UPDATE: May 6, 2021: Carlos Brito, who built AB InBev into the world's biggest brewer, is stepping down as CEO after 15 years as the helm. He will be replaced on July 1 by Michel Doukeris, president of AB InBev’s North America division.
"Michel is the right leader to take the company into its next phase of organic growth and success," said Martin Barrington, AB InBev board chairman, said in a written statement. "He has a proven track record in innovation, multi-category brand building in beer and adjacencies, consumer insight, and expanding premium brands in both emerging and developed markets."
- AB InBev started looking for a replacement for CEO Carlos Brito, who has significantly grown the world's largest brewer through a series of deals during his 16 years in the role, according to the Financial Times. A company spokesman declined to comment to Food Dive on the potential leadership change.
- The brewer of Bud Light and Michelob Ultra is reportedly considering external candidates as well as Michel Doukeris, who heads its Anheuser-Busch operations. The Financial Times said Brito is working with the AB InBev board on finding a successor and plans to step down at some point next year. Brito is expected to join the company's board after leaving the CEO post.
- AB InBev also could keep Brito as CEO for a longer period of time if it does not find a candidate during its search, the business publication said.
The decision by AB InBev to look for a new CEO comes at a tumultuous time for the company and its competitors in the beer space.
Americans — most notably younger consumers such as millennials and Gen Zers — are increasingly drinking less alcohol or skipping it altogether. When they do, they're more likely to turn to spirits, craft beers or ready-to-drink products like hard seltzer. Beer volumes slipped 2.3% in 2019, its fourth straight year of declines, led by a 3.6% drop in domestic brews, IWSR said.
For AB InBev, keeping Brito on the board and involved with the company in some capacity even after he steps down will allow the beer giant to tap into his knowledge of the industry and the company he played a major part in building.
Early signs point to AB InBev focusing its search for a new CEO on external candidates, who could bring a fresh perspective to a company that could likely benefit from a fresh set of eyes. In the past, AB InBev has largely focused on filling its executive ranks from within. The Financial Times did not say which individuals the company is looking at externally, but it stands to reason that someone with experience working with beverages, food products or other CPG items would be a logical candidate.
If the company did chose to go with Doukeris, who began overseeing AB InBev's Anheuser-Busch division in 2018, it would promote a seasoned executive who has moved aggressively to better position his business to respond to today's consumer trends.
During Doukeris' time running Anheuser-Busch, AB InBev has improved its offerings by purchasing canned wine maker Babe Wine, growing its roster of craft brews, rolling out Bud Light flavored with real orange and lime peels and launching Bud Light Seltzer. It's currently in the process of purchasing the remaining stake it doesn't own in craft beer maker Craft Brew Alliance. Still, these and other changes have not been enough to prevent it from losing ground to other craft players, popular Mexican brews or hard seltzers.
Brito has been CEO for more than 15 years, far exceeding the average tenure for a Fortune 500 chief of five years, according to Harvard Law School.
While at the helm, Brito has overseen a rapid period of deal making that turned the Latin American regional brewer into the largest beer maker in the world. Its biggest deal recently was the 2016 merger between AB InBev and SABMiller, a transaction worth more than $100 billion. While the deal was undoubtedly transformative and further expanded AB InBev's dominance in the global beer industry, it saddled the company with billions of dollars in debt. In the past two years, the company has worked to pay it down by cutting its dividend twice and selling its Australian operations. In addition to overseeing changes to its portfolio, the new CEO will need to continue improving its financial position.
Bernstein Research said in a note the timing of the leadership change makes sense because the ongoing pandemic has forced the company to focus more on improving its internal operations rather than expanding globally through acquisitions, CNBC reported.
Whoever does end up taking over for Brito will have a full list of internal and external challenges to address that could befuddle even the most seasoned beer executive. AB InBev has a diverse global portfolio of iconic brands, including Stella Artois and Budweiser, but how consumers drink these and other alcohols is rapidly changing and the new leader will have to move quickly to respond once they take over.