Bud Light Drags Anheuser-Busch InBev’s US Business; Global Revenue Still +5%

The accelerated downturn of Bud Light led to double-digit declines in shipments, depletions and revenue for Anheuser-Busch InBev’s (A-B) U.S. business in the third quarter.

A-B’s U.S revenue declined -13.5% in Q3, with revenue per hectoliter increasing +4.9% due to “revenue management initiatives.” Q3 shipments (sales to wholesalers) declined -17.6%, while depletions (sales to retailers) declined -16.6%, “primarily due to the volume decline of Bud Light and impacted by shipment phasing ahead of our October price increase last year.”

Through the first nine months of 2023, A-B’s U.S. revenue has declined -7.1%, with revenue per hectoliter growth of +5.3%. Shipments and depletions in the U.S. declined -11.7% and -11.8%, respectively. EBITDA decreased -20%.

Nevertheless, A-B’s overall results reflect the global nature of its business. A-B posted global revenue growth of +5%, with EBITDA growth of +4.1%, despite its lagging U.S. sales.

“The strength of our global footprint delivered another quarter of top- and bottom-line growth,” A-B InBev CEO Michel Doukeris said in the earnings statement.

A-B noted that it posted revenue growth in about 80% of its markets in Q3, driven by a revenue per hectoliter increase of +9%, via “pricing actions, ongoing premiumization and other revenue management initiatives.”

Through the first nine months of 2023, A-B’s worldwide revenue is up +8.3%, with revenue per hectoliter increasing +10.1%.

A-B InBev’s worldwide volume declined -3.4% in Q3, with its own beer volume declining -4%. Through three quarters, A-B’s total volume has declined -1.4% year-over-year, with its own beer volumes declining -1.9%.

During a Q&A with Wall Street analysts, Doukeris shared that polling of lapsed Bud Light drinkers found that around 40% of them said they’re open to drinking Bud Light again. He added that those results give management a sense of moving in the right direction.

A-B management said its market share has remained stable from the last week of April – the month that the conservative-led boycott of Bud Light and A-B brands started – through the end of September.” Moving forward, A-B’s U.S. strategy is to invest in its “megabrands, wholesaler support measures and key partnerships, including the NFL and Folds of Honor, as well as new activations in college football and the NBA.”

Doukeris said the company is committed to investing in Bud Light, and pointed to marketing campaigns over the summer and into the NFL season, and a renewed sponsorship of the Ultimate Fighting Championship (UFC).

Doukeris pinned two-thirds of the company’s EBITDA decline of -29.3% on the company’s market share performance, and the remaining one-third on “productivity loss, increased sales and marketing investments and support measures for our wholesaler partners.”

A-B has begun to claw back 10 to 15 basis points (bps) of market share every two weeks, mostly due to the Michelob Ultra and Busch Light brands, Doukeris said. Those brands have “remained fairly healthy,” he continued.

In regards to lost shelf space in the fall resets for Bud Light, Doukeris said the losses amount to less than one facing on average, and he noted that Michelob Ultra and Busch Light have both gained space. He said around 10% of chain stores have made changes, and the main takeaway for Bud Light is a loss of around .8 facings out of an average of 20 facings per store. That amounts to 5% of the cubic space Bud Light holds, he continued.

Doukeris was also asked if GLP-1 diabetes and diet drugs such as Ozempic have had any effect on A-B’s business. He said the penetration of the drugs remains small and the perspectives on the impact on the business varied. However, he said there has been no impact on the business so far.

A-B noted that its spirits-based ready-to-drink portfolio posted double-digit volume growth. Globally, A-B’s beyond beer brands have contributed more than $385 million in revenue.