DX in Beer Industry: AB InBev

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.

Figure1: AB InBev, Coca-Cola, Unilever and Colgate-Palmolive say “Collaborating for a better world.”

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.

Figure2: Beer fans can track their beer all the way back to the farm.

SmartHop (Logistics)

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.  

Figure 3: AB InBev has transformed its B-to-B business via the app.

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.”

Sources

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/

Articles:

https://capacity.com/tech-success-3-fantastic-digital-transformation-examples/

https://www.forbes.com/sites/daveknox/2021/03/02/why-anheuser-busch-is-putting-consumer-centricity-at-the-forefront-in-2021/?sh=186fac601cb1

https://benevagroup.com/6-digital-transformation-success-stories/

8 comments

  1. abigailholler1 · ·

    Thanks for your post, Sayo! I agree with your comment on the ‘Tapwiser’ application, it could truly be a game changer for the industry. From AB InBev’s perspective, this app can provide them with lots of data to better understand their sales cycles and anticipate production needs, and better understand which products are best sellers. But for the businesses themselves, this application could also be very impactful for their day to day operations, by allowing them to cut out time spent taking inventory and ordering for re-stock. It could also help businesses to log any issues with delivery, and help to keep track of which products are selling most quickly in their stores. You mentioned in your post that AB InBev uses blockchain to keep track of barley supply, I wonder if this use of blockchain will ever extend to their sales model. While security might be less of an issue here, I think it would be helpful for store owners to better understand sales volume of their local competitors. There is probably a way to solve for this within the Tapwiser app, perhaps by showing the average purchase volume of an AB InBev product of nearby stores.

  2. conoreiremba · ·

    Sayo this is great thanks for sharing. I think the 100+ sustainability Authenticator is a great idea. As we know, Gen Z-ers are really starting to dictate consumption trends in the market, and this is a generation that cares deeply about sustainability. So a sustainable approach has not just become a differentiator for companies, it has almost become a non-negotiable so this collective initiative across brands is really cool.
    My friends in the states can’t get over how popular Heineken is in Europe, but it is probably the most sold beer in bars in Ireland, and marketing has a lot to do with it ,so I agree with you that their brand management expertise really sets them apart. I always think of this advertisement they had from a number of years ago and I still laugh every time.

    I love the idea of using blockchain to track beer ingredients through the supply chain. I think that being able to tell a story with their products is such a huge differentiator for companies going forward in terms of how we now consume products. It matters more when their’s a cool story behind everything we buy. And if anything it will be a conversation starter at parties and bars in future…”Hey Sayo, what barley field is your beer from?”. As you say this is a great example of a company who are using technology to drive their strategic goals, rather than just adopting it for the sake of it. Great post!

  3. Scott Siegler · ·

    This was an awesome post, I didn’t know about most of these developments so it was really cool to read. I definitely appreciate how you broke down these innovations into each particular segment of the business too. The SmartHop technology sounds so cool, and is definitely something that I can see other industries picking up as well. And even while Budweiser sat out the Super Bowl this year, their famous Clydesdales still made an appearance in a pretty funny Samuel Adams ad:

  4. Jie Zhao · ·

    Great post, Sayo! I love the idea of using blockchain technology to be able to see where barley is sourced from and how did it get from the farms to in front of me. I’d love to see other food industries do the same so that we know it is really from the place the company advertised it to be from. The Tapwiser is such a great idea to not only make sure stores are fully stocked but stocked with products that customers most demand. I am actually surprised this wasn’t done earlier, as I’d think we had the technology to support this app for a while. Another idea I’m wondering if AB InBev has considered is a monthly subscription service for individual customers. I feel like this could also be a good way for customers to try new products and flavors before putting them on shelves at a store.

  5. Divya Jha · ·

    Wow, thank you for sharing so many ways that AB-Inbev is using to digitally transform itself, as a beer company. I actually liked Anheuser-Busch’s Super Bowl ad this year! What I remembered about the ad was their tagline – “It’s never about the beer. It’s about being together.”

    I was surprised to know it was their first ever Super Bowl ad, as a parent company. In fact, every year Budweiser’s innovative Super Bowl ads are looked forward to, but this year (like many brands) they announced that they would donate their Super Bowl ad spot budget towards COVID vaccine research instead. But they did end up booking some ad spots for Bud Light, Michelob Ultra and the new Bud Light Seltzer, as you mentioned in your blog post. I remember wondering if Anheuser-Busch did not want to completely lose out the opportunity entirely though, which also made me consider Budweiser’s stance a bit of an eyewash. So it’ll be interesting to see if they can really move away from Super Bowl ads in the future!

  6. Chuyong Liu · ·

    Always eager to learn more about beer company related information and really looking forward for your presentation!!!

    I am impressed with the fact that AB InBev partners with Coca-Cola. Which also remind me of the twitter post from Shane that EY is partnering with Nokia for better digital transformation initiative, which is another great example of collective intelligence that I loved. I would love to know more about how the partnership is really going well then the big companies doing it alone.

    The QR code on the package that allow customers to learn more about the origin of the product is a very good idea that I have thought long ago that Starbucks should have since they already did so much for improving the life of their coffee bean farmer. It is great that AB InBev is doing it!

  7. lourdessanfeliu · ·

    Great and insightful post Sayo! Thank you for walking us through the different ways in which the beer industry has been digitally transformed. Block chain is a great way to track the origin and destination of all materials. It is great it is used to promote awareness of were all the barely is sourced from, but I can see another benefit to this.. in the event of defective material that could potentially cause a recall, the use of block chain would be able to track what lots got produced with the bad material and be taken out of the distribution in a very timely manner.

  8. shaneriley88 · ·

    Sayo, this post was fascinating! It really supported your presentation perfectly. I’ve really enjoyed learning how you feel the beverage industry will and must evolve. To that end, your post meshed up great with your presentation. It has been fascinating to learn about the various aspect of the MBA that you plan to take back to Kirin!

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