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- ABI CEO: First global executive to visit Chinese Commerce Minister this year - AB InBev invests for a healthier future in China
Michel Doukeris, CEO of AB InBev, visits China as Budweiser invests in the growth of the beer industry with three leading 'accelerators'
BEIJING, March 2, 2023 /PRNewswire/ -- Michel Doukeris, CEO of Fortune 500 "AB InBev", flew to Beijing on February 24, 2023 to visit China's Minister of Commerce, Wang Wentao, as an anticipated visitor to meet with China's central government after the lifting of pandemic restrictions in China. AB InBev is the parent company of Budweiser APAC and is a public company headquartered in Leuven, Belgium, listed on Euronext, with more than 600 years of brewing tradition and a broad global presence.
This year marks the beginning of China's modernization. The last two months have shown good economic growth, which is promising for both consumption and investment in China. "China is the largest brewing industry in the world. China is such an important market, one of the main ones for us on a global scale. It was natural for me to come this year, see how things are and have the opportunity to speak with the team. And I'm very happy to see how consumption is coming back very quickly," Doukeris said. During his interview with Chinese media, Doukeris shared AB InBev's strategic plans in China. This included progress towards AB InBev's carbon neutrality, sustainability and ESG goals, as well as ways the brewing industry can drive local consumption and economic revitalization.
Investments in China for long-term growth
Doukeris stressed the importance of China to AB InBev, noting that "one in four beers in the world is consumed in China." Since entering China in 1984, AB InBev has put down significant roots in the country and has invested more than RMB 30 billion (including direct investment and acquisitions). AB InBev brews beer at some 30 factories across China and offers a diversified portfolio of more than 50 brands. AB InBev has also spared no effort to meet its commitments to the Chinese market, while continuously increasing its investments in this country.
In recent years, China has firmly and continuously applied its "dual circulation" model, in which the domestic market is the core with foreign investment to accelerate growth and expansion. This is in line with the country's commitment to high-quality economic opening up after the 20th National Congress of the Communist Party of China. The growth of the middle income population, which exceeds 400 million people, and the current trends of "trading up" and "premiumization" are good news for AB InBev, which adopted "premiumization" at a very early stage.
"We have been in China since 1984. Every time the market grows, when there is consumption, we need to keep up with the investment to grow," Doukeris said. Budweiser APAC listing on the Hong Kong Stock Exchange in 2019 has increased investment in China. For example, the Putian Craft Brewery, Budweiser China's largest craft brewery, began operations in July 2022, producing world-renowned craft beers such as Goose Island and Boxing Cat. It is also the foundation of its inspired craft beer brand. local "059 Coastline Craft", which combines local Fujian ingredients such as Wuyi Mountain Da Hong Pao tea and FJ passion fruit.
AB InBev's development in China also accelerated last October, as the brewing industry became part of an encouraged catalog in the West and Northeast. AB InBev was quick to invest to expand the brewery for the production of its three premium brands at its plant in Ziyang, Sichuan province by an additional 42,000 tons.
Expansion of consumption in order to accelerate market growth
The 2022 China Central Economic Work Conference stated that relevant local government departments should give priority to recovery and expansion of consumption. China's Ministry of Commerce also defined 2023 as the year of consumption expansion with promotions across the country to boost consumption and revitalize the market.
Shortly after arriving in Beijing, Doukeris and his team visited the market to see first-hand the recovery in consumption in local restaurants and pubs. Doukeris explained: "With the rise of the 'she economy', healthy eating and other market segments, AB InBev will continue to introduce more diversified and innovative products. We will create more consumption occasions while establishing connections with more consumers."
Beer consumption is occasion-oriented, creates more human interactions and strengthens the connections between us, thus playing an important role in driving global consumption in the market. "The brewing industry is of enormous importance in the global economy," Doukeris said. "According to a new study by Oxford Economics, one in 110 jobs is directly or indirectly related to the brewing industry."
Despite three years of global pandemic, AB InBev, one of the world's 500 largest companies, has shown its resilience and has continued to inject confidence into the industry and the market. Budweiser China plans to launch a public welfare program called "Cheers Campaign" in China at the end of March. The program aims to support small and medium-sized merchants to boost consumption and the development of the night economy with "BEES" from AB InBev. It is a B2B digital platform that helps wholesalers reduce costs and improve efficiency with its technology and professional support.
ESG and the empowerment of industrial chains
The report to the 20th National Congress of the Communist Party of China stressed that high-quality development is the first and foremost task in building a modern socialist country. As an emerging industry with a market size of RMB 400 billion, the beer sector is accelerating its development. Budweiser APAC's goal is to become the "most appreciated high-quality growth leader in the beverage industry" and has placed ESG at the heart of its strategy and operations.
AB InBev stresses that ESG is at the core of its business. Doukeris reiterated that "beer is natural, inclusive and local." As he reiterated, the beer business can only be sustainable with healthy and prosperous communities and healthy and natural ingredients. This is why AB InBev's ESG strategy focuses on eight priorities, including water stewardship, smart agriculture, the circular package and climate action.
Budweiser APAC develops ESG breakthroughs through innovation and cooperation with upstream and downstream market players and stakeholders. Its Nanning brewery sets a new industry benchmark with a water efficiency of 1.11 hl/hl; its Wuhan and Jinzhou factories are the first carbon-neutral breweries; and its Taizhou factory is "Zero Waste". Last June, MSCI classified Budweiser China as an ESG leader with an AA rating. AB InBev is currently incubating innovative ESG solutions through the 100 Accelerator, the Budweiser 100 Innovation Hub and the Supplier Strategic Alliance.
Hand in hand with its trading partners, AB InBev leverages its resources and technology to power the industrial chain and achieve shared prosperity in the communities where it operates. For example, the Wholesaler Excellent Program has already helped nearly 2,000 wholesalers across the country reduce costs and increase efficiencies. Budweiser China has also supported lychee growers in Zhangzhou (Fujian Province) and lime growers in Anyue (Sichuan Province) to explore new models of rural revitalization.
In the new journey of Chinese-style modernization, foreign capital has increased its share in China's high-quality development. By accelerating investment deployment, consumption deployment and ESG, AB InBev has fueled the growth of the brewing industry with "three accelerators" and strengthened its determination and confidence to continue growing in the Chinese market.
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