Jessica Markowski was made Sales Director for Convenience and Wholesale at Budweiser Brewing Group – a newly-created position –in February 2019. This meant she had time to get the measure of the job before the Covid-19 events of March this year kicked in.
Women in beer – and BAME women in beer – are not so strange these days (Carlsberg UK’s Master Brewer, Bhavya Mandanna, is also Asian background). “Yes, this was typically a man’s world; yes, typically a white man’s world in the UK, but we are making some real progress now in this area,” says Jessica, who is a steering committee member of AB InBev’s D&I panel and the Women in Beer Business resource group.
She has already, on the basis of merit alone, brought together an all-women team. “From a female view, Budweiser Brewing Group is all about meritocracy and finding the best people,” she says, “so I take the best people for the job and it just so happens that the best people for the jobs in my leadership team were female. That’s how that happened.”
Before taking up her new role she has been with parent company Anheuser-Busch InBev for a decade, after a wide-ranging marketing career taking in nearly all the major multiples, including stints at Sainsbury, Asda, Tesco and Waitrose. Jessica first dove into the ocean of alcohol when she did a stint at Bacardi and now finds herself Budweiser Brewing Group’s beer champion and a hero of a large part of the UK for ensuring that supplies got through during the pandemic.
“Lockdown has happened in two parts for Budweiser Brewing Group, the first being the closure of the on-trade – which was a huge deal for us,” she says. Dealing with the consequences of that went hand-in-hand with staying operational under the threat of the virus.
“The safety of our brewery staff was the most important thing when Covid-19 appeared on the scene. But we wanted to make sure we remained operational, and we did, with a lot of safety measures in place.”
Jessica says Budweiser Brewing Group was alert not only to the health threats of the virus but also the harmful effects of remote working. “So we have had weekly meeting calls, and we have tried to keep the teams engaged because that’s important. We did regular quizzes, for example; we had some inspirational talks; we had a high-intensity interval-training Zoom session three times a week by one of our colleagues.
A pandemic of two parts
What Dickens wrote in A Tale of Two Cities – “It was the best of times, it was the worst of times” – could almost be applied to the drinks industry this year. For Budweiser Brewing Group it was been a pandemic of two parts – and if the first was the catastrophic shutdown of the on-trade, as she says, it led directly to the uplifting second: a tidal wave of in-home demand.
“From a sales team’s perspective, with the on-trade being closed and the off-trade seeing a big surge, there was a difference in the volume of beer – going from nothing in the on-trade to a much higher rate in the off-trade.”
It was a big operation for a big operation: AB Inbev has more than 1,000 employees across three breweries in South Wales, Lancashire and London. The list of its brands is long: not just Stella Artois, Budweiser and Corona, Bass, Boddingtons and Camden Hells lager, but also Labatt, Michelob, Beck’s, Hoegaarden, Leffe …
The family of world beers with brands local to their territories is almost too vast to enumerate – about 630 of them all told. Budweiser Brewing Group (it’s AB Inbev’s trading name here) is best known for Bud, Corona – the world’s leading beer, I am told – and of course Stella Artois, all great pub beers as well as corner shop stars.
I ask Jessica exactly what the Convenience channel has meant to Budweiser Brewing Group historically, and how that played out over the summer.
“The Convenience channel has always been very important for us as a business,” she says. “As a category alcohol is the most important in the Convenience area for value sales and beer is number one in alcohol. We like to say that beer is the original social network and it does bring people together. We have seen a huge surge in growth and we have been growing massively within the alcohol sector.”
Jessica believes the lockdown only accelerated moves that were already happening. “The shopper’s behaviour is changing: consumers now shop more regularly, and the location, accessibility and breadth of choice available in convenience stores cater to these needs,” she explained when she took up the sales director role last year.
“When you look at penetration,” she says now, “the number of people who have been going in to buy alcohol in this sector, it’s huge! It’s been important for me. I’ve been in this role for the past year and it’s been an area of growth that the business has been wanting to support because we have seen the consumer trends change in this channel in a way over time.”
Little and often
Jessica says people want to shop little and more often in Convenience, but that changed a bit with Covid-19, “in that the frequency has dropped but actually consumers are choosing much more to go into this sector.”
I say I have quoted her in this issue’s Big Night In feature, where she said that even now the on-trade is less than 50 per cent back to normal. Is this a secular change to drinking more at home?
“Yes,” she answers, “We saw the trend of Convenience growing even before Covid-19. Do I think that people will continue to drink more at home than they used to? Yes, because the brands are available for them to buy; the world has changed quite significantly; but I do think people are also looking for experiences.”
This is where the discussion about Working From Home collides with the one about Drinking From Home: what do we miss out on by not being out on the town with the crowd?
Jessica makes the important point that brands are established through the lived experience with them – you buy a certain beer maybe because you recall having fun nights out drinking it with your friends.
“And the experiences you get with the pubs being back open – only about 45 per cent of them, roughly, but we have seen lots of people wanting to go there and experience a different way of drinking.”
