AB InBev’s year was dominated by its takeover of rival SABMiller, completed in October, making what AB InBev champions as ‘the first truly global brewer’. It now has a portfolio of more than 500 beers, including seven of the top 10 global beer brands, and 18 brands that generate more than $1bn in retail sales.
“We are building on the strengths of both companies and anticipate that the result will be transformative,” says AB InBev. “We expect the combination to generate significant growth opportunities… we now have operations in virtually every major beer market.
“We have strengthened our position in developing regions, with excellent growth prospects in Asia, Central and South America, and Africa, which will play a key role in our company going forward.”
AB InBev, which is the world’s largest brewer, reports that the ‘integration process is well under way’.
Thanks to the joint innovation capabilities, AB InBev says it will be able to introduce exciting new products and “has access to some of the world’s most important sports, music and other marketing properties, such as the FIFA World Cup, the NFL and prominent global music festivals, providing key opportunities to deepen consumer connections.”
Brazil: a challenging environment
AB InBev saw total revenue grow by 2.4% in FY16, while total volumes declined 2%.
Results were impacted by a ‘challenging environment’ in Brazil, with beer volumes down in the country.
“Many initiatives, including premiumization and the growth of returnable glass bottles in the off trade, have been well received, but Brazil beer volumes were down, revenues suffered and costs of sales rose compared with FY15 due to devaluation of the Brazilian Real. Excluding Brazil, net revenues increased by 4.0% in FY16,” said the company in a statement this morning.
But AB InBev adds it has a long-term commitment to the country.
“Our outlook on Brazil remains positive. We have been operating in the country for almost 30 years and understand that its long-term growth trajectory comes with inevitable periods of volatility.
“Favorable demographics, the closing of regional disparities in per capita incomes and consumer demand for innovative and premium products should help drive long-term growth. What’s more, we believe in taking advantage of the opportunities that arise in challenging environments.”
Revenue: Revenue grew by 2.4%, with revenue per hl growth of 4.5%.
Volume: Total volumes declined by 2%, with own beer volumes down 1.4% and non-beer volumes down 6.2%.
Big brands: Combined revenues of the 3 global brands, Budweiser, Stella Artois & Corona, grew by 6.5%.
US: full year revenue was flat with lower volumes offset by revenue per hl growth
Mexico: strong volume growth thanks to investment in core brands and expansion in the north.
China: AB InBev volumes contracted by 1.2% against a backdrop of total industry volume decline of 3.8%. Core plus, premium and super premium brands now account for more than 55% of AB InBev’s total China volumes.
South Africa: beer volumes down 5%
Western Europe: total volumes grew by low single digits
Eastern Europe: total volumes declined by high single digits.
Australia: AB InBev has become the market leader in the country as a result of the merger with SABMiller. It has also taken over distribution rights for Budweiser, Stella Artois and Corona as part of the merger.