A-B Cutting Jobs Mostly in The High End

FILED SEPTEMBER 7, 2017

Dear Client:

A-B sent word to wholesalers today that they are undergoing a significant restructuring of their U.S. field sales team. Much of it involves The High End unit.

Between their partnerships involving Teavana, craft partners and more, A-B has added more than 2,000 people in the last few years to their U.S. employee roster. They now employ more than 18,000 in the country. As we understand, these layoffs will affect less than 2% of their total U.S. workforce.

HIGH END SALES REPS AND DMS DISSOLVED. Again, the majority of the "simplifications" affect their 3,000-person High End unit. A-B's craft unit will see its district managers and sales reps positions dissolved, in what could possibly affect hundreds.

As we understand, the move is actually in response to wholesaler feedback, who've asked for some streamlining: a single point of contact for the A-B portfolio.

As a result, a single DM will handle the full A-B portfolio; that person will get more training and support from The High End. (We understand that A-B still has the sales reps that sit with their craft partners, however.)

INVENTORY MANAGERS ADDED. But A-B said they'd be adding Inventory Managers in each region to support inventory and forecasting in specific markets. (These were piloted in Region 1 and "will play an important role nationwide moving forward.") These guys will work with DMs and regional craft brewery managers, "and THE Directors in each region will remain in place and oversee this activity," per note.

OTHER CHANGES: BAMS AND TAMS GONE. BAMs, or Brand activation managers (who did sampling, etc.) and TAMs (we're not sure what the "t" stands for, but they built displays in stores) are also gone. A-B says they initially provided incremental value but they're not the best use of resources for driving sales. Again, their wholesaler panel and survey agree that their cost (which A-B and wholesalers shared) didn't provide a significant enough return. This cut will "free up resources" for better returns, per note.

REGION 1 MOVING. "And, finally, we have decided to move our Region 1 office from Boston to New Jersey, effective early 2018 in order to centralize this team geographically within the region," per wholesaler letter. There are still details to work out there.

One A-B source told us today's announcement is about efficiency rather than pullback in the U.S., pointing to May's capex announcement that they'll invest $2 billion here through 2020.

Until tomorrow,

Harry, Jenn, and Jordan

"It is useless to attempt to reason a man out of a thing he was never reasoned into." - Jonathan Swift

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