Baring all on the InBev new order
The so-called 'Brazilian effect' of severe cost-cutting at InBev has raised a few eyebrows but Richard Evans explains to Rosie Davenport that it is vital to success
Setting off for work in swish company cars parked on their driveways, it was just a normal day for the InBev sales team.
But what did their neighbours think when they saw them return that evening in cheap run-arounds instead? Flat tyre? Demotion? Fair guesses if you didn't know anything about what's been described in the industry as the 'Brazilian effect'.
Just like the painful waxing treatment, the Brazilian effect is all about stripping back, in this case, on costs and it's the reason why many believe the keys to the smart company cars were unexpectedly returned to the garage and swapped for something less flash and more economical.
And the curtains aren't just twitching next door. Fellow brewers are also taking note of the very public signs that say so much about life in Luton since Brazilian giant AmBev merged with Interbrew in 2004.
"They want to be the cheapest producer, the leanest, meanest operator in brewing," says one former employee who claims the approaches of Interbrew and AmBev are poles apart and trying to fuse them resulted in a mighty clash of cultures.
InBev insiders say animosity started to grow as employees began to feel that "the Brazilians were taking over and running the show".
There isn't some kind of Ku Klux Klan of Brazilians Richard Evans
Rumours that these cracks went right through the company, from the top down, were fuelled by some high-profi le departures.
In 2005, at InBev's global headquarters in Leuven, John Brock stepped-down as chief executive offi cer and was replaced with the Brazilian Carlos Brito.
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In the UK, president Colin Pedrick, left just 10 months into the role, after 22 years with the company. He had replaced Steve Cahillane, the American who after two years in the hot seat was promoted to a senior job in Leuven. Cahillane was chosen to lead the operation here when the former chief executive, charismatic Stuart Gilliland left the post in 2003.
Fear of the unknownSix months-ago, president of InBev UK and Ireland Richard Evans - another big-hitter at Interbrew with 12 years' experience under his belt with the brewer - was drafted back in to steady the ship.
He brought with him a new perspective informed by working at the group's global head office in Leuven, Belgium.
In contrast to his peers back in the UK, Evans was exposed to the changing face of Interbrew and given the chance to look at strategies to take Interbrew global even before San Paolo came calling.
He admits that his mindset was very different to those in Interbrew's old guard, and returning with the task of merging them together has been a challenge.
Some employees, he says, have struggled to reconcile the new "thrusting" style of InBev with Interbrew's old ethos as "The World's local brewer", which he describes as "fairly handsoff".
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He adds: "We would acquire companies and let them get on with it. I have 12 years' experience, mostly in the UK, and I stayed so long because I loved the culture and the people. Yet, from my global experience, I could see that things weren't gelling quite as well."
He argues that the gel that's been missing in the UK was the influence of other cultures, not just Brazilian, and vehemently refutes the idea that InBev's new order is driven by AmBev.
"I find this [the reference to the Brazilian effect] offensive and slightly xenophobic. I know a lot of these people, some of them are my friends, and I don't think I would like it if the people in Brazil were talking about us as 'those Brits'.
"There isn't some kind of Ku Klux Klan of Brazilians.
"Part of the problem here is fear of the unknown and that fear is unfounded. There is no question that the company is different, no question at all. Some people clearly think it's worse, I think it's better, but at the end of the day, everyone is entitled to their opinion.
"My experience of the Brazilian operation is that it's just outstanding, there is so much enthusiasm and energy. Part of what Inbev is trying to do is spread that around the company.
"My view is that we are a much healthier and stronger company for being InBev."
My view is that we are a much healthier and stronger company for being InBev. Not everyone feels the same way Richard Evans.
However, he adds candidly: "Not everyone feels the same way, clearly they don't."
The two main reasons insiders give for this divide is the feeling that they are losing their autonomy and the waves of cost-cutting which in Evans' mind are the two main strengths of the new look InBev.
"A culture of discipline is what makes good companies great and I've seen that in Brazil and I want to build that in the UK," he enthuses.
"Discipline doesn't disempower anyone in the choices that they make. One of the things I don't understand when I hear all this Brazilian stuff is that it seems to be a reason to blame someone else for the choices that have had to be made. And what I said to my own team was 'well, where are these guys then? There's no one else in the room'.
"I can't think of one example where someone in head office has told me what to do, but there are certain processes that we have to follow, such as the way we account for stuff. But following the process is not the same as making choices about what you are going to spend your money on. We make those choices."
However Evans does concede that the merger has brought more involvement from HQ - something "you either love or you hate, and I love it".
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Scrutiny on the UK operationEvans argues that the scrutiny now put on the UK operation is a result of Interbrew going global rather than a sign that AmBev is wearing the trousers.
"We are unquestionably in a better place than we were. But what I want to deal with is the question: 'If that's all true, why do some people feel the way they feel?'
"I, and quite a lot of other people, joined Interbrew because at that time I didn't want to join a global company. Being at Proctor and Gamble at the time, I was at a company where that would have to come.
"So what appealed to me was the chance to work with some very big brands but without all that global stuff.
"And I know I was not the only person who was attracted by that.
"But we are a very different company now, and as a global company we are very clear that the leadership team should be a global leadership team.
"Some of our global competitors are one dimensional, we are a melting pot, our head office is made up of all nationalities.
"I love the UK, but you do realise we are quite a small island in a big world and it does not revolve around us. We have some wonderful people and some wonderful ideas, but we don't have a monopoly.
"You have to make a choice, particularly for senior people, to be prepared and embrace the idea of getting some global experience at some point. And the truth is that not everybody wants to do that.
"It's different to what many people signed-up to many years ago. So it's not what everybody wants to be part of and that's what we're working our way through."
Setting up InBev as a new, global company, offered it the chance to redefine itself.
And in "one of the toughest beer markets in the world", where it reported a loss before tax of &poun
