Anheuser-Busch InBev Revenue Declines to $46.8 Billion in 2020

Anheuser-Busch InBev’s 2020 global revenues declined 3.7%, to $46.8 billion, driven by the continued impact of the COVID-19 pandemic in what was “undoubtedly a difficult year for our colleagues and our business,” CEO Carlos Brito said during a call with investors and analysts Thursday to discuss the company’s Q4 and full-year 2020 earnings.

“While we started the year with good momentum, our overall results in 2020 were significantly impacted by the disruption caused by the COVID-19 pandemic,” Brito said. “While the first half of the year was extremely challenging, we were able to pivot quickly to deliver volume growth in the second half of the year.”

A-B’s full-year volumes declined 5.7%, but the pandemic’s worldwide closure of the on-premise channel created different results in the first (-13.4%) and second (+1.8%) halves of 2020. Following the same pattern, revenue declined 12% in the first half of the year, but rebounded to +4.4% in the second half. Revenue per hectoliter grew 2.1% for the year.

In the U.S., A-B’s depletions (sales to retailers) declined 0.2%, lagging behind the overall beer industry (-0.1%). A-B’s shipments (sales to wholesalers) declined 1.7%.

“The U.S. had an amazing year last year,” Brito said. “If you look at STRs, we’re almost flat at -0.2% in an industry that was flat; share we lost, but only 5 bps [basis points]. And our net revenue grew by 2.6%, so very healthy.”

A-B’s above premium offerings, which include the country’s No. 2 selling beer Michelob Ultra and the company’s stable of hard seltzers, gained an estimated 110 share basis points, while mainstream brands lost an estimated 115 bps.

Brito credited A-B’s success in the U.S. to its “consistent execution” of the company’s “consumer first strategy” that focuses on “premiumization, health and wellness, and innovation.” A-B has prioritized hard seltzer, which checks boxes for each of these consumer trends.

“We’re committed to win in the fast-growing seltzer segment with a portfolio approach, enhanced by recent innovations such as Michelob Ultra Organic Seltzer and Bud Light Seltzer Lemonade,” Brito said.

In fact, A-B’s beyond beer offerings, which include a bevy of hard seltzers, ready-to-drink canned cocktail brand Cutwater Spirits and Babe canned wine, reached “well over” $1 billion in revenue and saw double-digit year-over-year growth in 2020, according to the company’s annual report. Worldwide, innovation products contributed $5 billion in revenue.

The company’s hard seltzer portfolio includes Bud Light Seltzer, Bud Light Platinum Seltzer, Bon & Viv Spiked Seltzer, Natural Light Seltzer, Michelob Ultra Organic Seltzer, Maha Organic Hard Seltzer, Social Club Seltzer as well as hard seltzer brands produced by breweries in A-B’s Brewers Collective craft division, such as Breckenridge Brewery’s Good Company Hard Seltzer, Kona Island Seltzer, Karbach Brewing Ranch Water Hard Seltzer and Golden Road Fruit Cart Hard Seltzer — and it’s still growing.

Cacti, the agave-based hard seltzer A-B created with musician Travis Scott, will launch next month. Last week, local lifestyle blog SanDiegoVille.com floated an unconfirmed rumor that A-B was in the process of acquiring San Diego-based Ashland Hard Seltzer. A company spokesperson declined to comment on the rumored deal. During his prepared remarks, chief financial officer Fernando Tennenbaum alluded to future M&A activity, saying A-B “will always be ready to look at opportunities when and if they arise.”

In the fourth quarter of 2020, A-B’s margin in the U.S. compressed 295 bps, to 38.2%, which Brito attributed to three factors: increased on-premise sales and marketing spending as the channel reopened, importing cans from its global network as U.S. can supply tightened and increased trucking and logistic costs driven by consumers’ reliance on e-commerce. He expected the latter two to remain elevated in 2021.

“The can costs will continue to be under pressure,” Brito said.

Digital Marketing and E-Commerce Lead Recovery

Worldwide, A-B has developed e-commerce platforms for both consumers and business partners.

Monthly active users of BEES, A-B’s global business-to-business e-commerce platform, reached 900,000 in December 2020 and recorded $3 billion in gross merchandise value for the year, two-thirds of which occurred in Q4.

“The more we know our customers the better partners we can be in driving mutually beneficial growth,” Brito said. “The results are powerful.”

A-B’s direct-to-consumer business topped $1 billion through its own channels in 2020, according to the company’s annual report. The company’s e-commerce platforms, which grew 200% year-over-year, accounted for 35% of DTC revenue. The legal feasibility of DTC platforms varies by market, but in Brazil, A-B’s beer delivery platform Zé Delivery fulfilled 27 million orders last year. A-B has more than 20 e-commerce DTC ventures worldwide, according to its annual report.

During pandemic-driven lockdowns, A-B launched a series of 350 virtual online concerts in Brazil that garnered 678 million views in 12 weeks, facilitated by its internal agency DraftLine.

“We’re trying to be evermore into the one-to-one conversation with our consumers and DraftLine has a big role to play and data has a big role to play,” Brito said.