Beverage News / Beer

Anheuser-Busch InBev reports Q1 2013 results

April 30, 2013

Leuven, Belgium-based Anheuser-Busch InBev (AB InBev) reported that its total revenue grew 1.5 percent in the first quarter of 2013, with strong revenue per hectoliter growth of 5.8 percent due to the company’s revenue management initiatives and the premiumization of its brand portfolio in key markets. On a constant geographic basis, revenue per hectoliter grew by 6.9 percent, it reports.

However, total volume declined 4.1 percent, with beer volume down 4 percent and non-beer volume declining 4.8 percent, AB InBev reports. Volume performance in the quarter was affected by short-term pressures on consumer disposable income, increased gas prices and poor weather, the company says. Nevertheless, the company’s three global brands — Budweiser, Stella Artois and Beck’s — grew by 4.7 percent with global Budweiser volumes growing by 8.4 percent, driven by good performances in China, Brazil, Russia and the Ukraine, it says.

“We have confidence in the long-term potential of our brands and continued to invest behind
them, even in a tough quarter, with sales and marketing investments for the company increasing
by 3.5 percent, compared to [the first quarter of 2012], despite volume-related reductions in sales expenses,” the company said in a statement.
In the United States, the company reported selling-day adjusted sales to retailers declined by 4.1 percent against solid growth of 1 percent.

In terms of products, U.S. beer-only revenue per hectoliter performed well, growing by 4 percent in the quarter, the company says. This growth was due to the carryover benefit of the price increase from the fourth quarter of 2012 as well as brand mix contribution of approximately 150 basis points, it says. The favorable brand mix contribution was driven by innovations launched in both fiscal year 2012 and the first quarter of 2013, including Bud Light Platinum, Budweiser Black Crown, Bud Light Lime ‘Lime-A-Rita’ and Bud Light Lime ‘Straw-ber-Rita,’ as well as growth of the company’s high-end brands, especially Stella Artois and Shock Top, it says.

The company estimates that its Focus Brand families, which includes Budweiser, Bud Light, Stella Artois, Beck’s, Michelob Ultra, Leffe, Hoegaarden, Skol, Brahma, Antarctica, Quilmes, Harbin, Sedrin, Klinskoye, Sibirskaya Korona, Chernigivske, Hasseröder and Jupiler, gained market share collectively in the first
quarter, as measured by sales to retailers, with total estimated market share declining by approximately 50 basis points. This was primarily due to the performance of the company’s sub-premium brands, given the pressure on disposable income, and its strategy of narrowing the price gap between its premium and sub-premium brands, it says. Overall, share for the Budweiser family was flat, with the launch of Budweiser Black Crown in January offsetting other share declines for the brand; share for the Bud Light family was marginally down versus the same period last year, partially offset by solid results from Bud Light Lime ‘Straw-ber-Rita’ and Bud Light Lime ‘Lime-A-Rita,’ which achieved a combined market share of 0.6 percent during the quarter. Share for Michelob Ultra and AB InBev’s high-end brands, especially Stella Artois, Shock Top and Goose Island, gained share in the quarter, according to the company.

AB InBev also reported that all regulatory approvals necessary for closing the Grupo Modelo transaction have now been obtained, and it expects the acquisition to close in June. Upon closing, the company plans to deliver $1 billion in cost synergies, as previously committed, and help expand Corona sales worldwide, it says.

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