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Alan Murray: Leadership Next is powered by the folks at Deloitte, who, like me, are super focused on how CEOs can lead in the context of disruption and evolving societal expectations. Welcome to Leadership Next, the podcast about the changing rules of business leadership.
I’m Alan Murray, and I’m tackling today’s interview alone. My co-host, Ellen McGirt, couldn’t be here, but I’m not really alone, because I’m actually in the Fortune podcast studio, which has gotten a lot of use over the last couple of years. And I’m here with our guest, Michel Doukeris, who is the CEO of beverage giant AB InBev. And for anybody who has trouble with brand names, the A B is Anheuser-Busch. AB InBev provides a huge assortment of beer, and now wine, hard seltzer other drinks. We’re going to talk about all of that today. Michel, thank you so much for coming in.
Michel Doukeris: Thanks for having me. A pleasure.
Murray: So this is a first for Leadership Next. The first time we’ve had the same company twice. We had your predecessor, Carlos Brito, here with us in 2020. You’ve been in the job about a year.
Doukeris: Yeah. A year, a year and two months.
Murray: So so how did you get there? Tell us your path. How does one become the CEO of AB InBev.
Doukeris: I don’t think that we can say that there is a path but I can tell you a little bit of how I got there, and my my story, the company. So I’ve been in one way shape and form at the company for 26 years. And in this 26 years, I have done a little bit of everything. But if you think like career-wise half of that was in Latin America, based in in Brazil, but working for other countries in Latin America as well. Half was abroad and abroad I had really three jobs. So I was leading our operations in Asia for seven years from India to South Korea, including China, then a little bit in global as chief sales officer, looking at integration with SABMiller and all the continents, Africa and everything that we were doing after the integration. And before being global CEO I had the pleasure and the privilege to be the CEO for Anheuser-Busch in the U.S. for 40 years. And now one year plus in the job globally with ABI.
Murray: Yeah. And so you your description of your career path makes it clear. We’re talking about a truly global company here. You have over 50 billion in revenue, but you operate in a very local basis. Right. You put a lot of power in the hands of the local operating units.
Doukeris: Yeah, that’s a little bit of what is fascinating in our job in the in our business. One that we are truly a global company and when you think about that in numbers is true, but also the fact that we have operations, physical operations in more than 50 countries. And you can find our brands in 200 countries plus. So we have logistics, assets, breweries, people in more than 50 countries that we operate and in all continents.
Murray: So you tend to make your products close to the market in most cases?
Doukeris: And that’s the second fascinating thing, which is beer, it’s very inclusive, it’s very natural and most of always local, right? So we have global operations. We have design center globally. We have technology globally. But when you think farmers to brewing to distribution centers to customers, this is all local. Yeah, local means we are deep in Latin America, in Africa, in Asia, in each and every state in the United States.
Murray: So different than if you think of like a Coca-Cola or Pepsi. I mean, you you have I don’t know what you’ve had over 500 brands, right? Are there that many different tastes? That many different ways of making beer?
Doukeris: There are many different ways, and many different tastes. But I think that what is interesting there is that brands are very local, right? And you love your Bud Light in the U.S. as much as you love your Stella Artois in Belgium, and I do think that what we really try to do and maybe the most amazing number, when you think about the number of brands and countries is really the fact that we have 6 million customers globally that we visit, and do business with every week and more than 2 billion consumers that on a monthly basis, they interact with one of our brands globally.
Murray: Yeah, that’s really stunning. And I would think one of the implications of operating locally like that, you know, a lot of companies when they went global, they lost any connection with the communities they operated in because they were taking a little bit from here and a little bit from there. But I know AB InBev has tried very hard to maintain close connections with its key communities. How do you do that when you’re in so many different communities?
Doukeris: Yeah, think about that. Everything for us starts with our culture and our purpose. And if you think about our purpose, our purpose is to create a future of more cheers. We say that we dream big to create a future with more cheers. And the more cheers is more cheers to all and cheers is this incredible word that’s very close to beer into our category. But it’s also understood by everybody everywhere. And people understand that this means more than only cheers when you’re drinking is cheers of support, prosperity, inclusivity. And in our culture, we say one of our principles is we thrive when our communities thrive, especially because beer is local. Think about that place, no water. We cannot produce beer, no barley being farmed. We cannot produce beer. And we only have a really good businesses when our customers are growing, when our communities are thriving. And that’s why entrepreneurship, making sure that these customers 6 million customers that we have globally, most of them is small to medium enterprise, that they can compete, that they have access to technology, to great products, good education so they can be financially empowered, and they become the hub where this community they meet, develop, make businesses and grow.
