Anheuser-Busch InBev Q1: US Shipments -3.8%, Depletions -5% But Revenue +2.1%

Anheuser-Busch InBev increased total revenue (+11.1%), volume (+2.8%) and revenue per hectoliter (+7.8%) in the first quarter of 2022, the company reported today.

“Our business momentum continued this quarter, and we are very pleased with our performance to start the year,” CEO Michel Doukeris said during a conference call with investors and analysts.

Doukeris said the growth was “driven by the implementation of pricing actions across all markets, enhanced by ongoing premiumization and continued recovery of the on-premise channel.”

In the U.S., shipments (sales to wholesalers) declined -3.8% and depletions (sales to retailers) declined -5%. A-B’s Q1 performance lagged behind the rest of the U.S. beer industry, which the company attributed to the Omicron variant surge in January.

U.S. revenue increased +2.1%, outpaced by revenue per hectoliter growth (+6.2%), which was “driven by revenue management initiatives and continued premiumization,” according to a press release.

“We continue to execute our commercial strategy, rebalancing our portfolio toward faster growing above core segments and adjacencies,” the release said. “Our above core portfolio continues to outperform, led by Michelob Ultra, which grew double digits. Our premium and super premium brands grew in the mid-single digits.”

Year-to-date through April 17, dollar sales of the Michelob brand family increased +4.9%, to $932.7 million, at off-premise retailers tracked by market research firm IRI. The brand family’s dollar share of the category increased +0.59%, to 7.68%. Its price per case increased $0.87 compared to the same period last year.

The Bud brand family’s dollar sales declined -7.6% year-to-date through April 17, and the brand lost nearly three-quarters of a percent of dollar share. The price per case for Bud family products (excluding Bud Light Seltzer) has increased $0.96, according to IRI.

A-B’s lines of spirit-based, ready-to-drink (RTD) canned cocktails, Cutwater Spirits and NÜTRL vodka seltzer, have been growing “ahead of the industry,” the release said. Between 70-80% of Cutwater Spirits’ growth has been incremental to A-B’s business in the U.S., Doukeris said.

Growth in the beyond beer segment has shifted from hard seltzers – the growth of which was “accelerated during the pandemic based on being the right moment being the hot new kid on the block” – to RTDs, Doukeris said.

Dollar sales of the Bud Light Seltzer family declined -4.2% year-to-date through April 17, but Doukeris noted that hard seltzer business is seasonal and Q1 is typically their slowest period.

A-B’s commercial strategy consists of driving growth in five key areas:

  • Smaller pack sizes and lower price points;
  • Continued growth of the mainstream core portfolio;
  • Development of new occasions through non-alcoholic offerings;
  • Premiumization through the above core portfolio;
  • And malt-, sugar- and spirit-based beyond beer offerings.

New products from the innovation pipeline across all five growth areas accounted for nearly 8% of total revenue during the quarter. In Q1, A-B’s global beyond beer portfolio brought in more than $350 million in revenue from brands such as Cutwater and Michelob Ultra Organic Seltzer in the U.S. and Flying Fish and Brutal Fruit in international markets.

Michelob Ultra has expanded to 14 markets worldwide and led growth in the company’s above core portfolio, which includes Stella Artois, Budweiser and Corona Extra and increased revenue by more than +15%.

A-B’s digitization of revenue channels continues to deliver. More than half (53%) of A-B’s revenue flowed through digital business-to-business platforms during Q1.

BEES, the company’s B2B e-commerce platform, is now accessed by 2.7 million monthly users in 11 countries who place 1.7 million orders per week. The platform recorded a $6.5 billion gross merchandise value in Q1, up from $3.5 billion during the same period last year.

Overall, A-B’s DTC platforms drew almost $300 million in revenue through more than 17 million orders. In Brazil, A-B’s Zé direct-to-consumer e-commerce delivery platform operates in 300 cities and reaches about half the country’s population. It recorded +29% net revenue growth in Q1.

Asked if the company will increase price in some markets, Doukeris said A-B will “continue to monitor very closely how things are working.”

“We can see clearly on the price to consumer that beer is behind inflation so far,” he said, adding that two-thirds of the company’s markets posted “very good growth in the quarter.”