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Friday, November 16, 2018

Three Pillars for Building a Company that Lasts

November 16, 2018. Shanghai – Jan Craps, AB InBev’s President & CEO for the Asia Pacific Zone, this evening shared his views on how partnerships on multiple fronts – with the government, M&A partners, and employees – can build a sustainable enterprise, one that is built to last. He was the keynote speaker at a CEIBS Executive Forum held at the school’s Shanghai Campus.

AB InBev is the world’s first truly global brewer with a history of more than 100 years, and he drew on examples from the company to support his argument. A company’s first and most important partnership, the CEO said, is with its employees. AB InBev believes that its greatest strength lies in having a team unified by a shared, big dream, but bring their individual ideas to the table. “The best people attract the best people. A people-oriented culture [forms the basis for] our ideal of recruiting, developing, and retaining people,” Craps added. He also explained how the company’s Dream People Culture platform, which epitomises the idea of partnership with employees, works in China. “We began operations in China over 30 years ago. When we first looked into the Chinese market, we saw a strong present and a promising future, and we adopted a long-term approach to engaging with local businesses and local talent, consistent with our Dream People Culture programme. Now, China is one of our top five countries in terms of profitability and volume, with more than 30,000 people hired to explore this market.” Craps now heads the combined APAC Zone headquartered in Shanghai, leading 35,000 employees in growing AB InBev businesses in China, South Korea, Japan, India, South East Asia, and Australia.

As he explained in his speech, the second dimension of partnership is linked to M&As. “Part of our growth over the past 30 years has come from successful business combinations. But it has never been about being the biggest; it’s about being the best,” he said. He also made the point that every merger fits in with AB InBev’s overall growth strategy, enabling the company to bring in the best people and produce the best products for consumers. “Still, the most critical element for successful integration is having a unified vision and culture,” he emphasised. “In any integration we've done in the past, we focus on three kinds of synergies: cost, top-line categories, and working capital. The combination with SAB brought us a fourth kind: intellectual synergy. It brings tremendous value to the combined business beyond category expansion.”

Craps also made the point that a company built to last long must have certain characteristics that set it apart, that make it distinct from the rest. First, it must be a company that consistently delivers superior results, as compared to its peers. Second, and equally important in the long run, it must be a company that has a role in society, a company that would be missed if it disappeared. “Our role in China is to elevate and expand our beer category, which means not only to offer a variety of options to our local consumers, but also to promote responsible drinking,” he said. He told the audience that, for over eleven years, AB InBev has been working in partnership with local government on the initiative of responsible drinking. This is linked to the third pillar: partnership with communities and the government.

Craps then provided examples of several projects that showcase AB InBev’s commitment to being green and sustainable, a recognition that it is a big global brand whose actions and decisions have far-reaching consequences. Launched in 2013, the flagship platform for this effort is the SmartBarley project through which AB InBev benchmarks crop, weather, and market data for 5,000 enrolled farmers and updates them with information that can help improve their productivity and lessen negative environmental impact. “We also work with local NGOs to clean up beaches so as to save the sea waters and build up our brand. Our aim is to ensure 100 islands’ beaches are free of plastics by 2020,” he said. Meanwhile, AB InBev maintains several other partnerships aimed at encouraging consumers to recycle and invest in the infrastructure needed for a truly circular economy. By making the company’s efforts and achievements visible to consumers, Craps explained, AB InBev is well ahead of its competitors in maximising and diversifying the values of a top-notch and lasting brand.

Kate Jiang
Charmaine Clarke