1. Ab INBEV
Fia Consulting
Alex
Nicholas
Rodrigo
Vanessa

2. Agenda Executive Summary Analyses of Market AB Inbev Scenario
Key Issues
Alternatives
Financial
Conclusion

3. Market analysis shows
Alcohol and taxation restrictions increased in the last years
Global Premium weight increasing: From 11% to 15% in the last 5 years
Beer In home consumption trend: From 35% to 40% in the last 10 years
Research shows people are spent more time at their home: Netflix effect
Home delivery: Amazon and grocery store

4. AB Inbev growth history
M&A
Brahma and Skol
Quilmes
Labatt
Interbrew
Budweiser
Modelo
SAB Miller
Business model:
Strong brands – leader in big markets
Price increase
Aggressive cost reduction

5. Current scenario Highly leveraged (100Bi)
Top Line growth below market expectation
Poor EBITDA performance
M&A: Is not an option anymore
Price Stock: Decreased 50% in the last two years

6. Key issue
Maintain AB Inbev as leader of beer industry increasing organic topline to boost stock prices

7. Alternatives to change the current situation
Maintain current strategy: Build a stronger portfolio
Price war: Price reduction to boost volumes
Disrupt your own business model

8. Building a stronger portfolio
Pros
Cons
S&M investment
Product development
Know-how
Scale up
Global brands

9. Price war Pros Cons Margin reduction Economy of scale
Stock price impact
Competitor can follow
Margin reduction
Volumes
Economy of scale

10. Disrupt your own business model
Beer on capsules for in home use sold directly to consumer
Pros
Cons
Lead the industry
Reduce intermediates
Financial impact
Timing

11. Features of the new Business Model
Exclusive machine designed for Home and Commercial segment
Direct Sales – New Commercial Model
No Intermediates
Higher Margin
Higher Value Product from Customer Perception
Fidelity Program
Craft and Local options
Branding Strengthen

12. Features of the new Business Model
From the Operational Perspective
Lower Logistic Cost for Transport and Storage
Higher Shelf Life (Less Discards of Raw Material)
Lower manufacturing costs through higher production rate – Encapsulant machine faster than filling machine
Environment friendly Capsules

13. Risks
Another company can develop a similar model and product faster than us
Probability: Low – Heineken
Impact: High
Patent registrations, faster development, differentiate in commercial models
Market acceptance to the new concept
Probability: Unknown
Impact: High
Target early adopters and premium consumers first, before a full lineup of offers

14. Financial impacts:
Revenue impact: If we maintain the current strategy we will loose 2.2Bi USD due to market share loss per year
Potential market: Additional 15Bi USD per year until 2023
Investments: 2 Bi USD to develop capability and start selling
Margin impact: Potential gains: 600 Mio USD
Cost per liter will reduce
Distribution Expenses
Reduce intermediates such as Wal-Mart

15. Conclusion
Never believe that what you have will remains to you forever
Be faster to be the first, even when you are giant
Disrupt your business before someone does it for you