Two months ago, beverage giant AB InBev disclosed that its innovation, incubation and investment unit, ZX Ventures Explore Fund had taken a stake in California startup Wave Soda.
That’s one of dozens of investments ZX has made as AB InBev seeks to keep up with ever-changing consumer preferences for both alcoholic and non-alcoholic drinks.
At the recent BevNET Live Summer 2019 conference in Manhattan, ZX Global Director Liz Tomic discussed the unit’s investment strategies and described the types of companies with which the world’s largest brewer wants to partner.
“When we think about categories that we’re interested in, we try to build investment strategies that focus on need states and we kind of stay away from category-specific, ingredient-specific because those feel small and boxed in for us,” she said.-
“We look at categories that are generally big enough and stretchy enough to meet a pretty relevant-sized population’s needs. We’re pretty focused on premium — but accessible. We want the highest quality products but that can live across channels and with a pretty big consumer base.”
Discussing distribution, Tomic noted the importance of convenience for the consumer. “We have to be where consumers are,” she said.
“And what’s exciting is, consumers seem to be discovering products all over: whether it’s grab-and-go in a 7-Eleven, whether it’s traditionally in Whole Foods, whether it’s online. We have to figure out how to be functional, conversational and effective in all of those.”
When it comes to alcoholic beverages, “we’re interested in how convenience and casual is taking over wine and spirits,” she noted. “Seeing lifestyle branding, seeing more sessionability in single serve is exciting.”
She also spoke more about what the company is looking for in investment partners. “We want to partner with folks who know where their consumers are and where the velocity is….," she said.
"A unique angle for us is probably culture fit. So we are trying to partner with folks who are obsessed with the problem, obsessed with testing and learning and building the categories and the brands with us as a partner.”
In fact, when making decisions, " the cultural piece is useful. We have to spend time together, we have to want to work together.
“We’re pretty humble about coming to the table knowing that we’re learning new channels, learning non-alcoholic. And so we aren’t a place to come to say ‘I’m on to something and I just want you guys to scale it up and I’m gone.’ We really want to work with folks who want to build it together.”
What about the size of partner companies? “There’s no such thing as too small. We are fortunate to be able to play kind of across the board,” she noted.
“What’s most important is the people behind the product, the proposition.… So if there’s something super-early stage but there’s a team behind it who seems to know, they’ve got their land markers on how they want to scale efficiently, we’re happy to be there.”
On the ZX approach to testing and replicating:
“When we’re working with an earlier stage company, in one city with one or two SKUs in one channel, you can feel like you’re on to something. But what we really want to test is start to see traction as a replicable model. So can you take what you know in, let’s say natural channels, does it work in convenience? Can you take what you have in LA -- does it work in Tampa?”