Anheuser-Busch InBev SA/NV, the world’s biggest brewing company has reported a 4.7% increase in revenue to US$13.07 billion in the first quarter of the year boosted by strong growth in emerging markets such as Mexico, South Africa, and China.
The company saw a rise in combined turnover for its Budweiser, Stella Artois and Corona brands which grew by 7.9%.
Including the integration of SAB Miller which it completed its acquisition in 2016 for US$103 billion, gross profits were up 6.9% to US$8.09 million, delivering US$160 million of synergies and cost savings in the quarter.
In the US, revenues declined 2.5% partly due to cooler weather with challenges on Bud Light brand was the leading beer brand in the social conversation for the second consecutive quarter.
“Our portfolio of global brands allows us to reach consumers across a variety of occasions, and we see the potential for further growth as premiumization continues to be a global trend.
We are also stepping up our distribution and activation of this portfolio across many new markets, such as Colombia, Peru, Ecuador, Australia and South Africa,” said AB InBev in a statement.
The premium brand portfolio performed well led by Michelob Ultra whose volumes were up by double-digits attributed to increased awareness and the launch of Michelob Ultra-Pure Gold a low-calorie beer in the first quarter.
In the growth and health category, Near Beer portfolio performed well while Natty Rush and Spiked Seltzer grew by triple-digits as they continued to build on the brand in the summer.
Market share in the quarter declined driven by the impact of the industry segment mix shift and EBITDA was down 5% given costly commodities and distribution expenses due to increased freight costs in the US.
Mexico recorded significant growth in both volumes and revenues on proper timing for Easter across its brands including Corona, ‘health’ brand Victoria and Bud Light which penetrated well in the North region.
Premium brands accelerated their double-digit growth, led by Michelob Ultra capitalizing on increasing health and wellness trends, and Stella Artois.
China sales were up 4.4% and South Africa saw a revenue growth of mid-single digits, as Budweiser was launched in the country earlier this year in preparation for the upcoming FIFA World Cup.
Revenue grew mid-single digits in South Africa, Castle Lite growing strongly in the core plus segment coupled with online engagement through its partnership with the famous rap artist Chance the Rapper.
It was also boosted by the launch of Budweiser in March and 1-liter returnable bottle launched in 3Q17 offering core and core plus brands in an affordable multi-serve format to reach new consumers in more occasions.
AB InBev’s CEO Carlos Brito had earlier noted that they see 20% of the company’s sales volumes come from its low or no alcohol portfolio by 2025, up from 8%.
To deliver on its sustainability agenda, AB InBev aims to obtain 100% of its purchased electricity from renewable sources, has launched a new accelerator programme which will identify promising sustainability technologies.