Anheuser-Busch InBev today cut a significant number of jobs in its High End department, dramatically trimming the national sales team dedicated to its stable of craft beer brands.
The company would not attach a hard number to jobs lost, but says the cuts affect 2% of its overall U.S. workforce of more than 18,000 people (which translates to roughly 360 jobs). However, it says the bulk of cuts relate to the High End specifically, which counts about 3,000 employees among its rank. Meaning, the layoffs could represent about a 12% cut to the company’s craft beer division specifically.
Speaking with GBH, a spokesperson with AB InBev says the layoffs represent an effort “to reorganize and simplify, particularly as it relates to our sales structure.”
Such recalibration is necessary, the company says, because it has created unsustainable overlap and a number of duplicated field sales and managerial positions in support of the myriad companies it has acquired over the last few years.
“We have many wholesalers who have one district manager for their core brands and one district manager for the High End,” the spokesperson tells GBH. “And so with today’s changes, we’re going to simplify that structure and go back to what we used to have: One point of contact for the full portfolio of brands. So the wholesalers will have one person who will be their point of contact for both core and the High End, that’s what will lead to some job losses in the High End.”
Similarly, the company is eliminating the High End sales rep position because of “overlap” with its wholesaler sales rep partners. The company says the cuts do not affect its craft brands, such as Goose Island, Wicked Weed, and Elysian, or the sales teams they’ve built. Despite this, the spokesperson maintains that “both pieces of the business continue to have the same level of focus.”
“It’s just the reorganization of how we activate in the market.”
Eliminating job duplication wasn’t the only reason behind the cuts, though. The company says it’s also phasing out “BAM” (brand activation manager) and “TAM” (trade activation manager) roles because, after taking into account feedback from wholesalers, the company has decided they don’t provide adequate return on investment. So-called “BAMs” have, to date, done things like host tastings in bars while “TAMs” do things like build displays in stores.
Furthermore, the company also says it’s readjusting the reporting chain for its regional category management team. And lastly, the company says it’s relocating one of its regional offices—it operates seven across the country—from outside Boston to New Jersey, though not until 2018.
Over the course of the past year, it’s become clear that one of AB InBev’s biggest challenges will be balancing its core brands and its growing collection of High End breweries. In 2016, AB InBev reported depletion decline of 2% overall in the U.S., with Bud Light showing “mid-single digit” declines.
Halfway through this year, it wasn’t much better: “The U.S. Premium segment remains under pressure, as consumers continue to trade-up to high end brands,” the company wrote in its mid-year earnings report. “This is resulting in positive trends for many brands across our portfolio, but is putting pressure on Budweiser and Bud Light, which lost 40 and 90 [basis points] of share in 2Q17, respectively.”
While the High End continues to show growth and promise, it’s now clear something had to give as the company looks to refocus its attention to what made it the behemoth it is. Brands from Goose Island, Golden Road, 10 Barrel and more are on an easy, upward trajectory, so now AB InBev’s heritage brands will need some TLC.
A source close to the layoffs who asked for anonymity tells GBH the cuts were conducted throughout the day, with two HR members calling individual employees one by one.
“These things are not easy,” ABI's spokesperson tells GBH. “We tried really hard to find roles for people affected by this and we’re doing everything we can to manage the process in a thoughtful way.”
Update: After publishing our story, a 10-year craft beer industry veteran who spent two and a half years working for The High End contacted GBH. The former ABI employee agreed to share some perspective on condition of anonymity:
“The direction from HE leadership was the problem [with] the breweries having to go through us instead of directly talking to the wholesalers. We were essentially told non stop about order of importance and this eliminates that hurdle. Now the wholesalers can tell them about the totem pole.
I would assume that the breweries told AB that it wasn't working as the HE tried to align us with the core. The ‘superfluous’ quote from the [Beer Street Journal] article was ridiculous considering the AB district managers were put into an awkward role of funneling pertinent info to the wholesalers regarding each brand.
It's just crazy that they created all of that structure just to destroy it in two and a half years. They just let go of 50+ Cicerones at once.
Their PR guy is already trying to spin the ‘360 people is a small part of the 2,000+ employees in the High End’ angle, but the truth is that the brewery personnel has never been considered a part of the High End by those actually on the AB side. They weren't even included in national calls for reps or district managers. They just cut the well-educated and experienced sales force that was in place to insert new, and cheaper, blood.
Obviously, I never stopped being a craft guy. I was one of the handful of the initial hires in 2015 that was a true craft guy. I used my passion and industry expertise to build my market into something very successful. That redundancy that they reference did not happen with me. I was doing all of the heavy lifting for each brand for my territory so I find the PR comments disingenuous.
They had invested, invested, and invested some more so it completely caught all of us by surprise. It wasn't just underperformers, it was everyone. Like I just told my wife, I can't really hang my head low because I know that I did my job and I did my job well. It is now up to another company or brewery to reap the benefits."
[Editor's note: We'll continue to update this story as we hear back from more sources.]
—Dave Eisenberg and Bryan Roth