How Anheuser-Busch Is Going Beyond Beer

As President of Beyond Beer at Anheuser-Busch, Fabricio Zonzini oversees a portfolio of new and groundbreaking products that allows A-B to predict consumer trends before they start. With products ranging from “water to whiskey”, Beyond Beer offers consumers exactly what they’re looking for across a range of occasions and trends. I sat down with Zonzini to learn more about how Beyond Beer stays on top of consumer trends and how the business unit is driving growth for Anheuser-Busch.

Dave Knox: What role does Beyond Beer play for Anheuser-Busch? 

Fabricio Zonzini: I’d love to first give you an overview of who we are as Beyond Beer, how we fit within Anheuser-Busch, and how we established the Beyond Beer Business Unit around 2018. It’s not just a fad that we’re trying to jump on now because the category is growing. We’ve been in the space for a while, and it’s a purposeful expansion to fulfill what we hear consumers asking for in the marketplace. At the end of the day it’s all about consumer centricity, looking at consumers first and trying to look at the needs that our portfolio is not delivering, or the needs that consumers didn’t even know they wanted, that we then work to anticipate and provide. There’s a huge world out there outside of beer, and it’s a big part of our company’s strategy to source growth from the Beyond Beer segment. Through Beyond Beer, we are able to leverage a bunch of capabilities already installed in the company, which we combine with this ability and obsession around building a winning portfolio.

It all starts with the strategy. Our strategy at Beyond Beer is building three main pillars. We want to build a winning portfolio, build a replicable model and exploit our capabilities, and lead category growth.  Our portfolio is based around four priorities: 1.) Seltzer, 2.) Wine & Spirits, 3.) Malt-Based Beverages, and 4.) Non-alcoholic and low alcoholic. Beyond Beer ranges all the way from water to whiskey. We have a very broad spectrum across our four priorities.  It’s our obligation to be 10 times more agile than ever before in the capabilities of testing, learning, adapting and being quick to growth.

Knox: How has Beyond Beer structured the innovation portfolio with investments, acquisitions, and your own launches?

Zonzini: At the end of the day there are many ways to build a portfolio. You can build them fully inorganically, or you can look to partnerships – leveraging what you have as a strength versus what other people in the market have. And if innovation is at the core of what we want to do, we believe that there are companies that have similar DNA out there that we can work with to get there. That might be on the M&A side like we did with Cutwater and BABE, or back in the day with Kombrewcha. Or it might be through partnerships with companies where we can develop and bring new solutions to the market. At the end of the day, innovation is really at the core of our strategy, rooted in deep understanding of the trends fueled by consumers.

Knox: In CPG and particularly in beverages, there’s a fine line between trends and fads.  How does your team think about this difference?

Zonzini: If I listened to everybody that told me they had the next billion-dollar solution, I would be out of a job. What we try to focus in on is a combination of what we see as facts, how we understand that those facts became trends, and how some of those trends can be translated into a portfolio gap, and therefore, might need a solution. Some of the ways that we do this is first, through our obsession with consumers. We listen to consumers constantly, both via social listening and our online panel. We talk to nearly 7, 000 consumers on a daily basis. And with AI behind it, –machine learning – I can translate some of those conversations into data to see if proven trends show up. Then, we have the traditional retailer side with syndicated data. We can see if something’s showing up that way as well, if there’s a flag or something that we should be observing. And then there’s something that is gold for us, which is the interaction that we have with our wholesalers. We consider the wholesaler network at Anheuser-Busch to be part of the company; – it is a family. Day in and day out, they are living in the markets. We cannot be in all the markets all of the time, but our network of 600 wholesalers are there every day. So, having a close relationship with them also helps us be first to identify some of these trends, or to confirm some of those that we are seeing from the consumer and retailer listening side.

Knox: Why has seltzer been such a large focus of Beyond Beer? 

Zonzini: The seltzer craze was a direct result of understanding a need and coming up with a solution that consumers didn’t even know they wanted. It follows some of the trends that we see in the market on health and wellness, premiumization and trade up. But it’s not sourcing volume from beer. It is incremental to beer sales and sourcing from other categories. When we had that conversation with our wholesalers a couple years ago, asking “What do we do with this category? Is this going to be a fad or is this going to be a new light beer?”, we prepared for scenario two obviously. The decision to approach it that way was a portfolio decision. As we learned more about the seltzer consumer, we learned that they are an infrequent buyer. It’s more of an incremental category, and thus, they browse more. So, there is an opportunity to offer different solutions within seltzer, which is what we are shooting for with our portfolio. Bon Viv is a more upscale, female-oriented brand, while Social Club is more flavor-forward option with higher alcohol content, targeting more of a male consumer.  Cutwater offers a solution that is pure and real vodka based. Seltzer fulfills a need with a clear bang on proposition. The next step is to create a seltzer for everybody. And this is what we’re about to do.

Knox: How does non-alcoholic fit in with brands like Kombrewcha and Super Coffee?

Zonzini: I always approach strategy in one way, which is a crossroad of the size of the opportunity versus our ability to win, and our ability to win begins with portfolio.  So, the first thing we do is look at our business and separate it. What is interesting to work with? What is something that we most likely will never have any ability to do, and slice that down into pieces. And then second is, how do we start building a portfolio on it? And this is a game that we need to understand, too, as our capabilities are set to sell beer. The world of selling beer in the United States is very unique from a legal perspective, from a wholesaler tier perspective, and from an E-commerce perspective. So, one of the reasons why we are heavier in partnerships, is because partnerships not only build the portfolio, but they bring knowledge and capability. And then, within the areas where we saw growth, they allow us to participate. And there is often projected growth in these categories, such as energy, ready to drink coffee. We are actively seeking these partnerships. We bought Hiball, the first energy seltzer out there, which is doing super well on the West coast. We partnered with GHOST, a lifestyle supplement company, to launch the functional energy drink, starting in GNC this year and expanding next year. And we partnered with Super Coffee in a distribution agreement. So, I think that through all of these partners, we are learning as we build the portfolio.

Knox: How do you see on-premise, off-premise, and ecommerce evolving because of COVID?

Zonzini: Before coming to the U.S. I was in China for seven years. I have this balance of having always worked in strategy, start-ups and turn arounds in my 20 years in the company. This has spanned four different time zones across Latin America, Europe, Asia, and now in North America. One of the things I learned over that time was that with consumer behavior, once it’s there, it’s there.  For e-commerce in the U.S., for example, the channel was not overdeveloped for many reasons. What we saw with COVID was an acceleration of some of those restrictions that might’ve happened anyways. The good thing about it is that we had started preparing much earlier – pre-COVID – so we were already trying to understand how selling alcohol online would work. When COVID hit, what happened was a huge acceleration of that consumer behavior. I don’t think it’s going to go anywhere. What we see in the numbers is a step change, and they held flat after COVID’s initial impact.

I also think that this “in home” trend is here to stay. A lot of the reinvention of entertainment is here to stay. And with that comes a reinvention of how brands talk to consumers, how they’ll interact and how the experiences that our brands will be a part of will have to evolve.  And we have been doing an amazing job with these two areas.   We are learning to bring things to a market, change on-the-go as we listen to consumers, and then connect and tell them stories in a meaningful conversation. This has been a big chunk of our job in marketing overall in the company. But in Beyond Beer, given that we have brands like BABE that were born digital, we can continue to be ahead of the times.