Anheuser-Busch InBev reports U.S. sales grow 1.6% in the first period as revenue per hectoliter grew 2.6% driven by premiumization and continued investment behind the momentum of ABI’s above-core portfolio and the stabilization of its core and value brands.
But ABI’s sales-to-retailers fell 1.9%, worse than the overall industry decline of 1.6%. ABI’s sales to wholesalers were down 0.9%.
Still, ABI found encouragement, noting that its “market share trend performance continues to improve, as we invest behind the sustained momentum of our above core portfolio and the stabilization of our core and value brands.
“Nine of our brands were among the top fifteen market share gainers in the country” in 1Q19 according to IRI, contributing to an estimated decline in total market share of 10 bps, our best quarterly market share trend performance since 4Q12,” the company said.
ABI said its “above core portfolio outperformed the industry once again, gaining 90 bps of market share as per our estimates, led by Michelob Ultra, our regional craft portfolio, Bon & Viv Spiked Seltzer and our innovations in the segment. Michelob Ultra continues to shine, leading the industry again as the top share gainer in the US.
“Our regional craft portfolio grew double digits in 1Q19, further enhancing our premiumization efforts. Our above core innovations maintained their strong performance and gained share, led by Michelob Ultra Pure Gold Organic, Bud Light Orange and the Budweiser Reserve series,” the company said.
Still, it acknowledged the mainstream segment “remains under pressure as consumers trade up to higher price tiers, with our core, core light and value brands delivering an estimated 100 bps of market share loss in 1Q19.
“Within the mainstream segment, our portfolio had a slight share gain, which compares to a 35 bps share of segment loss in FY18, driven by the improved performance of our value brands led by the Natural family, while Budweiser and Bud Light share trends remain unchanged. Following the most recent Super Bowl’s campaign launch highlighting Bud Light’s commitment to quality and transparency, we are seeing initial positive signs in the key brand health metrics which are near three-year highs as of 1Q19.
“EBITDA grew by 2.5% in 1Q19 with margin expansion of 34 bps to 39.6%, driven by our premiumization strategy and the ongoing optimization of our cost base,” the company said..
On a global basis, revenue grew 5.9% in the quarter, revenue per hectoliter grew 4.6%, and total volume grew 1.3%. ABI’s own beer volumes were up 1% globally and non-beer volumes were up 4.9%.
Global profit rose to $2.516 billion, or $1.27 a share. But strip away mark-to-market gains and the impact of hyperinflation, and underlying profit fell to $1.572 billion, or 79 cents a share, from $1.685 million, or 85 cents a share, a year earlier.