Sabmiller.’s Alan Clark Has Big Plans for Beer

They say that every great bartender is part psychologist. Which, by way of analogy, should make Alan Clark just the person to runSabmiller., the world’s second-largest brewer.

A clinical psychologist by training, Clark was doing corporate consulting on the side when the former South African Breweries asked him, in the dying days of apartheid in 1990, to find ways to help black employees break into management. He met Graham Mackay, then the group’s visionary managing director, and was offered a job as head of training and development. Clark said yes, and the two men never looked back.

Mackay saw foreign expansion as a lifeline for SAB and, starting as MD and later as CEO from 1999, went on an acquisition binge that included the $5.6 billion takeover of Miller Brewing Co., the No. 2 U.S. beer maker, in 2002, and the $10.2 billion purchase of Australia’s Foster’s Group in 2011. Today, SABMiller is the world’s second-largest brewer, behind Anheuser-Busch InBev, with nearly 10 percent of the market and brands that include Miller and Coors Light in the U.S., South Africa’s Castle Lager, Grolsch and Pilsner Urquell in Europe and Foster’s in Asia. It also owns 49 percent of China Resources Snow Breweries, whose Snow brand is the world’s biggest-selling beer.

While the company was growing like gangbusters, Clark climbed the ladder, running Alrode Brewery in South Africa in the ’90s, heading up SABMiller’s European operations in 2003 and becoming COO in 2012. When Mackay was diagnosed with a brain tumor in April 2013, Clark succeeded him as CEO. Mackay died in December.

The go-go days of the Mackay era are over, leaving Clark with the challenge of sustaining growth. SABMiller is a behemoth, not an upstart; beer consumption has flattened in developed countries, and small craft brewers are grabbing market share. The group’s sales slipped 1 percent in the financial year ended March 31, to $34.1 billion, reflecting declines inemerging markets currencies, while net income grew 4 percent to $3.4 billion.

Clark, 56, set the industry abuzz in September by approaching Heineken about a possible takeover, an approach the Dutch company rejected. That move reignited speculation that Carlos Brito, CEO of AB InBev, could seek to take out SABMiller. Such talk is a major reason why SABMiller’s shares have risen 9.4 percent this year, and stand at a multiple of 20 times expected 2015 earnings.

Trevor Stirling, a brewing analyst at Bernstein Research in London, says that rich valuation is probably Clark’s best defense. He estimates it would take AB InBev eight years to recoup its cost of capital on a deal. Still, takeover talk is unlikely to go away. “This is an industry where everybody’s spoken to everybody at some stage,” says Stirling.

In the meantime, Clark has other growth levers to pull. The company gets more than two thirds of sales fromemerging markets, where demographics and rising incomes are pushing up beer consumption. It’s going further upmarket in developed countries by promoting premium brews like Blue Moon and Redd’s Apple Ale in the U.S. And Clark aims to cut annual costs by $500 million by streamlining his supply chain and back-office functions.

The South African executive discussed the outlook for SABMiller recently with International Editor Tom Buerkle in New York.

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Institutional Investor: Why is M&A speculation at such a fever pitch now in the beer industry?

Clark:直到可能两个，三年前，活动更多，一些更大的交易正在做。在最近的过去，实际上，它一直慢。而且我坦率地思考，我们将看到要做的较少较少。考虑到所有权结构，它们可能更复杂。因此，将有持续的整合，SabMiller将发挥作用，但它不太可能像它一样活跃。

Is this the final wave of consolidation, given how concentrated the industry has become?

是的，我这么认为。我们已经有五年左右或那种大规模整合正在进行中。现在有四名主要球员。他们都有非常不同的策略。从我们的角度来看，焦点一直在emerging markets和新兴市场扩张。我们已经完成了成熟的市场交易，但实际上，在美国唯一的两年前唯一真正的大型大型米勒在澳大利亚的几年前也是Carlton＆United and Fost的几年前。我们的重点是新兴市场。对我们来说，这将继续是一个优先事项。我们可以实现的，当我们能够实现的依赖范围内取决于制造商，包括在那里有卖家卖出的人，并且竞争程度的价格达到了价格。

您通过接近Heineken引发了最新的猜测。为什么Heineken？

I prefer not to comment on the specifics of that deal. More generally, there’s this overarching perspective that we would want to look atemerging markets. We’re interested in large markets, high-growth positions and when we can get leadership positions in those markets. Latin America will be very interesting for us over time. Africa will be very interesting for us; Asia, where we’re not, relatively, a big player.

So, it’s geography and then it’s the security of position. And it’s what brand portfolios do they have, because the major market in M&A is still in national markets and national brands.

Graham Mackay talked about beer being a local business, but you don’t have a global brand. Is that a handicap?

我不相信这是一个障碍。这是一个现实，我们知道当我们开始时。在90年代初从南部非洲出现这种扩张的第一个阶段，是人民主导的战略。这是啤酒行业的一个看法，如何更好地运行啤酒资产，这是我们可以进入发展的信念emerging marketsand develop the foundations for the beer culture.

I think the advantage for us is that we have built very strong local portfolios and across the price points. We increasingly are supplementing that with regional brands, so brands like Castel in Africa are spreading throughout Africa; Kozel in Europe is in more than ten countries now; Miller Lite is doing well in Latin America.

