Sector News

AB InBev’s volumes fall 9.3% in Q1, expects bigger Q2 hit

May 7, 2020
Food & Drink

AB InBev has reported that its global volume sales declined 9.3% in its first-quarter results, however April figures suggest that Covid-19 impact will be greater in its second quarter.

Growth of AB InBev’s three global brands – Budweiser, Stella Artois and Corona – across the majority of its markets was more than offset by declines in China, which is the largest market for both Budweiser and Corona outside of their home markets.

Excluding China, volumes declined by 3.6%, despite initial growth of 1.9% in January and February. The firm said that the impact of Covid-19 on its results increased significantly towards the end of the quarter due to shortfall from lost sales from bars and restaurants.

However, the Belgium-based company expects a “materially worse” second quarter, as its April global volumes already witnessed a decline of approximately 32% due to the closure of the on-premise channel in most markets.

The world’s largest brewer recorded a 5.8% drop in revenue to $11 billion compared to last year’s $12.2 billion. Meanwhile, gross operating profit (EBITDA) was worse than the company predicted in its last quarter and fell 13.7% to $3.95 billion.

In the US, the firm’s largest market, revenue grew by 1.9% driven by its top 10 brands and above core portfolio. However, overall market share was lost as the trend for hard seltzer’s accelerated but the company is pushing more into this category with the entry of Bud Light Seltzer.

In the US, Canada and Western Europe, AB InBev has benefitted from an increase in retail sales as the off-premise channel represents the majority of the firm’s sales. Meanwhile, in Brazil and Colombia, the brewer witnessed significant impact to its volumes due to the relevance of the on-premise channel which is predominantly closed.

In markets such as Mexico, South Africa and Peru, brewery operations have been severely restricted however the company’s Corona brand led the way with growth.

AB InBev’s China market has been showing improvements with volumes declining approximately 17% in April compared to a decline of 46.5% in its first quarter.

The firm said they will best practices from its experiences in China and South Korea – which are showing early signs of recovery – to the rest of its markets, as restaurants and bars began re-opening from mid-March.

The company’s first-quarter results coincide with the Foreign Investment Review Board’s approval of Asahi’s acquisition of AB InBev’s Australian subsidiary Carlton and United Breweries (CUB). This marks the closing of the regulatory review process and enables the completion of the transaction to go forward on 1 June.

By: Emma Upshell

Source: Food Ingredients First

comments closed

Related News

May 27, 2023

Adventure and novelty identified as 2023 flavor trends

Food & Drink

Kerry’s 2023 flavor insights report reveals the latest foodservice flavor trends consumers are seeking, including new combinations of traditional tastes, indulgence, and younger consumers seeking unconventional mashups of food and beverages they grew up with in combination with emerging flavors from other regions.

May 27, 2023

Nestle names new head of operations

Food & Drink

Stephanie Pullings Hart has been named deputy head of operations at Nestle SA, effective July 1. She will succeed Magdi Batato, who is set to retire after a 30-plus-year career at Nestle. Ms. Pullings Hart is currently senior vice president of operations at Warby Parker, where she is responsible for manufacturing, supply chain and customer experience.

May 27, 2023

Givaudan harnesses AI to develop “futurescaping platform” to forecast future food

Food & Drink

Customer Foresight can identify early indications about impending future shifts that will impact the food and beverage industry. According to Givaudan, it is designed to support customers in understanding, planning for and addressing disruptive changes in consumer desires, guiding strategic planning, and leading to co-creation opportunities.

How can we help you?

We're easy to reach