The Budweiser-InBev culture clash
The world’s number one brewer AB-InBev on 4 May 2011 posted a sharply higher net profit for the first quarter, but the results were skewed by a 0.4 percent drop in volume to 91.45 million hl compared to the year-earlier quarter.
Price increases and a push to get consumers to trade up to more expensive beer brands helped the maker of beers such as Stella Artois and Budweiser to compensate for sluggish beer sales in the United States, where high unemployment continues to rattle demand.
AB-InBev’s net profit more than doubled to USD 964 million for the three months ended 31 March, from USD 475 million for the same period a year earlier, when high financing costs from the Anheuser-Busch takeover weighed on the bottom line.
Revenue grew 8.1 percent to USD 9 billion from USD 8.33 billion.
The Belgium-based brewer said overall beer volumes were mostly flat, as continued declines in the United States wiped out growing volumes in all other regions.
The U.S. Beer Institute reports that in the first three months of 2011 beer production in the U.S. was down 0.7 percent compared to the same period last year.
Many think that AB-InBev’s first quarter results look great on paper, but that does not mean that there are happy faces all around.
Coincidentally, three days before AB-InBev published its results the Wall Street Journal (WSJ) reported that behind the scenes shaky morale remains a persistent issue. U.S. employees, in particular, seem to struggle to come to terms with their new leaders’ intense focus on cost-cutting and profit margins.
The author of the WSJ article insists that this was not a case of a few disgruntled employees complaining to a reporter but a serious issue.
Perhaps AB-InBev thinks some of its U.S. employees a bunch of moaning whingepots. Alas, it should be aware of the scale of the problem as it conducts annual surveys to determine workers’ “employee engagement” – a measure of how involved and enthusiastic people feel about their jobs.
The company’s North America zone, which accounts for 46 percent of the brewer’s profits, ranked last among its six major regions in the recent results, according to people familiar with the matter. The score was around 50 or 60 out of 100, according to these people. They said one of the highest scores of any country was Russia, at around 83, the WSJ reports.
While the old Anheuser-Busch was not exactly all about caring and sharing, many employees think the new AB-InBev is really a living nightmare.
When approached by the WSJ, AB-InBev declined to answer specific questions about the employee-engagement survey.
At a national meeting of AB-InBev’s U.S. employees in Orlando, Florida, in April, employees reportedly voiced their concerns about the company’s decision to discontinue a certain loan program for workers who relocated for the company. Some employees caught in bad housing markets could be hit hard, because the brewer is calling in the loans issued under the old regime, say people familiar with the matter.
Again, according to the WSJ, the company declined to comment.
So much for transparency at the “dream company” AB-InBev.
