Anheuser-Busch InBev reported +11.3% revenue growth and +3.4% volume growth globally for the second quarter of 2022.
“Our business delivered sustained profitable growth,” CEO Michel Doukeris said in a press release. “Our volume increased by 3.4%, our top-line by 11.3% and EBITDA by 7.2%. The relentless execution of our strategy, the strength of our brands and accelerated digital transformation enabled us to meet the moment in an ongoing dynamic operating environment.”
A-B’s revenue per hectoliter increased +7.5% in Q2, a deceleration from its +7.9% increase in the first half of 2022. Overall revenue increased +11.5% for the first half.
In the U.S., the company achieved “continued top-line growth with flattish bottom-line,” according to the release. Revenue increased +2.7% while revenue per hectoliter increased +5.5%, which A-B said was “driven by revenue management initiatives and continued premiumization.”
However, shipments (sales to wholesalers) declined -2.7%, and depletions (sales to retailers) declined even more steeply at -3.2%.
“The beer industry remained resilient even in the context of a higher inflationary environment,” A-B wrote about the U.S. “Despite underperforming the industry, we remain confident in our commercial strategy to rebalance our portfolio toward faster growing segments.”
In off-premise retailers, A-B’s dollar sales declined -4% year-to-date through July 10 – more than double the beer category’s decline for the same period (-1.6%), according to market research firm IRI. Although, A-B lost nearly a full point of dollar share (-0.91%), with a 36.36% share of the category, it remains more than twice as big as its next largest competitor, Molson Coors (17.08%).
The Michelob brand family posted the most positive trends across A-B’s beer portfolio. Its dollar sales increased +6.3% and gained +0.58% dollar share year-to-date through July 10, according to IRI. For the 12 weeks ending July 10, the Michelob brand family recorded +7.7% dollar sales and +0.58% share.
A-B attributed its U.S. revenue growth to a volume shift to its spirits-based, ready-to-drink (RTD) canned cocktail brand families, Cutwater Spirits and NÜTRL vodka-based seltzer.
“Our above core beer and spirits-based ready-to-drink portfolios outperformed the industry, led by Michelob Ultra, which grew by double-digits and Cutwater and NÜTRL vodka seltzer, which grew strong double-digits,” A-B wrote.
NÜTRL, A-B’s answer to E. & J. Gallo’s High Noon Sun Sips, is the No. 1 vodka seltzer in Canada, where it was launched in 2017 by British Columbia-based distiller Goodridge & Williams, which A-B subsidiary Labatt Breweries of Canada acquired in early 2020. A-B elevated NÜTRL to nationwide distribution in the U.S. earlier this year.
The brand has seen “very accelerated growth, very good news coming from Quarter Two,” Doukeris said, adding that July 4 sales included “high volumes and very good performance.” NÜTRL has been taking “a lot of share from the malt-based seltzers.”
Asked if the company would roll both Cutwater and NÜTRL global, Doukeris said A-B intends to, “once we get this well-established in the U.S.”
“There will be very good opportunities for both Cutwater and NÜTRL to continue to expand globally,” he said.
A-B’s U.S. focus on Cutwater and NÜTRL come as drinks business market research firm IWSR predicted that spirits will overtake beer in total volume next year.
CPI, Pricing and Busch Light?
Doukeris and chief financial officer Fernando Tennenbaum fielded several questions about inflationary pressures across several markets, including in Latin America and Africa, where the company raised prices. The increase did not affect A-B’s volume trends in those markets, which “remain very strong,” Doukeris said.
In the U.S., beer pricing continues to lag behind inflation, although the consumer price index’s (CPI) increase was “bigger than one would expect and even accelerated throughout the year,” Doukeris said.
Asked if Busch Light, which has increased dollar sales +4.9% year-to-date through July 10 in IRI-tracked off-premise multi-outlet food and convenience stores, was benefitting from consumers trading down due to inflation, Doukeris countered that the below-premium brand would be on a positive trajectory without the current economic environment.
“Busch Light is in a big run for several quarters already, growing as one of the top growth brands in the U.S. – very healthy, expanding from the inner parts of the country and growing now to more regions, and it continues to accelerate,” he said. “But I don’t think that has any relation to short-term pressure on consumers or trade down. It’s much more brand momentum behind Busch Light that’s working very well.”
BEES’ Buzz Continues to Grow
A-B’s B2B e-commerce platforms now account for about 55% of the company’s revenue, with its BEES platform reaching 2.9 million monthly active users last month, 1.1 million more than it had in June 2021. Those users placed 1.9 million orders per week last month, up 500 million weekly orders from June 2021.
During Q2, more than $385 million in revenue over more than 16 million e-commerce orders flowed through the system.
BEES is now functional in 12 countries, including Brazil, where Zé Delivery, the company’s direct-to-consumer e-commerce platform, operates. The combination of B2B and DTC platforms in Brazil has delivered 26.8% top-line growth.
“Brazil is a great example of our evolution towards becoming a tech-first FMCG [fast-moving consumer goods],” Doukeris said. “Our advanced digital transformation allows us to capture both growth and operating efficiencies. Our beer volumes once again outperformed the industry, growing by 8.5%, led by our core brands, and over 20% volume growth of our premium and super premium brands.”