A-B's Top Marketing Brass to Stay On

Lachky, Ponturo, Others Keep Their Jobs but Likely Will Do Them Differently

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CHICAGO (AdAge.com) -- After winning American institution Anheuser-Busch for $52 billion, InBev CEO Carlos Brito said no executive "in their right mind" would mess with the marketing machine of the beer industry's most prolific spender. And the executives who control the $1.3 billion budget at the country's biggest brewer believe him -- enough, at least, to stay on the payroll after the deal closes.

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Robert Lachky, VP-creative and global industry development at A-B

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Armed with InBev's assurances -- and generous retention bonuses -- A-B's top marketing executives are sticking around under the new regime. Among those who have accepted the bonuses are Dave Peacock, VP-marketing; Robert Lachky, VP-creative and global industry development; Tony Ponturo, VP-global media and sports marketing; and Keith Levy, VP-brand management.

"They've basically communicated to us to keep doing what we're doing, and they've said that they view our marketing as something to put on a high pedestal, not to change," one A-B executive said. "The feeling is that you have a responsibility to give it a try."

That's not to say that some things won't change as InBev makes good on its promise to cut $1.5 billion in costs in the next three years. While A-B's stable of agencies might be comforted by the fact that the executives who hold the keys to their relationships are staying on, they can also expect to get squeezed on costs. A-B is widely anticipated to curtail some of its legendary free-spending ways, such as commissioning a large number of high-budget Super Bowl spots -- some of which never make the game.

In fact, Mr. Brito's contention generally has been met with skepticism from analysts and A-B agency executives familiar with the Belgian-Brazilian brewer's reputation as a financial butcher that grows mostly in developing markets via price cuts and distribution growth.

Benefits of scale
Yet in a conference call with analysts last week, Mr. Brito outlined more than $1 billion in cuts resulting from buying out employees; eliminating newly redundant costs; and cheaper procurement expenses owing to the newly combined company's massive scale. The cuts he described did not touch marketing in any obvious way.

"They didn't buy this thing to wreck it," said Benj Steinman, editor of Beer Marketer's Insights.

The brewer picked up nearly a full share point in June supermarket sales, according to Information Resources Inc. Its total sales to retailers jumped 7.6% during the two weeks around the critical July 4 holiday, according to a memo it sent to wholesalers.

The growth was driven by the successful launch of Bud Light Lime, which, behind a $35 million media budget, picked up as much as 1.4% market share without hurting Bud Light (most of its gains appear to have come at the expense of Corona Extra and non-beer drinks).

In fact, according to Nielsen, 10 of the 25 fastest-growing beer brands in the first six months were marketed by A-B, including both discount brew Busch Light and, perhaps ironically, InBev's pricey Stella Artois, which is marketed by A-B in the U.S.

That sort of growth across so many brands and segments is what A-B CEO August Busch IV envisioned when he vastly expanded A-B's portfolio to include more imports and specialty beers in recent years. The brewer struggled to integrate all the new labels last year. "It's ironic," Mr. Steinman said, "that they get bought just as they're doing so much better."
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