AB InBev: ‘Our fundamental strengths position us favorably for a strong recovery’

By Rachel Arthur contact

- Last updated on GMT

Pic:getty/davirzo
Pic:getty/davirzo

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A portfolio of brands across styles and price points stands the company in good stead for 2021 and beyond, says AB InBev, as it releases its FY2020 results today.

Volumes for the world’s largest brewer declined 5.7% in 2020, primarily as a result of the pandemic, although Q4 saw an upwards trend, with 1.6% growth. Revenue declined 3.7% in FY2020, with 4.5% growth in Q4.

Consumers rapidly adjusted to the new reality [in 2020] by shifting to in-home consumption occasions, increasing adoption of the e-commerce channel and finding new ways to connect with others, reinforcing our confidence in the long-term potential of the beer category,”​ says AB InBev.

“Our teams quickly responded to the evolving environment, allowing us to deliver beer volume growth of 2.2% in 2H20, even while external conditions remained extremely unpredictable. This was driven by a customer- and consumer-centric approach that is supported by the long-term fundamental strengths of our business.”

This portfolio includes a premium sector, which had a challenging start to the year but finished with the High End Company growing revenue by 4.1% and global brands up 4.7% outside their home markets in the second half of 2020. We are leading the way in expanding the core plus segment in emerging and mature markets, with brands such as Modelo in Mexico and Michelob ULTRA in the US.”

And AB InBev is also building out its beyond beer portfolio, into spaces like hard seltzer and RTD cocktails, wines and spirits. This portfolio has now surpassed $1bn in revenue and grew double-digits in 2020.

Looking forward, AB InBev says it expects top and bottom line results in FY21 to improve meaningfully compared to FY20.

“While the future remains uncertain, our fundamental strengths position us favorably for a strong recovery. We have a diverse geographic footprint, with operations in nearly 50 markets and sales in over 150 countries, and significant positions in high-growth regions. A clear commercial strategy gives us the tools to lead and grow the global beer category and scale best practices across markets. We hold the world’s most valuable portfolio of beer brands, enabling us to reach more consumers on more occasions. Our profitability is industry-leading, allowing us to weather times of extreme disruption. Investments in capabilities such as B2B sales, e-commerce and digital marketing put us in an advantaged position to capture growth from these accelerating trends.”

Innovation revenue up in 2020, despite pandemic

For a number of companies, the pandemic has been about stripping back portfolios to concentrate on core, trusted brands.

While core brands saw volume growth in the second half of 2020 – ‘demonstrating consumer trust in our portfolio’ – AB InBev also champions a parallel innovation push.

These have included big bet Bud Light Seltzer,​ a 5% ABV seltzer which was launched in January last year, alongside other innovations in the hard seltzer category. While AB InBev’s competitors have also been driving into the space, the company says “our portfolio of seltzers grew at double the rate of the industry, driven by a successful launch of Bud Light Seltzer.”

Meanwhile, local innovations have also had an impact: such as with Brazil’s Brahma Duplo Malte and a government collaboration with farmers and small businesses with Nuestra Siembra in Ecuador.

“Our innovations contributed more than $5bn to our global revenue in 2020, an increase from 2019 even in the face of tremendous disruption,"​ says AB InBev. "Our innovation pipeline included successful launches such as Brahma Duplo Malte in Brazil, Bud Light Seltzer in the US and Nuestra Siembra in Ecuador.​ We have been evolving our innovation strategy to deliver superior products to consumers with increased speed and agility, which has proven especially critical in the current environment.”

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