João Castro Neves, the current AmBev CEO, has been named the Zone President of North America; current North America head Luiz Fernando Edmond will move into the role of ABI InBev's Chief Sales Office; Bernardo Pinto Paiva will be elevated from ABI's Chief Sales Office to AmBev CEO.
Our take: the highly regarded Castro Neves has long been considered a likely candidate to succeed current CEO Carlos Brito, and this move appears to justify this speculation. ABI's two biggest markets are Brazil (30% of profits) and the US (35% of profits) and, after having run Brazil successfully, Castro Neves will now have his crack at running the US, a very meaningful step in preparation for perhaps taking over for Brito at a future time in our view.
A good set of hands on brand and distributor issues. Castro Neves is a good operator and has run AmBev efficiently through some tough times. The brand health of AmBev's trademarks has remained solid and in many cases improved. The company has expanded and improved an already solid and efficient distribution system.
New eyes and hands in St. Louis? Perhaps top management felt it was time for a new set of eyes and hands on the US business, where brand health issues are clearly challenging and distributor network relationships appear to be less healthy than in the recent past; these issues are directly related to each other in our view.
Castro Neves appears more than capable of handling these issues, and we expect the market will receive this as an incremental positive for ABI.