Announcing its FY 2014 results today, AB InBev said examples included its advice that consumers drink Leffe as an aperitif with food, its work on beer-based drinks to attract consumers from outside the category and its Rita RTDs, which have proven popular with US women since their 2012 launch.
Other innovations from the world’s largest brewer include the Stella Artois Cidre launch in the US from May 2013, its expansion of Shock Top and national roll-out of Goose Island (after ABI bought the Chicago brewer carrying that name in 2011) to tap the craft beer trend.
ABI’s books show that year-on-year revenue grew 3.3% on an organic basis to $43.195bn in 2013, while normalized profit rose for the year rose 10.2% to $7.936bn.
ABI purrs over top beer profit pools
Glossing the figures, ABI said its recent purchase of Oriental Brewery for $5.8bn and its takeover of Grupo Modelo underlined its focus on the world’s most significant beer profit pools.
The brewer said its four top markets – US, Brazil, China and Mexico – account for almost half of world beer volumes.
“Developing markets represented 64% of our beer volumes in 2013, and the potential for greater contributions from these regions is an important driver of future value creation for AB InBev,” the firm said.
Discussing its January 2014 agreement to reacquire Oriental Brewery (OB) – which it hopes will pass regulatory hurdles in H1 – AB InBev said its top brands Cass (South Korea’s No.1 beer), OB Golden Lager and Cafri were major portfolio additions.
“South Korea is an attractive beer market, with a strong domestic growth outlook and rising demand for premium beer brands,” the firm said.
“We are excited by the opportunity to continue to grow the OB brands in both domestic and export markets, while expanding distribution in South Korea of AB InBev brands such as Budweiser, Corona and Hoegaarden,” it added.
Taking US beer upmarket
Aside from Asia where beer volumes rose 9%, ABI faced declines elsewhere – North America (-2.7%), Mexico (2.9%), Latin America (3.3%) Western Europe (4.3%) and Central & Eastern Europe (15.8%).
That said, in territories such as the US, ABI is re-rigging its portfolio with a “mix shift towards the high end where we under-index versus the industry”; the firm said this contributed to a market share loss of circa. 0.5% in 2013, with Budweiser and Bud Light each losing circa. 15bps of share.
“We saw good market share growth in our above premium brands during the year, based on our estimates, with Budweiser Black Crown gaining approximately 20bps of share and the Ritas family gaining over 50 bps of share,” ABI said.
“Michelob Ultra, [Belgian-style wheat ale] Shock Top, Stella Artois and our other high-end brands also added over 20bps of share, by our estimates,” it added.