The 2018 Olin Business magazine shared a series of vignettes featuring alumni faced with a business decision requiring them to weigh data with their values. We featured these stories to support Olin’s strategic pillar focused on equipping leaders to confront challenge and create change, for good. This is one of those vignettes.
A few years ago, a trend in convenience store sales alarmed Valerie Toothman and her team at Anheuser-Busch, where she was then vice president of innovation. A competitor was snatching market share from beer sales and other specialty malt beverages like AB’s Lime-A-Rita.
Phusion Projects gained the ground with Four Loko, a beverage line featuring flavors such as sour apple and fruit punch. The alarming part? The consumer target was entry-level drinkers—21 years old. The alcohol content was high— between 12 and 14 percent. And the containers were big—24 ounces.
“We have very clear principles that drive our company forward. The biggest one that has governed a lot of my role is that ‘the consumer is the boss,’” said Toothman, BSBME ’01, BSAS ’01, MBA ’08. “If we do what’s right for the consumer, we do what’s right for the business.”
The data shouted a message from consumers: “The growth is there. The volume is there,” said Toothman, now executive vice president, brand and beverage marketing, for DrinkWorks.
But alcohol content that high, in containers that large, didn’t jibe with other company principles and values—specifically AB’s commitment to delivering a better, healthier world, where every experience with beer is a positive one and supports a life well lived.
Therefore, AB tested two versions of “Natty Rush,” a new beverage with its own bold flavors, but better aligned with delivering against AB’s principles—one with 8 percent alcohol content and 25-ounce cans, the other with 12 percent alcohol, but at a third of the serving size, 8 ounces. The larger can prevailed— allowing AB to recover market share in a way that felt true to the example AB wants to set forth in the industry.
“We want to serve that customer’s needs,” Toothman said. “However, we’re 100 percent committed to doing it in a way we believe is responsible.”