Murray: Yeah, it’s a fascinating business model. But on the one hand, you have this massive scale, you’re probably twice the size of your next biggest competitor. But at the same time you have to maintain a close tie to the community and maybe that helps explain the circle on your lapel. This is a podcast so other people can’t see it. But describe what you’re wearing on your on your coat.
Doukeris: This is the pin from the United Nations with each color is one of the development objectives of the United Nations. We work very closely with them. We have our own goals, what we call sustainability goals, but we are there learning to communicate with people trying to really understand what is the role that we play in society and how can we make our business in a way that follows what our culture says which is thriving together with our community.
Murray: So so a little more on why you do this. I mean, Milton Friedman said the social responsibility of business is to make a profit. Whyy the focus on UN ESG goals SDG goals, why is that so important to AB InBev.
Doukeris: We understand today that you cannot be insulated. Of course, profit is one of the goals of the company, and that’s why companies exist—to deploy capital and to be able to compensate the shareholders having returns on the capital that you deploy. But our role goes far beyond that. And we know that we look at this Oxford the study, where one out of 104 jobs, that you see economies, they come from the beer chain, and the beer supply chain that includes the farmers, the brewers itself, the retail. When you go to developing countries, these numbers can be one in 60 jobs. And we know very well what is the role that we have as we make our business a successful one, as we pay taxes that are then deployed to develop those economies as we generate employment, as we have partners in our business that depend on our business to be successful.
Murray: One of the things you do as a company I understand is tie executive compensation to ESG goals, which indicates a higher level of seriousness about that.
Doukeris: Yeah, so people talk a lot about the ESG. We as a company have been doing this for many years. And we do this first because it’s good for the business. Every time that you can be more efficient you are doing something that is good to your business. And if we are proud about our size, what we said before, we are even more excited about how efficient we are. And this is one angle to look at how we manage our business. We have very low water consumption to produce beer versus any other company. We are best in class in energy consumption. We upcycle the barley that we use in and we do this for more than 20 years. That’s why we have goals because it’s good to the business.
Murray: It’s good for the business and it’s good for the world.
Doukeris: Yes. And then the same time as you do that then you find ways to be more efficient, to be an example for other companies in society to follow. And we approach this very complex world of ESG with three principles. We think that we need to have first, this as part of our strategy is not separate ESG is embedded in everything that we do. Sustainability is embedded in the way that we manage the company. Then we have a clear, simple but strong governance, from the board, to the management, to the implementation in each and every country of what the goals are. And then of course because we are all people and we move accordingly to the incentives that we receive we have executives in the company with targets and goals to achieve so we can make the governance and the strategy work.
Murray: And what happens when the financial goals conflict with the ESG goals?
Doukeris: Our goals they sometimes conflict with independent goals and that’s why what leads this conversation is strategy and governance because the goals being financial goals, commercial goals, ESG goals, they need to be aligned it for us to deliver on the purpose and overall goals of the company. Right and there is no conflict. This is what people don’t see. So when we invest for renewable energy, we are actually making our financial goals better. When we invest to save water, or to protect watersheds, we are making our operations more efficient and more sustainable. Because if you don’t have water, you don’t have beer. So you need to use very well the water of today but you need to produce the water sources of tomorrow.
Murray: So you spend a lot of time in the United States. You have some familiarity with our political system. What do you think when you hear the governor of Florida or the governor of Texas basically say that ESG is a dirty word and people embracing it are like you are woke CEOs? I mean, are you a woke CEO?
Doukeris: I don’t think so, but is to be judged. I think that the in regards to the U.S. is like an amazing country. I’m always amazed by the quality of people, the strength of the institutions, and how the debate political, business wise is a very healthy one. And of course, in things that are new, and things that you have polarizing opinions, the only way for you to build common ground is by having a healthy debate. So I think that all opinions they count and all opinions will help to build what we need to build for the future. While we can’t deny the role that we all have, so but you’re not going to be leading in the ESG front and we are doing what we believe that’s the right thing to do.
