Dive Brief:
- AB InBev saidits most recent earnings rose13.8% before interest, taxes, depreciation and amortization to $5.73 billion during the quarter, just below Wall Street's forecast. Revenue rose 3.6% to $14.74 billion in the third quarter as the company benefited from increased sales of its beer overseas. In North America, revenue declined 5.3% to $4.12 billion.
- The maker of Budweiser, Corona and Stella Artois said it sold 1.5% less beer than a year earlier. Continued strong growth in Mexico, Argentina and Africa was more than offset by soft shipment volumes in the U.S., its largest market, following hurricanes in Florida and Texas.
- AB InBev said its market share declined 0.8% in the U.S. "Our market share remains under pressure while we continue to balance the share and profitability equation,"the company said in a statement."However, we are encouraged by the share growth of our Above Premium brands, as well as the improved responses to the new content in our marketing campaigns."
Dive Insight:
The global beer juggernaut watched its market share slip again in the U.S., its biggest market — especially as some of its key regions were battered by hurricanes.
年代ales of Bud Light, the nation's top selling beer, along with Budweiser, remained challenging as drinkers moved to craft beers and cheaper lagers. During the quarter ended Sept. 30, AB InBev estimated Bud Light lost nearly 1% point in market share while Budweiser slipped just under half of a percent.
To help promote its brand, AB InBev rolled out a Bud Light ad campaignthat underscores the simplicity of its beer while mocking other more complex brews — an initiative that so far has been well received, according to the company.
"We have been customizing content to identify with consumers at a more local level, and as we see improvement in activated markets, we will continue to expand the program," the earnings report states. The company also has taken steps to boost momentum for Budweiser, including labels with themes such as apatriotic "America" logoandpackaging honoring where the state where the beer is made.
The difficulties plaguing the brewer were offset by strong results in premium brands, which gained about half a percent in market share. Michelob Ultra grew volumes by double-digits and was the top share gainer in the U.S. for the 10th consecutive quarter, achieving the highest quarterly share gain in the past five years, the company said. Stella Artois, one of the top three fastest growing import brands when it comes to sales to retailers, had another strong quarter.
AB InBev, has faced increased competition from upstart craft breweries, many of which offer clever names such as Blind Pig IPA and Brew Free! or Die IPA, and new-age flavors sought by millennials craving a more adventurous sense of taste than their parents. The brewing giant, which has purchased nearly a dozen craft beers during the last six years — includingDevil’s BackboneandKarbach Brewing Co. — said its craft portfolio continues to gain share.
The beer maker, which came together last year followingmega-merger between SAB Miller andAnheuser-Busch InBev, said the integration remains on track. Cost savings from the deal could reach at least $3.2 billion compared with the company's earlier $2.8 billion estimate, the earnings report said.
