Anheuser-Busch InBev Continues to Grow Global Revenue as US Shipments Decline

Anheuser-Busch InBev, the world’s largest beer maker, today reported 2017 global revenue growth of 5.1 percent even as its core beer offerings continued to suffer in the U.S.

The company’s shipments to retailers declined by 3 percent in the U.S. last year, while sales to wholesalers dipped 3.5 percent. Revenues, meanwhile, declined by 2 percent domestically, despite growth of 1.5 percent on a per hectoliter basis.

Those declines were driven primarily by the company’s core lager portfolio, as Budweiser lost 40 basis points of market share and Bud Light lost 85 basis points of share.

“While we continue to face challenges on Bud Light, we are seeing some encouraging signs,” the company wrote in a press release. “In the second half of 2017, the brand was prevalent across U.S. pop-culture with its highly popular ‘Dilly-Dilly’ campaign, making it the leading beer in social conversation in 4Q17 and solidifying the brand’s ‘Famous Among Friends’ positioning.”

Despite the continued struggle to grow sales of its key offerings in the U.S., the company’s above-premium portfolio gained 45 basis points of market share domestically, driven by double-digit volume growth for Michel Ultra. Stella Artois and the company’s craft portfolio also grew, the company said.

A-B InBev’s total volumes also grew 0.2 percent, the company reported, while non-beer volumes declined 3.1 percent.

Despite the dip in sales for its non-alcoholic offerings, the company said it is still committed to growing that portion of the portfolio to 20 percent of total sales by 2025. It currently makes up about 8 percent of all sales, according to CEO Carlos Brito, who discussed the company’s efforts to expand sales of low- or no-alcohol beer during a call with investors.

According to Brito, low- or no-alcohol products already represent more than 20 percent of sales in five “main countries.”

“That comes with higher margins if done correctly,” he said.

Also during the call, Brito briefly discussed the recent creation of a “High End Company.” The business unit, which is tasked with “invigorating” beer, is now operating in 22 markets that account for 70 percent of the “high end” opportunities worldwide. The division brought in about $4.6 billion in revenue in 2017, he added.

“These high-end brands – global brands, craft brands or specialty brands – they have way higher margins, even after sales and marketing investments,” he said. “It is a great business, and that is why we decided to invest in the High End Company.”

In addition to a greater focus on developing its high-end business in 2018, Brito said the company would also look to “accentuate” the personalities of its core lager offerings in various markets – Budweiser and Bud Light in the U.S. – so that it can reduce cannibalization and strengthen the positioning of each brand.

He added that the first quarter of 2018 would be “soft” as a result of increased sales and marketing costs related to promotions for the World Cup.

A press release with additional details can be found here.

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