Murray: And you’re not going to back off any of your ESG goals because of the political noise around this in the U.S.?
Doukeris: No because they are good goals to the business. But as I said before, we don’t do this because it’s fancy, or because people are talking about this now. We do this for more than 20 30 years. And this is part of the business that we have, in support of the company that we are in so we’re not doing anything different.
Murray: I’m here with Joe Ucuzoglu, who is the CEO of Deloitte US and had the good sense to sponsor this podcast. Thanks for being with us and thanks for your support.
Joe Ucuzoglu: Thanks, Alan. Pleasure to be here.
Murray: Joe. We all know that what gets measured gets managed. Folks like your colleagues at Deloitte have spent a century building up metrics to keep track of shareholder return. But how do we measure stakeholder return?
Ucuzoglu: This is still all about measuring attributes that do in fact drive shareholder value. Because over the long term, if you are driving indicators that represent value creation to your stakeholders, that will translate into premium returns to your shareholders. So what this is really about is lengthening our horizons. It’s a combination of quantitative and qualitative metrics. There’s an enormous amount of work to be done, but you’re seeing a real sense of urgency around this.
Murray: I think that’s a really important point, that in the long term over years decades, the interests of shareholders and the interests of the stakeholders converge. But in the short term, they can often go in different directions.
Ucuzoglu: They certainly can. But what you see is leading investors encouraging the companies they invest in to make certain that they are building and leading sustainable enterprises with the objective of maximizing shareholder value over a long time.
Murray: Joe, thanks for being with us.
Ucuzoglu: Alan, it’s a real pleasure.
Murray: So look forward for us. I mean, you’ve been such a successful company, you have become the largest distributor of beer and many other beverages. You’ve had a wild ride through the pandemic, a big shift in consumption away from on-premise consumption to the stores and then back to on-premise consumption again, what does the future look like? As the CEO of AB InBev what are you hoping to achieve over the course of the next two three four years?
Doukeris: So I think that the first point is, beer is an incredible industry and beautiful category, and the more people know about beer, the more they like it. So beer is very big globally. It is growing. It is a profitable category for the players involved with specialty retailers and it is the largest category for retailers. So they really need beer to thrive. So one thing that we are working very hard on and looking forward that would like to see is that beer continues to grow, continues to thrive as a category and continues to attract consumers by innovating and being the dynamic category we are. The second thing is we are in the midst of a big digital transformation, and others as a company, we are really working very hard to have digital products that complement and accelerate the development of the beer category.
Murray: Tell us what that means. Because digital beer doesn’t sound very tasty to me. Well, how does beer become digital?
Doukeris: So we have products that we are developing today and rolling out across the globe. One is a B2B tool that’s very important. It’s called BEES. That helps us in connecting with this 6 million customers that we have globally. Today we have over 3 million of this customers already empowered digitally, to make their own orders, to understand what we are selling, what they want. But more than that, as we empower them digitally, then we become a vehicle to bring them all their products from other categories that don’t have the same reach as we have, neither the same logistics infrastructure that we have. And if we bring these products to them, then this is small and medium retailer becomes more competitive and can serve better their purpose as a development center for that neighborhood.
Murray: So are you trying to create a platform where other companies can sell products into those businesses?
Doukeris: This platform is already created, is already live in more than 3 million customers globally. Wow. More than 20 countries. And we already have 100 different partners on FMCGs.
Murray: Can you become a sort of an Amazon for for pubs? How big can that business get?
Doukeris: That’s a great question. We had like a few weeks ago, one of our colleagues from the U.K., releasing the list of the top 10 B2B businesses globally, and this was mentioned as one of the top 10.
Murray: Wow, that is your platform.
Doukeris: And people don’t know about it. And BEES today. has more than $33 billion in GMV. So the gross merchandising value of what is sold through the platform is more than $32 billion today. And above $1 billion of this 32 comes from non-beer products. Wine is growing very fast.
Murray: Could it over time become bigger than your beer business?
Doukeris: So we shall look from the point of sales the total addressable market, beer represents 20%, give or take, of what they buy, and 80% are other items. So technically speaking, it grabbed the [crosstalk] market is five times bigger. So it could be.
