AB InBev CFO: ‘You’ll be able to’t cover when a pandemic hits’

Fernando Tennenbaum grew to become CFO of Anheuser Busch InBev, the world’s largest brewer, in April 2020, simply because the coronavirus pandemic gripped the nation. At his first earnings name, in Might, the corporate reported “materially worse” enterprise, together with a virtually 6% income decline, however by the autumn, it discovered its footing, with 4% income progress within the third quarter.

However the expertise confirmed to Tennenbaum, who has spent virtually his complete profession on the firm, two key classes. The primary: beer is a really resilient enterprise. The second: profitable enterprise calls for a dedication to environmental, social and governance (ESG) requirements. 

After recovering from its temporary downturn, AB InBev noticed very robust demand throughout its complete portfolio, which incorporates Budweiser, Corona, Modelo and Stella Artois, and that demand has remained constant since, Tennenbaum informed CFO Dive. 

“It’s been a difficult yr and a half, however we’ve carried out numerous issues we could be happy with,” he mentioned. “We have been capable of assist the neighborhood. Within the first one to 2 weeks of the pandemic, we have been capable of produce hand sanitizers to donate. Then we repurposed our transportable coolers to ship vaccines.”

In April, Budweiser — one in every of its flagship merchandise — commenced a marketing campaign providing free beer to individuals who get vaccinated, Advertising Dive reported.

Fast pondering

For AB InBev and its new CFO on the time, the pandemic stress-tested its technique, and magnified each its strengths and weaknesses, Tennenbaum recalled. “Typically you may cover, however you may’t cover when a pandemic hits.”

In the end, AB InBev’s, and notably its finance division’s, fast decision-making course of, gave it an edge when the broader outlook appeared grim. “Our technique made it very clear the path we have been going, so the selections have been virtually apparent,” he mentioned. “And if we will proceed doing that, and finance can help the corporate in doing that, that will probably be key.”

Fernando Tennebaum

Courtesy of AB InBev

 

Tennenbaum’s profession adopted a winding path to main funds on the world’s largest brewery. He entered the brewing market in 2004, as a debt specialist at Ambev, a Brazilian firm. That very same yr, Ambev merged with a Belgian brewmaker, Interbrew, to change into InBev. 

Tennenbaum spent greater than 7 years with the corporate, finally main its investor relations, M&A group, and at last serving as its treasurer, earlier than shifting to St. Louis-based Anheuser Busch as its International Treasurer in 2012.

“Investor relations differs from treasury, since you make fewer choices,” Tennenbaum mentioned. “However the way you clarify the corporate to analysts has a significant influence on its notion and valuation, and also you study so much about the way to arrange your ideas clearly and transparently.

Alternatively, main M&A taught Tennenbaum the deserves of managing frustration. “I used to be making an attempt to place 10 totally different initiatives in place, and 9 of them would fail,” he mentioned. “However that’s not your fault; it’s a part of the training course of. Whenever you get one proper, it’s a way more sturdy answer, since you simply went by means of 9 trial and errors.”

In 2016, InBev merged with Anheuser-Busch to type Anheuser-Busch InBev. And in 2018, Tennenbaum returned to Ambev, now an autonomous subsidiary, as its CFO, earlier than lastly touchdown again at AB InBev as CFO in April 2020.

“No matter your position or experience, you must be sure you’re doing it as a result of it’s the suitable factor for the enterprise,” Tennenbaum mentioned of his time in numerous monetary management positions on the corporations. “The totally different positions we’ve got at AB InBev are virtually like ongoing reinforcements of getting the suitable mindset.

ESG comes first

As CFO, Tennenbaum has been deeply dedicated to environmental and social governance (ESG) points, and has solely change into extra so amid the pandemic. He’s a founding member of the United Nations’ International Compact CFO Process Drive, which, the UN says, was fashioned in 2019 to “encourage a brand new that means” for CFOs’ roles in sustainability, and in an effort to “increase consciousness of the transformative influence of company finance throughout … the worldwide economic system, and society as an entire.”

On the United Nations’ annual Basic Meeting gathering final week, Tennenbaum and his fellow Process Drive members shared a pledge committing to the UN’s Sustainable Growth Targets (SDGs), a broad checklist of ESG-centric targets meant to be achieved by 2030. 

The Process Drive, which incorporates CFOs of 60 corporations price a mixed $1.7 trillion in market capitalization, per Fortune, dedicated to collectively make investments $500 billion over the subsequent 5 years towards reaching the 17 targets the UN has outlined, which embody “no poverty,” “zero starvation,” “gender equality” and “inexpensive and clear vitality.” 

The pledge units “a crucial milestone on a journey which started in December 2019 when a small group of CFOs began working collectively in the direction of a imaginative and prescient of boosting the combination of sustainability inside enterprise operations,” Alberto De Paoli, CFO of Italian utilities company Enel and co-chair of the CFO Taskforce mentioned. “Now, we goal to extend consciousness even additional and assist create the required atmosphere to draw extra capital in the direction of sustainable growth.”

Tennenbaum mentioned he was formally launched to ESG, and AB InBev’s commitments, his first week on the job as CFO.

“Whenever you be a part of AB InBev, we go and go to breweries, and factors of gross sales, and attempt to get a look of the enterprise,” he mentioned. “I bear in mind speaking to a brewmaster who was very proud to report he was lowering the water consumption in comparison with the earlier yr, and had lastly damaged a sure threshold.”

As a part of its multi-pronged checklist of 2025 Sustainability Targets, AB InBev is at the moment aiming to make 100% of its merchandise with renewable vitality, which, whereas nice for its environmental footprint, additionally brings monetary advantages. 

“Each time you will have these enormous fluctuations, we’ll know our vitality is secure, in order that’s one other win,” he mentioned. 

It additionally has dedicated to scale back its carbon dioxide emissions by 25% by 2025, which additionally will make the corporate extra environment friendly, he mentioned; a win-win. And in February, AB InBev introduced a $10.1 billion sustainability-linked revolving credit score facility. 

“The entire debate over finance and ESG, that you just both select one of many different, is a false dilemma. I’ve realized since my first week, they go hand in hand,” he mentioned. “The extra environment friendly you might be, the extra sustainable and extra worthwhile you might be.”

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