AB-InBev beer sales bounce back in Q3 as consumers adjust to the new normal of drinking

BELGIUM – AB-InBev beer sales increased by 2.6% in Q3 as Consumers have quickly adjusted to the new reality by shifting to in-home consumption occasions.

AB-InBev says this rise in beer sales translated to a 4% growth in revenues in 3Q20. Across the first three quarters of the year, however, revenue declined by 6.8% – hit by the pandemic – with revenue per hl growth of 1.6%.

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The brewer’s total volumes grew by 1.9% in 3Q20, with own beer volumes rising by 2.6% and non-beer volumes recording a 2.5% decline.

For the 9 months ending September, AB-InBev’s total volumes declined by 8.2%, with own beer volumes down by 8.3% and non-beer volumes.

“Our global brands [Budweiser, Stella Artois, Corona] and High End Company [specialty and craft] outperformed this quarter, with the global brand portfolio revenue increasing by 8.1% (outside of the brands’ home markets) and the High End Company revenue up by 6.5%, demonstrating the continued strength of the premiumization trend,” ​ AB InBev said in  a statement.

“We also improved our performance in our core portfolio, as consumers gravitated toward established brands that they know and trust.” ​

The world’s largest brewer, however, warns that the market remains unpredictable: particularly in areas such as Europe where increased restrictions and renewed lockdowns are coming into force.

“While we expect our performance in the second half of this year to be better than the first, the environment remains volatile and uncertain, especially as some governments are renewing restrictions in several markets.” ​

Ab-inbev

Key market performances

United States

AB-InBev said that US delivered a strong quarter, driven by consistent execution of consumer-focused commercial strategy.

According to the company, 3Q20, sales-to-retailers (STRs) grew by 1.4%, outperforming the industry that was up by 0.8%.

Sales-to-wholesalers (STWs) on the other hand, increased 1.0% and total revenue grew by 4.5%.

Overall, Total revenue for the company grew by 4.5% while Revenue per hl was up 3.5% driven by revenue management initiatives and favorable brand mix, enhanced by the strong performance of its seltzer brands during the summer.

Brazil

In Brazil, AB-InBev said that it saw  a very healthy performance in the third quarter, with volumes rising by 25.4%.

The company’s non-beer volumes grew by 4.3% in the quarter as we saw a return of consumption occasions, particularly in the premium segment.

The combined businesses delivered volume growth of 19.8% and total revenue growth of 21.4% in the quarter.

Revenue per hl increased by 1.3%, primarily due to revenue management initiatives and category mix, partially offset by unfavorable channel and geographic mix.

Europe

AB-InBev noted that the business in Europe delivered a ‘healthy performance’ this quarter with revenue growth of mid-single digits.

This growth, according to AB-InBev, was supported by the continued strength of brands in the off-premise channel and the gradual re-opening of the on-premise channel.

“We are encouraged by the performance of our business in the third quarter, while remaining cautious as we are now seeing renewed COVID-19 restrictions across Europe,” AB InBev said.

South Africa

The South Africa business, according to AB-InBev was significantly impacted by the second outright ban on the sale of alcohol beverages from mid-July to mid-August, resulting in volume and revenue declines of nearly 25% in 3Q20.

“We observed robust consumer demand once the government lifted the ban with volume growth resuming in September.” ​

AB InBev further noted that in South Africa, consumers are shifting to more affordable brands and bulk returnable packages.

China

Growth in China is being driven by premium and super premium portfolio and success in the in-home and e-commerce channels, according to AB-InBev.

“Our e-commerce business continued to grow by double-digits, and we grew the most market share among brewers in the increasingly relevant in-home channel,”​ AB-InBev said.

“We delivered volume growth of 3.1% in China this quarter, supported by the ongoing recovery of the market, particularly in the on-premise channel.”

Revenue grew by 4.8%, with revenue per hl up by 1.6% on top of a challenging comparable, driven by the improving channel mix and continued premiumization.

Africa excluding South Africa

Ab-InBev noted that majority its markets demonstrated ongoing resilience and continued recovery from the second quarter.

“We delivered healthy volume growth in Mozambique, Uganda and Zambia, though volumes declined in Tanzania,” AB-InBev said.

The company further noted that in Nigeria, it was able deliverer a double-digit volume growth as COVID-19 restrictions continued to ease.

We are seeing success in the market from investments made in enhancing our brand portfolio and advancing our route-to-market capabilities.

Commitment to Scaling New Digital Capabilities

Ab-InBev noted that it was seeing a rapid acceleration in trends such as online B2B platforms, e-commerce and digital marketing and as such committed to furthering investing in this area.

It noted that moving forward it will continue with its strategy to digitize relationships with customers as it resulted in convenience, seamless communication and, most importantly, enhanced business performance.

It also committed to Consistent investments in e-commerce platforms in line with the increasing trend of customers going online to buy beer.

Parting shot

“While we expect our performance in the second half of this year to be better than the first, the environment remains volatile and uncertain, especially as some governments are renewing restrictions in several markets,” AB-InBev said.

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