AB InBev saw its net revenue increase 4.7% to $13.07 billion in the first quarter of the year as the combined turnover of its Budweiser, Stella Artois and Corona brands grew by 7.9%.
The company, which also owns Beck’s, Hoegaarden and Leffe, recorded strong growth in Mexico, South Africa and China. However, revenues in the US were down 2.5%, which was partly due to cooler weather.
Gross profits were up 6.9% to $8.09 billion as the firm continued to benefit from the integration of SAB Miller, delivering $160 million of synergies and cost savings in the quarter.
In the US, Bud Light faced challenges and the company’s sales to wholesalers were down 4.4%. Attention was drawn to the positive performance of the business’s premium portfolio, which benefited from the launch of Michelob Pure Gold.
Stella Artois delivered double-digit top-line growth in the quarter.
The company saw revenues in its Mexican unit increase “in the high teens” thanks to the performance of Corona and Victoria. It said that premiumisation remains a key opportunity for future growth in the country, where the premium segment is only a low-single digit percentage of the country’s volume.
In China sales were up 4.4% and South Africa saw a revenue growth of mid-single digits, as Budweiser was launched in the country earlier this year in preparation for the upcoming Fifa World Cup.
In a statement, AB InBev said: “Our global brands continued to deliver solid results, with revenue growth of 7.9% globally and 12.2% outside of their respective home markets. These brands typically command a premium and contribute higher margins when sold outside of their home markets. Budweiser revenues declined by 1.3% due primarily to a soft performance in the US.
“However, excluding the US, Budweiser saw growth of 2.5% driven by Brazil, Paraguay, India and South Korea. Stella Artois delivered double-digit top-line growth, led by Argentina, the UK and the US. Corona continued to lead the way, with revenues up by 25.1% and by 40.3% outside of Mexico, fueled by strong results from a diverse set of markets.
“Our portfolio of global brands allows us to reach consumers across a variety of occasions, and we see potential for further growth as premiumisation continues to be a global trend. We are also stepping up our distribution and activation of this portfolio across many new markets, such as Colombia, Peru, Ecuador, Australia and South Africa.
“Coming into the second quarter, we are looking forward to the opportunities presented by the Fifa World Cup, with Budweiser acting as a global sponsor. We have many exciting plans in place to activate Budweiser around this platform in existing and new markets driving further awareness, penetration and ultimately brand preference.”
Earlier this year, AB InBev CEO Carlos Brito said he believes that 20% the company’s sales volumes will come from its low- or no-alcohol portfolio by 2025, up from the current level of 8%.
So far this year, the company revealed its sustainability targets – including an aim to obtain 100% of its purchased electricity from renewable sources – and launched a new accelerator programme which will identify promising sustainability technologies.
© FoodBev Media Ltd 2022
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