Norman Adami

Norman Adami on SAB’s ‘bigness trap’ challenge

SA Breweries is big, very big. And that’s why it’s an easy target for those who loathe big business and all it represents, true or not. In this self-penned column in the Financial Mail, Norman Adami, chairman and MD of SAB, outlines how the brewing giant is working to retain the personal connection with its consumers; the importance it puts on exerting a strong, conscious emphasis on applying the human touch.

He writes….

In the past few years, we at SA Breweries have faced our biggest competitive fight in this country in several decades. This new competitive dynamic has been highly motivating to us and we have focused intensely on lifting our game in every dimension of our business. One of the keys for us winning in this new competitive environment will be our ability to avoid falling into what we call the “bigness trap ”.

After all, within the context of SA, we are indeed very big, accounting for more than 3 percent of the country’s total gross domestic product. That kind of size has significant benefits but can also carry some hidden dangers .

On the plus side, it has enabled us to capitalise on remarkable economies of scale over the years, and our strategy of raising prices at a slower rate than inflation has cut the real price of beer in half over the past four decades. We’ve also been able to invest in the best equipment, processes and people, and to source top-quality ingredients, often at a better price than smaller purchasers could negotiate.

As a result, we are able to brew and distribute beers that can compete very favourably with the best beers around the world in terms of their quality and distinctiveness, all at great value to the SA beer drinker.

Those benefits have been essential to our success. But we know that the larger and more sophisticated our practices become, the more difficult it will be to ensure we bring a human touch to our business.

That’s a danger every big company should fear, but it’s particularly relevant for us.

Why so? Because beer is highly personal. And consequently the beer business itself is highly personal.

In fact, I know of no other industry where the personal passion of the people is so critical to success. I myself have never wanted to have a beer with a nameless, faceless, generic institution or a bland bureaucracy. And I don’t expect anybody else does either.

In taverns all around the world, people call for beers that have genuine, distinctive, likable personalities. And as far as we know, no- one has ever walked into a tavern anywhere on the planet and called for a beer because it was efficient, adhered to the latest management fad, or had been “manufactured” with the cold productivity of a barrel of crude or a chip of silicon.

And so we’ve focused a great deal recently on the importance of the personal touch in everything we do, from brewing our beers to serving retailers.

We know that once a company grows to a certain size it must exert a strong, conscious emphasis on applying the human touch. This is because even the best large companies tend to gravitate towards de-personalising things through systems, processes and procedures, and the worst ones can become soulless bureaucracies obsessed with petty internal politics.

Now, obviously, we know we must become better and better at what we do, and we will always embrace increased sophistication that makes us better. But we also know that we must avoid the bigness trap by balancing sophistication with the human spirit.

Our people are highly motivated to strike that balance. For us at SA Breweries, SA is not merely an attractive market in our global portfolio. SA is home. It is sacred ground, and it is where we come from. And if you have a couple beers with us, it will quickly become clear to you that it is who we are.

We know the new “beer wars” will be won by the competitor that brings the greatest value to consumers, retailers and society.

And we are becoming clearer that nothing enhances value like the human touch.

Source: Financial Mail