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Working for the world’s largest brewer is not to everybody’s taste — and that is fine with Carlos Brito, Anheuser-Busch InBev’s chief executive.

After Anheuser-Busch, owner of Budweiser, agreed to be taken over by InBev in 2008, Mr Brito and his InBev colleagues arrived at the US group’s St Louis headquarters within 24 hours to start shaking up its comfortable way of working and to assess which senior people would fit in. “In any company, there’s 20 per cent that lead, 70 per cent that follow and 10 per cent that do nothing,” Mr Brito recalls. “So the 10 per cent, of course, you need to get rid of . . . They’re always unhappy anyway and complaining.”

The 55-year-old Brazilian — who likes to be called just “Brito”, never “Mr Brito”, let alone “Carlos” — leads AB InBev by example. “My life is the company and my family,” he says in an interview. He professes to have no hobbies and the sole pastime to which he admits is a daily 30-minute treadmill workout.

The CEO’s dedication to the company is typical of AB InBev managers, who, when they have time to dream, are encouraged to “dream big” — just like the three Brazilian investors who helped create the company that in just over 25 years has grown into a world leader, through bold acquisitions and relentless cost control.

Just how big AB InBev is dreaming is a question to which many would love to know the answer. Recent speculation has suggested that the company, which already has a market capitalisation of €172bn, could be marching towards one more enormous deal. The M&A chatter suggests the group could be involved in a takeover of the world number two brewer SABMiller (market capitalisation £54bn), the sector-leading distiller Diageo (£47bn) — or even Coca-Cola ($174bn) or PepsiCo ($138bn).

To gauge AB InBev’s ambition and management approach for a two-part series of articles, the Financial Times interviewed current and former executives, staff, analysts and consultants in the US, Brazil and Europe.

They depicted a tightly run, ferociously determined multinational that believes it can still move like an agile insurgent despite being the biggest incumbent in many markets. Critics allege, however, that its steely culture is hard on a workforce increasingly managed by young graduates, whose devotion and enthusiasm are matched only by their lack of operational experience.

Do not press snooze

For a flavour of what it is like working for AB InBev, register online to join its elite global management training programme. A short game tests whether you have what it takes, as you play the role of an up-and-coming trainee preparing a presentation. One clue: when your alarm goes off at 6am and the game offers you the option of a few minutes’ lie-in, do not press “snooze”.

In 2014, nearly 100,000 applied for 147 graduate jobs. The admission hurdles get progressively higher with up to seven interviews and exercises, including a final stage in which candidates might be asked to judge which of their interviewers they would select. Each trainee starts with the same ambition. In the words of Ties Soeters, a graduate of the scheme who has worked for AB InBev for eight years: “Everyone has a belief they could be Brito.”

Mr Brito himself had to hustle to become “Brito”. As a young executive at Shell in Brazil, he successfully asked Jorge Paulo Lemann, a financier and former Brazilian tennis champion, for funds to pursue an MBA at Stanford.

Not long afterwards, in 1989, Mr Lemann and his partners — Marcel Telles and Carlos Alberto Sicupira — led the purchase of Brahma, a local brewer. Mr Brito ended up working for them, playing a pivotal role in Brahma’s audacious deal-led expansion.

First it morphed into a regional powerhouse, Ambev. Then, in 2004, it joined forces with Belgium’s Interbrew, maker of Stella Artois and Beck’s, to create InBev, a merger topped by the $52bn Anheuser-Busch deal four years later.

The Brazilian billionaires have put their native country on the investor map. Richard Dobbs of McKinsey Global Institute cites “Brazilians running one of the best US companies better than the Americans” as an example of emerging markets’ growing power.

AB InBev sees itself as a meritocracy. Luiz Fernando Edmond was on its first management trainee programme in Brazil in 1990 and is now head of sales. “I came here with nothing,” he says. “If you work hard, you focus on your results and you work with people, bring people together, promote people better than you, you have a chance to become a CEO of the company.”

A second clear principle is that every employee should behave like an owner-entrepreneur, committed to building the company and not, in Mr Brito’s words, to “building their résumés”.

This translates into a fierce attention to costs. AB InBev executives stay in the same mid-market hotels as team members and travel in the same class of airline seat — economy for short-haul, business class for some longer-haul flights. “We don’t torture our people,” jokes Mr Brito.

Zero-based budgeting — in which planned expenditure is reset to zero each year — is one element of control. Meanwhile, benchmarking and other efficiency and quality programmes are inspired by Japanese lean manufacturing, which revolutionised Brahma after it was introduced in the 1990s by Vic­ente Falconi, a Brazilian management consultant who still advises the group.

