Anheuser-Busch InBev’s US volumes declined again in the first quarter of 2024 but the brewing giant pointed to the gains made by Michelob Ultra and Busch Light.

In the three months to the end of March, AB InBev’s volumes in North America fell by 9.9% on an organic basis.

First-quarter revenue from the brewer’s North American operations was down 8.8% organically at $3.56bn

In the US specifically, AB InBev’s revenue declined 9.1%, although the Budweiser owner said revenue per hectolitre was up 1.1% “driven by revenue management initiatives”.

In 2023, AB InBev’s revenue in the US dropped 9.5%. Revenue per hectolitre was up 5.2%.

First-quarter sales-to-wholesalers declined by 10.1%. Sales-to-retailers were down by 13.7%, a drop it attributed “primarily” to the continued lower volumes of Bud Light, which has seen sales hit since the row over a tie-up with transgender influencer Dylan Mulvaney in April last year.

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EBITDA from the country slid 17.9%.

In 2023, AB InBev’s sales-to-wholesalers decreased 12.7%. Sales-to-retailers were down 11.9%. EBITDA from the country slid 23.4%.

Speaking to investors yesterday (8 May), CEO Michel Doukeris stressed the company’s share of the US market “has continued to improve gradually from May 2023 with total market share now flat versus last year”.

He added: “Our portfolio is regaining momentum with growth in key brands, such as Michelob Ultra, Busch Light, Kona, Nütrl and Cutwater. Together with our wholesaler partners, we remain laser-focused on executing our long-term strategy.”

Michelob Ultra has been enjoying “strong momentum” in the US, Doukeris said. “We all know how relevant the brand is and how much the brand has been growing over the years but, moreover, we are all aware of the headroom for growth that the brand has in terms of geographies and channels and how aligned the brand is with current trends in terms of liquid profile, calories and carbs.”

Busch Light, he noted, had enjoyed “when you look at the last few weeks an all-time high share” for the brand, adding: “Very good momentum, plenty of opportunities to continue to expand nationally because the volume today is very concentrated in few regions, and the brand is also very well positioned with a lot of momentum with consumers and consumer needs as of now.

“Our entire strategy in the US is about portfolio rebalance.”

Group-wide revenue increased 2.6% on an organic basis to $14.21bn, matching the consensus forecast. Revenue per hectolitre was up 3.3%. AB InBev said revenues grew in around “75% of our markets”.

Volumes dipped 0.6%. Growth in the brewer’s “Middle Americas” and EMEA divisions was offset by declines in North America, South America and Asia Pacific.

AB InBev reported a “normalised” EBIT of $3.64bn, which amounted to a 5% rise organically.

Profit attributable to equity holders stood at $1.09bn, against $1.64bn in the third quarter of 2022.

China soft but premiumisation continuing

In China, AB InBev reported a 2.7% decline in revenue but noted its revenue per hectolitre was up 3.7% Volumes in China fell by 6.2%.

Nevertheless, Doukeris said: “We continue to see premiumisation as a very long-term trend for China. As you look at the brands that are growing and where these brands are growing in terms of channels and regions. We don’t see a big change. We see that this premiumisation should continue to thrive to drive expansion.”

Doukeris noted that the macro economy in China is “soft” with “adverse” weather conditions in March, factors that weighed on volumes.

However, he added: “I think that the long-term fundamentals is still in place: industry is premiumising, premium beers are growing, the profit pool should be expanding.”

Trevor Stirling, an analyst covering AB InBev at AllianceBernstein, said: “Results were better than expected. Volumes were flattish despite the last quarter of major US headwinds, while price-mix was decent and revenue up 2.6%.

“Q1 was the last quarter of difficult Bud Light comps (the backlash started in April 2023). In the US, the data is indicating strong share performance for Michelob Ultra and Busch Light, especially into Q2.