你如何进入工艺啤酒空间？

我们发现很难让我们关注它。这是主要酿酒师忽略了很长一段时间的空间。话虽如此，我们有一些较大的工艺品牌。蓝月亮是州最大的工艺品牌之一。Leinenkugel夏天盛大已经迅速增长。

Consumers are fragmenting, they’re expanding their repertoires, they’re looking for more interesting beers, more complex beers. It’s moving away from core lager as the be-all and end-all of our business. We’re moving into this more kind of indulgent space.

You’ve talked about raising your share of the premium market to 20 percent. How are you going to do that?

我们拥有现有的品牌，如蓝月亮和莱尼卡古尔。Redd的Apple Ale，这已经很好地完成了。我们将继续驾驶这些品牌。但当然，它是我们需要介绍的新品牌。A brand like Peroni is something we’re focusing on quite carefully in the U.S. and seeing if we can replicate the success we had in the U.K. Then there would also be an assessment of acquisition opportunities on a brand basis, targeting brands that we think are of high value in selected spaces. So it’s not one strategy.

You’ve been perceived off and on as being a target of Anheuser-Busch InBev. Does that bother you?

It’s something that we are aware of because there’s all the chatter out there. From a business point of view, though, we focus on understanding what we can change, what we can drive, what our strategy should be. Do we believe we have a growth strategy? Can we execute against that strategy? So, we’re much more focused on our business, our customers, our consumers. This is noise out there, if you like. And it’s been around for five years, so frankly it’s just kind of something you get used to. It’s like the weather.

Growth has slowed in many emerging markets. You took a foreign exchange hit last year. Is this a new emerging markets environment?

Emerging markets are always interesting. They’re always changing. The reality is that we have over 70 percent of our business exposed to emerging markets, so 70 percent of our revenue and our volume. That’s a great position to be in because we are exposed to growth. Look at Africa, for example, where the per capita consumption is sitting at the nine or ten [liters a year] level. That’s got decades of growth. Africa’s getting toward about 20 percent contribution to our profit. If you look at that part of your portfolio and say, well, I’ve got more than a decade of growth ahead of me, that’s fantastic.

如果你翻到拉丁美洲，非常相同的人口动态和非常相同的经济动态。人均消费较高。它们在30到40岁之间。但再次，没有理由相信他们不能随时间达到60,70,80级。所以，再次，长期的增长轨迹。在亚洲，我们在中国很大，中国有很长的路要走。来自中国的大量增长。随着时间的推移在中国的利润率大量增长。

你能把雪变成区域或全球品牌吗？

It’s possible. Snow’s not known outside of China. The focus of the management team, correctly, is to build Snow and to get to a scale position. Snow has around 23 percent market share. We’d like to see ourselves move up from that point; that’s the primary focus for that business. We’re now beginning to think about as Snow becomes so widely known, and in particular as you see more Chinese traveling outside of China, is this an opportunity to begin building a global Chinese brand? No firm decisions. To build an international brand takes a long time.

Sabmiller用Graham Mckay鉴定。他亲自聘请了你。从他那里夺回缰绳是多么挑战？

In some respects, it’s not possible to answer that question. Having said that, I did come in as chief operating officer for a year and then it was 18 months ago I was appointed into a CEO role, so I had time to experience what it would be like. And frankly, what I saw was exactly the same experience that I had with Graham all my life working for SABMiller: Someone who made sure you had a shared understanding of where you were trying to get to, lots of challenge, lots of questioning about the decisions that you were making, and then he steps away and allows you to get on with it.

“嗯，”嗯，我想做的事物没有意义，是因为它发生了如此糟糕的事情。“这是一个说法，我如何向前移动这一业务。这种类别策略的概念是非常新的和不同的东西。我们更加重视利用我们的规模，采购扩大，进入供应链，我们正在考虑这一点。对组织的音调和活动非常不同。我相信，即使格雷厄姆已经在这里，那就是继续持续的。当然，他看不到业务的持续增长是悲惨的。

There’s a lot of concern about inequality, has capitalism gone off the rails. Are there wider obligations the company needs to fulfill?

我们渴望成为砂岩顶部tile of our peer group on total shareholder return over a rolling three-year basis. That’s the ultimate measure. But, of course, we recognize that to achieve that, it’s not only about the beer we make and sell and the number of consumers that we can get and how much price we can take. There’s a wide range of stakeholders and employees.

在我认为我们是独一无二的地方，我们往往非常接近我们运作的社区。在新兴市场，我们经常是主要的纳税人。在非洲，我们雇用了大约20,000人的某个地方。可持续发展等问题对我们的业务战略不可或缺。在非洲，我们已经开发了Casaba BEERS，高粱啤酒，建立了与生命的本地供应链。

我对领导团队的观点往往是我们是一家全球公司，而是当我们在哥伦比亚经营时，我们就是哥伦比亚。如果您与捷克共和国的员工交谈，他们将与您的当地业务有关Plzensky Prazdroj的讨论。我认为这是我们能够在世界各地寻找世界的理由之一。我们正在接受文化，我们正在接受多样性。亚慱体育app怎么下载

So, sell to me, not to Carlos Brito?

That’s it.

In five years’ time, what will be the most significant difference people will see in SABMiller’s marketing?

Transformation in the way that we express beer to modern consumers in developed markets. What does it mean? Beer, through the actions of major brewers, has targeted itself at males almost exclusively for a very, very long period of time. Not only has it ignored women, it has often been insulting to women. And I think that’s robbed us of a major opportunity.

That does not mean you will not have beer brands for men. But we need to change beer so that it is not excluding women and not disparaging women. The ability to access a much wider range of occasions — to be more natural, less laddish — is just a very important shift in our business. • •

Follow Tom Buerkle on Twitter at@tombuerkle.