Anheuser-Busch InBev estimated its sales to U.S. retailers fell 2.9% in the first quarter, nearly twice as face as the 1.6% overall industry decline.
Sales to U.S. wholesalers fell even more: down 4.7%, “due to planned adjustments to wholesaler inventories in the normal course of business.”
Blame the Premium Light and Premium Regular segments for those declines. ABI noted that there was continued growth in the Above Premium segment, which gained about 30 bps of total market share in the quarter.
Michelob Ultra, with its “Active Lifestyle” positioning, was the top share gainer in the U.S. for the eighth consecutive quarter and IRI says it’s now the market leader in the Above Premium segment by volume, the company said, adding ABI’s other Above Premium brands also performed well, led by Stella Artois and the regional craft portfolio.
ABI said its value brands also played well, “leveraged by the Busch Super Bowl ad.” Importantly, while the entire bev/al industry talks about above premium as the key to the future, ABI acknowledged “these brands have retained many loyal customers and continue to play an important role in our portfolio.”
Meanwhile, ABI’s two largest brands continue to fail to connect with consumers in a meaningful way. Bud Light volume trends in the quarter were mixed, with positive share trends in some states not enough to reverse the negative trends in our largest markets. A new Bud Light campaign, entitled “Famous Among Friends,” was launched in the first quarter and aired during the Super Bowl. The spot is intended to bring the brand back to its roots. Bud Light STRs declined by mid-single digits in the quarter, with an estimated total market share loss of approximately 65 bps.
Budweiser volumes were also down mid-single digits with market share loss of approximately 35 bps. However, the brand has established a strong platform, which reinforces the brand’s quality credentials and proud American heritage.
Volumes may be down, especially for ABI’s two giant U.S. brands, but the company kept raising prices. That may explain, at least in part, the volume decline. It’s not a strategy that’s working, ABI virtually conceded: U.S. beer revenue per hectoliter grew 2.2%, but volume plunged 4.7% in the quarter – and revenue overall in the U.S. fell 2.6%.
On a global basis, ABI revenue grew 3.7%, with revenue per hectoliter growing 4.3%. Volume growth in China, Brazil and Mexico failed to offset declines in the U.S., Columbia and South Africa. The result: Total volume was down 0.5% globally, while our brand volume as fell, albeit by a lesser amount – 0.2%.
Combined revenues of ABI’s three global brands, Budweiser, Stella Artois and Corona, grew 12.1%, the company said. Budweiser revenues grew by 7.3%, with 16.4% growth in revenues outside of the U.S. Stella Artois revenues grew by 21.1%, driven mainly by growth in the US and Argentina. Corona had a solid quarter as well, with revenues growing 18.2%, with 48.2% growth in revenues outside of Mexico, as a result of strong growth in Western Europe and China.
On a consolidated worldwide basis, ABI’s profit soared to $1.458 billion, or 74 cents a share, from $844 million, or 51 cents a share.