If we talk about how the beer industry can better recover from the impact of the epidemic and cope with the uncertainty of the future, the answer of Budweiser, the world’s largest brewer, must include innovation. In the third quarter 2020 performance telephone conference held by the company a few days ago, Carlos Brito, chief executive officer of Budweiser group, specially introduced the innovation principles and methods. “Next, I will elaborate on the principles of our innovation strategy and why it is particularly important for this year’s success in the context of rapidly changing consumer trends.” He said. In the past three years, consumer centric strategies have accelerated the contribution of innovation to revenue, according to Mr. Bo. When browsing the above conference materials, xiaoshidai found that innovation contributed about US $5 billion (about RMB 33.443 billion) of revenue to Budweiser in 2019, accounting for 9.6% of the company’s revenue. In 2017, it was 7.9%.
In addition, it is worth mentioning that Bo ruituo also publicly responded to the rumors of leaving next year for the first time at the meeting. “There have been rumors about my problem all the time, and we don’t comment.” “All I can say is that I will be involved in this kind of conference call with you and our colleagues for many quarters to come,” he said
In fact, in terms of Budweiser’s volume, innovation is not a simple job. After all, the beer giant operates more than 500 beer brands in nearly 50 countries. And it needs to determine the direction of innovation and launch new products in the huge brand portfolio, and finally make consumers in different markets willing to pay for it. “We have been adhering to the innovation strategy to improve the speed and agility of providing quality products to consumers. This capability is particularly important this year as consumers adapt to a rapidly changing environment. ” Bo ruituo said at the meeting.
Carlos Brito, CEO of Budweiser group (photo)
The third is scalability. “Our goal is to solve the common consumption pain points and master the solutions on a global scale, so as to take advantage of the regional diversification of the market.” “We have set the minimum threshold [for innovation] to ensure that the projects we are working on have an impact,” Mr. Bo said at the meeting. And for those projects that fail to meet the requirements in the first year, we will stop according to the regulations
How does Budweiser implement innovation? In this regard, Bo ruituo showed four basic methods at the meeting: consumer centered, category development, seed & learn, and prove & move.
以疫情发生后经常被探讨的健康化趋势为例，薄睿拓便在会上提到，百威的含酒精气泡水新品“Bud Light Seltzer”就是一个成功的创新例子。
“Bud Light Seltzer是一款高端产品，热量只有100卡路里，糖含量不到1克，并且是天然水果风味。”薄睿拓透露称，“我们1月份在美国推出了该产品。对比啤酒品类，其销量增加了40％以上。对比我们的产品组合，其销量则增加了75％以上。”
In fact, this high growth category was introduced into the Chinese market by Budweiser not long ago. In September of this year, Budweiser announced that Mike’s max, its American pre mixed liquor brand, had officially entered China, and released new products including naked bubble liquor. “Mike’s seltzer is the first bubble water with alcohol essence in China, focusing on Zero sugar, low alcohol, zero fat and low calorie.” Speaking about the product at the meeting, Mr. Bo said, “we are beginning to notice the emerging consumer demand and scenarios that are in line with the spirit of liquor. Therefore, we are taking advantage of the global business layout to apply the experience learned in different markets to category expansion.”
When talking about category expansion, Bo ruituo said that Budweiser should use this work to realize the expansion and differentiation of product portfolio and find opportunities to fill in the appropriate market gap. “Consumers want companies to offer a wider range of products, so category expansion can help us identify the occasion and demand and match our current and future portfolios with these factors.” He said.
Bo ruituo (data photo)
It is worth noting that after the outbreak of the epidemic, the beer giant has also significantly accelerated the pace of innovation. This belongs to the “cultivation and learning” mentioned by Bo ruituo. “In the past, it usually took two years. Now, we are promoting a 100 day process from concept to landing in all markets. ” He said that in order to speed up innovation, Budweiser will carry out a small-scale water test in the local market when pushing new products, so as to quickly gain experience and gain greater confidence by understanding the actual performance of new products in the market. “When we decide to scale up the scale of successful innovation, that’s what we call” testing and action. ” Bo ruituo said.
In short, in the view of the leader of the “beer boss”, to win innovation, we should take the initiative, not the passive confrontation. “The first point of innovation is always to be consumer centric. As a result, we strive to provide better insight than others to innovate on the pain points of consumers and customers, rather than looking for solutions to problems. ” He said. Therefore, in the whole innovation process, Bo ruituo said that Budweiser will first try to see whether the problems exist and whether there are good products suitable for the market, which is also the reason why new products need to “test water”. “Then we’re going to eliminate ineffective innovation, invest in things that have potential and are consistent with long-term trends, and try to avoid things that are only popular in one season.” He said. Looking forward to the full year, Mr Bo said: “while we expect better results in the second half of this year than in the first half, the environment remains volatile and uncertain, especially when restrictions are re enforced in some markets.”