{"id":5330,"date":"2019-03-12T06:00:09","date_gmt":"2019-03-12T11:00:09","guid":{"rendered":"http:\/\/www.beerbusinessunplugged.com\/?p=5330"},"modified":"2019-03-12T07:28:10","modified_gmt":"2019-03-12T12:28:10","slug":"right-now-i-am-having-amnesia-and-deja-vu-at-the-same-time-i-think-i-have-forgotten-this-before","status":"publish","type":"post","link":"https:\/\/www.beerbusinessunplugged.com\/?p=5330","title":{"rendered":"Right now I am having amnesia and deja vu at the same time.. I think I have forgotten this before."},"content":{"rendered":"

\"\"<\/a><\/p>\n

Last week the Wall Street Journal<\/em> reported that the chairman of AB InBev, Olivier Goudet, resigned to allow more focus on his role at JAB Holding Co.\u00a0 This resignation creates a vacancy at the top of the world’s biggest brewer, a brewer with heavy debt load and falling beer volumes, especially in the U.S.<\/p>\n

Goudet had served on the ABI Board of Directors for eight years and as the chairman for the last four.\u00a0 The usual reasons for his resignation were outlined in the press releases including the announcement that Gourdet\u2019s replacement has been identified and will be announced next month.<\/p>\n

A great deal has been written about the problems Kraft Heinz has experienced since their merger in 2015, including the 25% decrease in stock values.\u00a0 Poor cash flow along with a change in accounting rules has resulted in Kraft Heinz altering the first reported operating earnings of $24 billion down to $6 billion.\u00a0 Kraft Heinz has been following a Zero Based Budget (ZBB) program since the merger, a budgeting process which is similar to ABI\u2019s.<\/p>\n

ABI, and now KHC, understand that ZBB can only take a corporation so far.\u00a0 These companies are acknowledging that brand-building, not cost-cutting,\u00a0is the key to long-term viability and ROI.\u00a0 As previously reported on numerous occasions, ABI has lost millions of barrels in sales since InBev bought them in 2008.<\/p>\n

Carlos Brito, the CEO of ABI, has followed the InBev cost-cutting model effectively since acquiring\u00a0SABMiller.\u00a0 One can only cut so much. Sooner or later something has to be sold to ensure the bottom line is being met.<\/p>\n

Brito was not the first to apply these cost-cutting principles to the beer industry.\u00a0 In fact, one might say that Paul Kalmanovitz was the original cost-cutter in the beer industry.\u00a0 Long before Brito showed up, Kalmanovitz viewed the acquisition of breweries and brands as a great cash flow vehicle which could be enhanced by massive slashes in marketing, sales, administration, and other cut-backs.<\/p>\n

Paul acquired Pabst, Schlitz, Falstaff, Lone Star, Pearl, Jax, Old Style, and other outstanding brands.\u00a0\u00a0 He established the companies\u2019 structures with minimal sales and marketing organization and very little field support.\u00a0 Simply put, he squeezed\u00a0out all he could.\u00a0 In Kalmanovitz\u2019s model, the bottom line was the real estate he acquired\u00a0when he bought the breweries. He seemed to view the brands as disposable, but the real estate, however, would continue to increase in value with little to no downside.<\/p>\n

Both Paul and Carlos focused primarily on acquiring breweries that struggled to maintain growth and ROI for their investors.\u00a0 Both have been very successful.\u00a0 Although Carlos’s final evaluation is not yet in and based on the last 10 years, something must give.<\/p>\n

ABI has attempted to market new and exciting products, and while many of those new products may have legs, the current and past cost-cutting models have devastated\u00a0AB’s volume.\u00a0 Next month\u2019s announcement on the new chairman of AB InBev will tell the industry if there are any changes in the future or if ZBB will continue.<\/p>\n

Right now I am having amnesia and deja vu at the same time.\u00a0 I think I have forgotten this before.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Last week the Wall Street Journal reported that the chairman of AB InBev, Olivier Goudet, resigned to allow more focus on his role at JAB Holding Co.\u00a0 This resignation creates a vacancy at the top of the world’s biggest brewer, a brewer with heavy debt load and falling beer volumes, especially in the U.S. Goudet […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_s2mail":"yes","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"jetpack_publicize_message":"","jetpack_is_tweetstorm":false,"jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[1],"tags":[],"jetpack_publicize_connections":[],"aioseo_notices":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p2xRTi-1nY","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/5330"}],"collection":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5330"}],"version-history":[{"count":9,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/5330\/revisions"}],"predecessor-version":[{"id":5340,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=\/wp\/v2\/posts\/5330\/revisions\/5340"}],"wp:attachment":[{"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5330"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5330"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.beerbusinessunplugged.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5330"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}