate-Palmolive, encouraging startups to join them for innovative products/services. Although this program is designed to achieve sustainability goals, most of them will require digital technologies, and I think this is a great example of collective intelligence.
From Barley to Bar (Production)
AB InBev has launched a project that leverages blockchain technology to give full transparency and traceability in its supply chain of barley in Europe. While the company works directly with 60% of its farming by supporting with tools to improve productivity and sustainability, this blockchain platform is aimed for the remaining 40% of the indirect farmers. The interactive data in the platform will be expected not only to provide a fully end-to-end view of the supply chain to consumers, but also to advance agricultural development such as improving yields, energy efficiency, and soil health. Beer drinkers will be able to scan a QR code on the package and learn about where the barley in their beer is grown. Isn’t that simply great to see a virtual barley field faraway in France or Germany? At least I love this idea as a beer-fan.
The startup company, which AB InBev invests in for the 100+ Accelerator program, offers “Artificial Freight Dispatcher” that helps the trucking industry make smart decisions to plan and match loads. The tool analyzes and compares thousands of loads in minutes to help carriers plan and book loads that reduce vacant capacities and increase revenue. SmartHop provides AB InBev with the ability to reduce the company-owned fleet of trucks since manufacturers don’t always have full loads for their own trucks, leading to wasted space, wasted revenues, and wasted carbon-producing mileage. Thus, AB InBev can outsource its loads to independent truckers and small-scale fleet operators who look for freight.
Tapwiser: B2B App (Sales)
AB InBev has deployed cutting-edge tech to augment its B-to-B sales processes. In order to serve as a digital shopping portal for bars, restaurants, supermarkets and even small mom-and-pop shops, it has released “Tapwiser,” an app which helps them replenish orders digitally. Further, it can make replenishment suggestions by using algorithms and saves AB InBev’s sales staff the trouble of traveling to stores to gauge inventory levels and log orders. This allows them to spend time discussing new brands and services with store owners. You might think this is just one of the useful apps, but from the way I see it, it could be a game changer for the beer industry since it could eliminate middlemen (wholesalers) as we’ve seen in the other business cases.
Stopping Super Bowl Ad!? (Marketing)
I’m afraid to say this but AB InBev is not so good at marketing, and I haven’t found any prominent recent case in this area…(please let me know if you see its good digital marketing campaigns.) Yet, I’ve found interesting that Budweiser stopped its 37 year-tradition of launching TV ad for Super Bowl. I knew this news and admired its sacrifice for COVID-19 vaccine awareness initiatives at that time. However, it turned out that the company purchased the same amount commercial time as last year, for the brands such as Bud Light, Michelob Ultra and the new Bud Light Seltzer, which represent the growth segments of their brand portfolio. Moreover, AB InBev created a new 90-second Budweiser ad, targeted for playing online via their extensive social media platforms. I could feel their pain to replace their proud traditional brand with modern ones, but AB InBev could take advantage of this abnormal situation to switch and optimize their media portfolio.
Beer Garage (Organizational Capability)
AB InBev has set up Beer Garage, which is the tech innovation Lab located in the heart of Silicon Valley. Techies partner with the business on creating better experiences for consumers and retailers through artificial intelligence, machine learning and IoT, among other technologies.
As we’ve learned through this course, AB InBev is aware of the importance of staying focus on the business purpose. Tassilo Festetics, AB InBev’s vice president of global solutions, says, “The challenge is remaining focused on serving the consumers and retail partners rather than getting wrapped up in the latest and greatest tools. It’s about transforming the business using technology — not adopting technology for the sake of technology.”
Beer Industry: https://blog.bizvibe.com/blog/largest-beer-companies
AB InBev Website: https://www.ab-inbev.com/
AB InBev EU: https://ab-inbev.eu/
Accelerator 100+: https://www.100accelerator.com/