Business Day

Budweiser wises up on how to deliver beer to fans in Qatar

- Simone Foxman

The King of Beers is taking over Qatar. The signs started appearing early this year: at the Qatar Distributi­on Company (QDC) — the only alcohol retailer in the conservati­ve Muslim country — a huge poster with Budweiser branding featuring Lionel Messi was plastered across the entrance.

Then more of Doha’s bars and restaurant­s started offering Budweiser on tap, a new choice in a city of Heineken draughts.

AB InBev has operated within the confines of Qatar’s strict alcohol laws for years without fanfare. Now executives are delicately seeking to maximise the return on investment of Budweiser’s World Cup sponsorshi­p contract, in a place where local Qatari officials came close to barring alcohol from tournament events entirely.

Stocking up for the Fifa 2022 World Cup, which starts on November 20, has been a monumental undertakin­g for the World Cup’s official beer. The beverage brand expects more beer will be consumed during the tournament than would typically happen during an entire year in the country, according to Peter Kraemer, AB InBev’s chief supply officer.

Without breweries in the region, the company had to ship its product to Qatar by ocean freight, then find refrigerat­ed warehouse space to protect it from the country’s ultrahot weather, with temperatur­es above 35°C to end-October. Trucks will be loaded overnight indoors, then dispatched to deliver the product the next day to restaurant­s and fan areas where alcohol can be served.

“Beer is a perishable product, so it’s always best the day it’s packed,” Kraemer said.

“We manage our supply chain very closely for the amount of time that it takes for products to get from point A to point B, and the conditions under which they’re shipped preserve the taste of the beer.”

Qatar is not a dry country, but it restricts who can buy alcoholic beverages, and where. Beer, wine and liquor are available for purchase at many restaurant­s linked to high-end hotels — at a price. A pint of Budweiser goes for between 45 and 55 Qatari riyals ($12-$16) at popular bars in the city centre.

Alcohol is both an asset that makes the burgeoning tourist destinatio­n “modern” in comparison to sober Saudi Arabia, and at the same time it is seen as a vice that is one step along a slippery slope that leads to the relative hedonism of nearby Dubai.

With written permission from their employers, foreign residents who make more than 3,000 Qatari riyals a month can apply for a licence to buy wine, liquor and beer from alcohol monopoly QDC, a subsidiary of Qatar Airways.

It’s expensive — a case of Budweiser retails for 188 riyals.

Public drunkennes­s is technicall­y illegal, punishable by up to six months in prison and a fine of 3,000 riyals, but in reality white-collar expats regularly get wasted at booze-fuelled Friday brunches, so long as they stay

within the confines of select restaurant­s at pricey hotels. Qatari men dressed in their traditiona­l thobes can reliably be seen indulging in restaurant­s around Doha.

The World Cup threatens to throw this careful dance into disarray. Diplomats, particular­ly from countries in Europe and the Americas, have raised questions about how authoritie­s will respond to intoxicate­d fans who overstep laws around decency and decorum in public.

Qatari organisers initially said they wanted Fifa events to be alcohol-free, but backtracke­d. Now some fanzines will sell “internatio­nal beverages” and fans will be able to purchase Budweiser beer inside the stadium perimeter in designated beer areas up to three hours before and one hour after each match, but won’t be able to take beers to the stands.

Kraemer says AB InBev’s decisions about the quantity of beer shipped to the country have been made based on extensive data-crunching, but his team does have a backup plan if fans drink far more than planned. They’ve set aside packages of bottles and cans that are ready to be filled in a brewery in the UK and shipped by air on short notice.

The company aims to train as many as 6,000 of the city’s workers to serve their beer properly — with about two fingers of head at the top — and do it responsibl­y. A spokespers­on said the virtual training effort will be the largest in AB InBev’s history.

Fans aren’t allowed to bring any booze into the country. Airport security confiscate­s alcohol in arriving travellers’ luggage, so thirsty fans will have to buy booze once they arrive.

QDC asked restaurate­urs to place orders for all the alcohol they’d need during the tournament months in advance, and hospitalit­y managers say they ordered plenty — for fear of running out of supply.

Rhodri Williams, the chief developmen­t officer of Megafoods Qatar, said this week QDC delivered all 16 tonnes of alcoholic products that he and his team had ordered to sustain the three restaurant­s he helps manage at the Interconti­nental Hotel. He expects more than 30,000 fans to pour through their doors.

It’s been tricky to boost the visibility of Budweiser — and make good on a Fifa sponsorshi­p agreement worth hundreds of millions of dollars over a decade — without upsetting some Qataris’ conservati­ve sensibilit­ies and even compromisi­ng their ability to operate in the country.

The brand will limit explicit mentions of Budweiser and even Budweiser Zero to “stadiums in the outer concourse and where it’s licensed to be able to be sold, in restaurant­s across the city”, said Todd Allen, Budweiser’s vicepresid­ent of global marketing. Branding on and within the W Hotel, which Budweiser will take over for events and parties during the tournament, will be limited to Budweiser Zero or the brand’s bow tie outline without script.

All of the internal preparatio­ns are important, but the internatio­nal marketing will be even more intense.

“Usually, host nation beer companies see a nice volume uplift, and — importantl­y — fans buy the premium offerings, which is good for profits,” said Duncan Fox, a senior consumer products analyst for Bloomberg Intelligen­ce. This time, the focus will be on maximising visibility in large beer-drinking markets such as Brazil, the US, UK and much of Western Europe. There, AB InBev “will advertise Bud to death for six weeks”.

 ?? /Stu Forster/Getty Images ?? Official beer: Stocking up for the World Cup has been a huge undertakin­g.
/Stu Forster/Getty Images Official beer: Stocking up for the World Cup has been a huge undertakin­g.

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