There is a simplex equation going on here: some of the sales are returning to the on-trade, yet this is good for everyone, including Convenience, which has learned to become the new night out-in over the pandemic period.
“We can learn from that,” says Jessica,“and we can bring some of those [on-trade] experiences into the home, whether that’s the dine-in occasion, the draft beer occasion, and I think a lot of trends are building, like direct delivery to homes which I think will grow as a result of Covid-19.”
Her killer point is that is that you become what you become by doing what you do: in other words, novelties become normality in no time.
“Things have changed, habits evolve, and there are stats which show that if you do something like 45 days it becomes a habit, so things will change,” she says – meaning they probably already have. “I guess the trends are quite similar, and that’s why we saw the growth within the Convenience channel replicating in the off-trade what people would drink in the on-trade. I think that really showed when people were looking to have a bit of luxury at home and wanted the brands they trust and that they enjoy.”
So what are the brands store-owners should have most facings of in their chillers?
“Stella Artois is the number-one alcohol brand in the UK from an off-trade perspective and it is still a huge part of our on-trade business as well. And I think it is hugely so in Convenience where Stella Artois has about a 12.6 per cent share of the whole beer category. But our second and third sellers are Budweiser and Corona, all of which are in both sectors.”
Getting by on your own supply
Being able to buy your favourite brands during the lockdown was a struggle in itself. Budweiser Brewing Group managed the supply situation pretty well, keeping Stella Artois and its friends in the chillers while some from other producers almost vanished from the shelves for a while and even now are not fully present.
“To be honest the demand in cans and bottles we saw during Covid-19 was obviously not planned or expected,” Jessica says.“We worked very hard and I am really proud of our supply team who increased their capacity and efficiency.”
Was this the pay-off from the plans she has spoken of to streamline the system of dealing with wholesalers and retailers?
“Going into Covid-19 created lots of other issues that we didn’t know about at the time,” she says. “By making sure that we had a simplified business model that would make it easy to manage was a great thing to do and it became completely cemented during Covid-19. We wanted to make sure we could keep our products in supply while keeping our production open and ensuring continued distribution to wholesalers.”
How did this work out in practice?
“We increased our bigger packs and bulks to support the trends and demand from consumers,” she answers. “But did we have enough supply to support the full demand? No. We have worked really hard with all of our customers to manage their expectations on that.
“I can’t fault at all the supply teams that we have had working throughout and round the clock. Even when materials were a problem for us and other suppliers – it was all about communication with your customers. It also enabled us to focus much more on supply, which was very important. The biggest thing that we could do for our independent retailers was to ensure that we had continuous supply and that was obviously priority number one for my teams and across Budweiser Brewing Group.”
So the levees held through the storm, so to speak, and the product continued to flow where it was directed.
“It was a huge ask of our team to even try to deliver as much as we did. Did we do well? Yes, and in fact in the Convenience market we were able to supply more brands and products as they were needed. So I think simplification is very important, and working with your wholesalers to make sure that retailers can get the products they need when they want them is vital.”
Wholesale evolution
Wholesale is changing. Delivered has exploded over the past few years to the extent that many C-stores are now foregoing cash and carry altogether. At the same time, DTC seems suddenly to be everywhere, engineered rapidly by distributors in a fashion that sometimes looks like trying to by-pass the last-mile convenience of the local shop.
I ask Jessica what wanting to streamline Budweiser Brewing Group’s arrangements and relationships with wholesalers means for the Convenience sector.
“We have always worked very closely with our wholesalers and in the last year I’ve been much more involved in engaging with the retailers through WhatsApp groups, panels and different organisations like the ACS,” she says.
“In terms of streamlining and the way we work with wholesalers, this area is very complex and one of the principles of our business is simplicity. So at the beginning of this year we simplified our promotional structure and our pricing structure with the wholesalers to make it clearer and to spend less time working out pricing.”
What is Budweiser Brewing Group’s thinking on the new model of distribution? After all, there exists in Convenience a massive, already-established last-mile network that could be utilized by an ambitious DTC strategy to pump our local front-door delivery orders from consumers.
“DTC is a trend that we will definitely see and in the digital world we now live in,” Jessica says. “People want to be able to see what they want from their own seats. You mentioned two different models there, one, straight from distribution centres to homes and the second one going via, I guess, the communities.”
Which looks more likely to be adopted?
“That’s something that we actually did during Covid-19 when saw the spike [in home demand]. We worked with Uber Eats around our English Premier League Budweiser sponsorship and offered a service that went through independent retailers. We gave them free delivery, basically, so if you bought a product from Budweiser, but also Stella Artois and Corona, and if you were spending over £10, you would get free delivery.
“We did that on a two-week trial and it worked really well, and this is something we will be looking into for the future.”
I point out that in the lockdown many independent retailers setup their own delivery services for the sick, old and isolated, and sometimes just the plain peckish. It was a thousand micro-networks that could only have developed “from the bottom up” and it worked well because the retailers were trusted figures at the centre of their communities.
