Category winner: AB InBev: Brewing an Innovation Strategy

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This case won the Entrepreneurship category at The Case Centre Awards and Competitions 2019
 
The case

Pedro EarpWho – the protagonist

Pedro Earp, Head of AB InBev’s Disruption Growth Organization.

What?

AB InBev is one of the top five consumer product companies in the world, with annual sales of over $55 billion. The company is the market leader in the beer industry, owning brands such as Stella Artois, Brahma and Corona.

Why?

beerThe beer industry had stagnated in certain markets, with digitalisation overhauling the way large companies organised their marketing and sales efforts. The fast-growing craft beer phenomenon was also disrupting the industry and there was a generalised crisis in consumer packaged goods companies.

Pedro was tasked with leading AB InBev’s independent Disruption Growth Organization unit. The separate entity was designed to challenge the way AB InBev operates, and bring them into the 21st century with innovative projects.

Where?

logoAB InBev has a presence around the world, but the company first started when Brazilian brewery Brahma was bought by a trio of businessman for $50 million in 1989.

Back to the present day, and Pedro led the newly created unit from New York.

When?

Pedro had been leading the Disruption Growth Organization for two years by the time results began to appear in the form of a change of mindset and new initiatives at AB InBev.

Key quote

David Almeida“It’s tough because it means throwing away the stuff you thought was so important to your success and embracing new things, right? If you went back three years ago and said, 'You know, we are going to end the weekly morning meetings and we are going to change the sales rep function,' people would see that as heresy. They would say something like: 'Man, you’re crazy.'" – David Almedia, AB InBev Chief People Officer.

What next?

Pedro could see that after two years his unit was causing a cultural shift throughout AB InBev. But so many questions remained unanswered, including addressing the slowdown of the US market and the unit’s ongoing relationship with the rest of the company.

The authors

authorsRobert E Siegel and Amadeus Orleans

Robert discusses the importance of collaborating with the protagonist and winning the Entrepreneurship category for a second time*.

Complete surprise

Robert said: “Both times the awards came as a complete surprise. With so many great cases written all over the world, it is almost unbelievable to be recognised twice with such a prestigious award.”

Relationship with the protagonist

relationship with the protagonistHe commented: “The case could only be accomplished with the time and collaboration of the AB InBev Leadership Team. They helped us understand what was happening inside of the company, and both the challenges and the opportunities that leadership has had to struggle with in building their innovation group.”

Gaining an understanding

Robert added: “We wanted faculty and students to understand the complexities of these types of innovation challenges, including the strong internal culture of the company and the regulatory constraints faced by the AB InBev Leadership Team, so that’s why we produced both a study questions document and teaching note to accompany the case.

“In addition, we wanted to explore both the risks of cannibalisation of the firm’s core products, and how new skillsets (especially around data collection and management) were needing to be integrated into the organisation.”

benefits of field researchThe benefits of field research

He concluded: “The AB InBev leadership team gave us great feedback and ensured that the data was both accurate and also showed the hard challenges that they confronted. And they also allowed us to share instances where things had not gone well in their endeavours.”

About the authors

Robert E Siegel is a Lecturer in Management at Stanford Graduate School of Business.
e resiegel@stanford.edu
tw @robsiegel

Amadeus Orleans was an MBA student at Stanford Graduate School of Business and is now a case writer at Stanford.
e aorleans@stanford.edu
tw @amadeusorleans

*Robert's first win was with the case Axel Springer in 2014: Strategic Leadership of the Digital Media Transformation

 
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AB InBev: Brewing an Innovation Strategy
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