Corona is one of A-B InBevs global brands

Corona is one of A-B InBev's global brands

In February, Anheuser-Busch InBev released two Budweiser ads for its annual Super Bowl campaign.

The first was classic Budweiser - all Clydesdale horses and gambolling puppies. The second, however, was a thinly-veiled attack on the “pumpkin peach ale” world of craft beer and its supporters. At the time, I called it “downright hostile”, and thousands took to social media to berate the big brewer for its perceived arrogance.

For A-B InBev, however, the ad was just the most visible sign of a change in the brewer's strategy on its global beer brands.
According to a note from Stifel's Mark Swartzberg in September this year, A-B InBev had since early 2014 been determined to be more "disruptive" in the beer market. 

“Commercially, this means protect and improve base brands [and] elevate core brands,” said Swartzberg. And all with the end goal of faster topline growth.
A look at the analyst reports from last week's third-quarter results suggests that A-B InBev is reaping the rewards of its more aggressive stance.

Nomura's Edward Mundy says the brewer's “top-line growth initiatives [are] starting to pay off” as the company's global beer brands - Budweiser (+12%), Corona (+11%) and Stella Artois (+13%) - drove impressive volumes growth. Third-quarter volumes growth was far ahead of expectations and an increase on H1's.

This, according to Mundy, sets A-B InBev up to attack emerging markets with its star beers. Currently, 90% of Budweiser's volumes come from just six markets, whereas 70% of Corona's volumes (if you discount the US, where it is controlled by Constellation Brands) are in Mexico. “The opportunity for premiumisation in existing and new markets would appear attractive,” Mundy says.

Bernstein's Trevor Stirling, however, says that the volumes outlook for A-B InBev may not be so favourable for the next quarter. “Sales to wholesalers and sales to retailers are aligned in the US, there will not be a World Cup comparison effect in Brazil and the benefits of warm weather in Mexico drop out,” he says. 

But despite some caution, analysts were overall impressed with A-B InBev's results as its determination to be disruptive pays off. It may also pay off in other ways - with the SABMiller deal still on the table, last week's performance adds another card to what A-B InBev hopes is already a winning hand.