“I think it is absolutely imperative that independent retailers look to options to be able to service their community,” agrees Jessica, “because people are going to want home deliveries and it is important to be part of that change.”
So building on this sort of network is something that Budweiser Brewing Group could be involved with?
“I think collaboration is really important,” she says.“What we have as a business is the power of our brand – consumers understand and recognise the power of our brands, so we were able to do a lot of our own advertising to support those retailers. Consumers could go to the last mile delivery through independent retailers.”
Above all, believes Jessica, is the potential for higher and incremental sales to tap into latent, untapped demand. This can be accomplished through delivery to local customers in their homes, enabled by digital tech working with the convenience channel.
“Sometimes store-owners don’t know about the people that they don’t reach,” she explains, “so having these kinds of opportunities of reaching people who may not have come into their stores is fantastic for them for the future.”
Upcoming trends and the future
The Portland Group recently released some figures giving the lie to the fear of a binge-drinking nation under lockdown.
Instead, people have mostly drunk the same, less, or stopped consuming alcohol altogether, and this brings us to the subject of trends, especially for low and no alcohol. Budweiser Brewing Group appears to be one of the leaders with its Becks Blue and Bud Zero brands, not to mention the no-alcohol version of Stella Artois and the low ABV Bud light.
According to Nielsen data,the alcohol-free beer and cider category has grown 147 per cent since 2015. Just how big could this market grow, especially as the taste of the zero brews is now pretty much indistinguishable from the “full-fat” beers?
“Again,” replies Jessica, “this is a trend that I feel has been accelerating through Covid-19. The no and low and I guess the moderation category and those wanting to look after their health and well-being is something we have seen in the mega trends from consumers.”
She confirms not only that the NABLAB (No Alcohol Beer Low Alcohol Beer) category is growing, but that the Convenience channel is outperforming in total off-trade. What might the reason for this be?.
“We have some great products! Our recent campaign on Stella Artois will also include our Zero Stella Artois but also our gluten-free, which is also a trend that we’ve seen growing over recent years.”
I point out that it can sometimes be quite hard to source NABLAB brands in local stores, who often will have a token brand hidden away on a shelf and sometimes not even chilled. Do retailers need educating on sales they are missing out on? Especially given that per litre the alcohol-free beers are considerably more expensive than regular versions of the brands (and no duty to pay either)?
“From my point of view they’re in quite good distribution, it might be one to check, but in terms of how we bring these products to store, I guess there is a consumer need, so it’s important to make sure we have that available,” Jessica answers. “We have seen some recent Meal Deals in some convenience stores, the Co-op being one of those, which included both Bud Light and Budweiser Zero in their deal with pizza.”
Meanwhile, the word of 2021 could well be “seltzer”, a new fad imported from the USA. I wonder how seltzer should be described: as alcoholic fruit juice? Weaponized water? The new alcopop? And will seltzer compete in the RTD market? Is it incremental sales or snatching revenue from beer, or substituting liquor sales? What is happening? I need to know!
Budweiser Brewing Group has just launched Mike’s, their own hard seltzer brad (they call it “alcoholic sparkling water”) of about 5 per cent ABV), in tall slim cans like energy drinks with fruity flavours highlighted.
“All of my wholesale customers are now listing it so it’s widely available,” says Jessica. “Hard seltzer in the UK is now already worth £2.7 million and we have a 17.5 per cent share of that market with just one product.”
“There are four different flavours including black cherry – which is one of my favourites – and it’s driving a huge amount of value sales into the category,” Jessica says. “For me it’s definitely one to watch and make space for as a new category.”
So far the market for hard seltzer is new, she confirms. “For us, with Mike’s, we have seen it as incremental because it’s people who perhaps didn’t like the taste of other products.”
This is perhaps alcohol for people who don’t like alcohol and wouldn’t normally drink. They like their water and juice but this way they can socialise without feeling like a wet blanket.
“Yes, I guess it does give people different options,” Jessica replies. “A long time ago beer would have been your first taste of alcohol, but now we are seeing people entering the category via different products.”
Finally, I ask Jessica about the fallout from the pandemic. Where does she think we, and Budweiser Brewing Group, stand now the dust is beginning to settle.
“I have no crystal ball, but what I can tell you is the trends that we have seen across Europe and this country are toward local shopping. Local is definitely growing,” she confirms.
“I think consumers, especially in the Convenience channel, are looking to meal solutions. They’re not going to go into the supermarket where they used to go, and just run in and out for meals for tonight. Instead, they are looking for the meal occasion within their local store, so what’s really important is to merchandise meal solutions together: a crisp and light drink with some dips and crisps; or Bud and pizza, or Stella Artois with its European heritage with a plate of charcuterie is a fantastic opportunity – and it also supports the basket size for the independent retailer.”
And is back to normal the new normal yet, or do we still have some way to go?
“Well,” Jessica concludes, “in terms of our business, have we seen all of our sales come back from loss? No we haven’t. We have still seen growth but we have been very much impacted by the losses from the on-trade being closed, and I think the on-trade is still really important for building brands, in a place where consumers really experience the products.”