Murray: Yeah, fascinating. That’s very fascinating. I want to talk a little bit about leadership, because that’s the name of this podcast, Leadership Next. I saw you quoted in in an interview saying that you’ve learned that building a culture where everyone feels empowered to share ideas, drive strong results. But talk a little bit about two things: one, how you do that, and second, how you learn to do that. What does it mean to be a leader of a global company with so many different customers in today’s world? What are the keys to success and where did you learn those skills?
Doukeris: So I think that the why this is so important. Again, the world today is very different, is much more dynamic, and we don’t live in this old times where you had an idea, you have a product, and you just commercialize your product, right? Today, a lot of things that we do, they need to be adapted to just and build together with partners. So collaboration and simple ideas, simple ways of working, is something that became much more important for a global company like ours. And as such, is part of our culture. Our culture is something that’s always evolving. It’s never static. One of our principles today is simplicity and collaboration. And how we learn that that is that over 26 years you make a lot of mistakes, but you’ll have the chances to learn a lot of those. And because I’ve been working most of this time in commercial functions, like from marketing to sales to general manager positions, of course, all the stakeholders that you have are very valuable, and they can bring you a lot of solutions for the problems that you have.
But just think about the same person that’s talking to you here landing in China in 2009. Not speaking the language and having that absolutely massive industry, where we were a very small player and having the opportunity but also the responsibility to build our business there. So there was a lot of things that I could not understand, including the language and the dialects city by city, state by state. And it was a huge exercise. A very humbling one of being able to understand what we’re trying to communicate, navigate the cultural nuances and being able to find common ground to the simple measurable, scalable and impactful that could be applied for that massive country and make your business better, right. I think that again, many mistakes, but all in all, our business grew 10x in seven to eight years, continues to thrive these days. and growing. And I build a lot of these experiences, in Brazil, my family’s from Greece, I have lived everywhere, and I know that each and every place is different.
Murray: So there’s not a common playbook for how you go into a country. There’s a common culture, yes, but not a common playbook. You have to have your ear to the ground and build for the local market.
Michel Doukeris: And if you’re smart enough, you listen more, you speak less. And you’ve tried to make things simple.
Murray: Listening being such an important part of it. When you look at your job today in becoming CEO, what has surprised you in terms of how you spend your time what you have to do to make the company work?
Doukeris: So first and foremost it’s a privilege. It’s a privilege of a lifetime to have the opportunity to lead this company and people and work with the brands that you love. And what surprised me is really how energized the whole team is today. With this new purpose, with our new strategy and how much potential we start to lead and grow the beer industry globally. And in terms of time, of course it’s a very different job. The CEO job is very unique in itself because you really have all the stakeholders, right. So you have your own people, you have your customers, you need to listen to your consumers, but then you have your board and your investors and you need to balance very well your time. So you can be together, with our stakeholders, [inaudible].
Murray: And if you looked at your time, I mean, how much of it is with your employees building culture? How much of it is with your customers building the business? And then how much of it is with other stakeholders, other external stakeholders, you have a clear sense of that?
Doukeris: Yeah, I have like my own rules. And I try to do this very simple. I spend like one-third of my time, let’s say with capital markets and board. It’s a good amount of time., one-third. I spend one-third of my time with my own team, planning, checking the businesses, discussing ideas. And I force myself to have 1/3 of my time pretty close to customers and consumers, because this is where Iget most of the ideas, the pulse of what is really happening the market. So when I interact with my own team, and the other stakeholders, I can have the best information to share with them.
Murray: Makes good sense. Michel Doukeris,t thank you very much for taking the time to be with us on Leadership Next. Big job you have but you clearly are well prepared for it.
Doukeris: Thanks so much for having me here. It’s a pleasure and looking forward for next interactions.
Murray: Leadership Next is edited by Nicole Vergalla, written by me, Alan Murray, along with my amazing colleagues, Ellen McGirt and Megan Arnold. Our theme is by Jason Snell. Executive producers are Mason Cohn and Megan Arnold. Leadership Next is a production of Fortune Media. Leadership Next episodes are produced by Fortune‘s editorial team.
The views and opinions expressed by podcast speakers and guests are solely their own and do not reflect the opinions of Deloitte or its personnel. Nor does Deloitte advocate or endorse any individuals or entities featured on the episodes.