On Thursday, Anheuser-Busch InBev will announce its results from the first quarter of 2021. The numbers are the first to follow 2020’s full-year sales decline of 3.7%. Here’s a look at the news that is likely to have shaped the group’s performance in the three months to the end of March.
Anheuser-Busch InBev started 2021 in much the same way it spent 2020 – with a US hard seltzer launch. Bud Light Seltzer Lemonade joined the company’s quickly expanding its alcoholic sparkling water portfolio in January as brand owners continue to seek differentiation in what is now an extremely competitive category.
Brazil looks set to become another competitive area for A-B InBev. The brewer has traditionally dominated the country’s beer scene through its Ambev subsidiary, but Heineken is building new breweries and analysts this year have flagged Brazil as heading for a showdown. In Q1, A-B InBev showed its strength in the country beyond beer with a distribution deal for Beam Suntory’s spirits.
The start of the year saw a raft of investment announcements from A-B InBev. In February, the company heralded a US$1bn investment in the US, while a few weeks later a US$160m UK project to boost capacity was unveiled. A-B InBev looks keen to spend its way out of the coronavirus slump.
The first quarter also saw significant investment from A-B InBev in sustainability initiatives. In February, the company signed a US$10bn loan, payment on which is linked to how well A-B InBev does in reaching certain environmental targets. The scheme appears to be the first of its kind in the alcohol category and highlights the new-found interest in sustainability on the executive floor.
Recent months have seen the first steps towards the standardisation of sustainability reporting. Ben Cooper examines plans announced this month by the International Financial Reporting Standards Foundation for the creatin of a sustainability reporting framework to complement its established financial reporting standards.
It is unlikely that A-B InBev’s sustainability moves had any bearing on the group ending a legal fight with outdoor clothing company Patagonia, viewed as one of the most progressive corporations in terms of environmental outlook. However, end it did after the two companies settled the two-year trademark argument.
Other potential court appointments lie ahead. In February, Constellation Brands did not take kindly to A-B InBev questioning the use of the Corona brand on a hard seltzer and the two are heading for court. One aspect of the looming legal tussle could be of interest to the wider alcohol industry: A-B InBev appears to claim in court documents that hard seltzer is not a beer. As brewers and distillers play fast and loose with production and ingredients, could we be about to get a legal definition of what a hard seltzer actually is?
just-drinks thinks: Anheuser-Busch InBev’s Q1 results are likely to follow the pattern set by other brewers – performance in markets hit by lockdowns will be down in the on-premise but up in the off-premise, although not enough to offset overall declines. The company’s latest US hard seltzer performance will be of interest as it could shed light on whether A-B InBev’s time and investment in the category has made a dent in White Claw’s market leadership.