Mr Falconi laughs as he recalls meeting German brewmasters who behaved as though brewing was a magical thing: “Beer isn’t magic; beer is process.”

Other elements of the culture are informality and transparency. For his FT interview, Mr Brito is preppily dressed in pressed jeans and blue shirt with an embroidered red Budweiser logo. Staff are encouraged to quiz their leaders, who sit at central desks in open-plan offices. Younger staff liken it to the way start-up employees have access to their company’s founder-entrepreneur.

Do not confuse transparency with equality, however. Considerable rewards, in cash and equity, are available to those who hit tough targets at company, unit and individual level. Miss them and bonuses vanish. “In our company we say that fairness is to treat different people differently,” explains Mr Brito. He earned €2.2m last year in salary and bonus, but also received an exceptional options grant in 2008, set to be worth more than €250m at current share prices, for integrating Anheuser-Busch and cutting deal-related debt.

Performance is constantly monitored, and reviewed formally once a year, using 360-degree feedback. Underperforming staff are given six to nine months to improve. Mr Brito denies AB InBev operates a forced ranking system. Yet, he says, at some point you must say to laggards: “Look, you’re a very smart guy, there are other companies out there but for us it’s not working. You live only once, don’t waste your time here, go somewhere else while you are young.”

‘Too rich to care, too old to work’

In 2008, after the InBev team had done its triage of the Anheuser-Busch management, Mr Brito says he“changed the whole first tier . . . Some were too rich to care, some were too old to work, some wouldn’t fit the culture anyway”. One senior former Anheuser-Busch executive recalls, with something like awe, how the company took tough decisions without emotion, based only on the best interests of the business.

Others are more critical. One Belgian union official, speaking on condition of anonymity, complains about “cost-chasing” — including petty approval requirements for reordering printer ink. He alludes to the rapid churn of managers, saying, “bosses are only in place for three years maximum and then they have to go somewhere else. We have a culture that’s not long term — nothing is stable”.

On Glassdoor, a site that allows staff and former staff to rate employers anonymously, its rating is lower than that of three main rivals — SABMiller, Molson Coors and Heineken — in every area except career opportunities and business outlook. Comments, impossible to verify, refer repeatedly to the pressure. “The workload is completely unrealistic but they keep trimming headcount,” said one person described as a “former full-time employee” in March. “Everyone is so stressed out that there is lots of fighting and tension.”

The group’s global HQ in Leuven, 30km east of Brussels, is decorated with poster-size reminders that AB InBev staff “pour themselves into their work”. Even young and ambitious staff admit that maintaining a social life is hard. Adrien Mahieu, who joined five years ago having worked at his family business, says outsiders sometimes say AB InBev trainees have been “brainwashed”: “My brother can’t understand how deeply involved in the company I am, because I sometimes assume more ownership for ABI than for my own shares [in the family company].”

Freddy Delvaux is emeritus professor of brewing at KU Leuven university, and now runs a small craft brewery with his sons, called De Kroon. He too uses the term “brainwashed” to describe AB InBev staff he has encountered as a teacher. At first it seems positive, he says, “but I’m not so sure: they are also instilling a company view and they create an enormous internal competition”. To get promotion at AB InBev, he jokes, first “you have to kill three others”.

The company encourages a sense of discomfort. Mr Brito says: “We believe that people only grow when [they’re] from time to time sat outside of [their] comfort zone.” When smugness sets in, the group “shakes the tree” to reproduce the rush of having to learn something new quickly. Mr Soeters, who has never worked in one role for more than two years, says: “I never get to that stage of being bored and looking elsewhere.”

Jim Collins, the business author and an ardent admirer of AB InBev’s obsessive culture, wrote in the foreword to Dream Big, Cristiane Correa’s book about Mr Lemann, Mr Telles and Mr Sicupira, that “when fanatics come together with other fanatics, the multiplicative effect is unstoppable”.

Mr Brito offers a parallel with swimmer Michael Phelps’s tireless efforts to become the most decorated Olympic athlete ever. What the analogy leaves out is that Mr Phelps will eventually retire for good. Mr Brito, in his latest letter to shareholders, says AB InBev intends to create investor value “for the next 100 years”.

Click here to read the second and final part of the series, on AB InBev’s growth challenge — and the speculation about one more huge acquisition

Copyright The Financial Times Limited 2017. All rights reserved.
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