CNBC Interview with Carlos Brito, CEO of AB InBev
Following are excerpts of a CNBC interview with AB InBev CEO, Carlos Brito and CNBC's Geoff Cutmore and Akiko Fujita.
GC: You've just done your own big deal in Fujian. Can you tell us a bit about the expansion you've been involved in there?
Brito: Two days ago we just did the official opening of our new state of the art brewery it's one of the biggest we have in our system on a global basis. It's a 15 mill brewery state of the art. We had a lot of support from the government to build our brewery and we are happy to have it open. It was built in record time like everything in china and it's a very environmentally sound brewery. As most of our breweries are.
GC: So this represents a significant financial investment in your business here in china and yet as you know there are people who are expressing some concerns about a growth slowdown in this economy going into 2018. That doesn't worry you at all?
Brito: No. China is one of those places that if you look at averages you miss the picture. For example in china, we are in the high end of the market. That's our focus so our brands, activities, experiences that we give to consumers are not on the mainstream side of the market. They are on the premium and super premium side of the market. And those are going very nicely.
GC: So when you think about china and then the broader sale into the rest of the world. how does china sit compared to Europe, Latin America, North America in terms of where you're going to do good volume sales next year?
Brito: It's interesting because we've been doing business in china for 30 years and pretty much from day 1 we decided to invest in the high end of the segment which at that time was not that obvious because it was almost non-existent. But we believe that there's middle class growth in china with more added activity in the economy that consumers have more purchasing power and that they will look for brands and experiences in the high end, premium, super premium side of the market. so today we lead with both those segments like Budweiser, Hoegaarden, Leffe, stellar, corona and those brands come in premium and margins that are very interesting for us. All the investments we've been doing in china is because we continue to invest in the high end segment of the market. That's growing above the average of the market. That's why I said averages can be deceiving.
AF: You talk about the high end of the market. I know AB InBev has been really focused on pushing forward craft beer as well and we've been talking about this growing middle class but younger consumers who have more money in their pocket what kind of growth are we expecting in that sector.
Brito: It's interesting to see that because what we see around the world and china's no different is that younger consumers are looking for experiences more than products. So for example one of the sponsorships we have around the world in terms of sports, music, arts, in general. It's a lot of connecting beer with occasions where consumers value experiences. So for example, tomorrow land that's a edm platform we sponsored, global event, and we do live streaming around the world. In China this year, in June July when this festival happens in Belgium. 74 million consumers watched live on live streaming. World Cup next year, Budweiser is a global sponsor. Every 4 years, next year in Russia. It's going to be again it's going to work around china because the time of the games. Again live streaming is going to be big for us in terms of World Cup. So our brands are very connected to arts, sports, and things that consumers want to experience. So consumers today it's about experience not only about product.
AF: Speaking of changing tastes that's not something we're seeing in china but us as well. You've acquired a lot of craft beer companies there too. The US sales haven't necessarily pushed up and you recently had a change at the top. What do you think you need to do to shake up things in the US.
Brito: Well our business is a global business. US is of course a global market for us but our business especially after the integration. Today we are present in 50 countries around the world. We do business in all continents. Our global brand including Budweiser as our flagship brand. We have 3 global brands, we have Budweiser, Corona and Stella. Again next year very important year for Budweiser. 5th year of the World Cup and that's normally the year where Budweiser does very well around the world so today we have growth of Budweiser in all countries where we have outside of the us.
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