Beyond beer: AB InBev develops global play in hard seltzers, RTD cocktails and more
While the company declares itself ‘first and foremost a brewer’ (beyond beer still only accounts for a drop of the company’s overall revenues), it pledges to keep up with consumer trends across the industry. Its Beyond Beer roster includes hard seltzers, canned wine, canned cocktails and more.
In the US - the stronghold for this category at the moment - this means alcohol brands such as Babe wine, Bon Viv hard seltzer, Cutwater Spirits, Nutrl vodka seltzer, Kombrewcha and Ritas RTD cocktails.
“In the US, we continue to see this beyond beer [category] growing. The first quarter [2022] was not different. We saw growth there,” said Michel Doukeris, CEO, speaking in the company’s Q1 earnings call this month.
“And one of the most important and attractive points of that for us is that it's really driving share of throat toward this ready-to-drink beverage. And our capabilities from route to market, production capacity, ability to introduce innovation in new brands, makes us well-positioned and optimistic to continue to drive growth in this area.”
From Flying Fish to Corona Tropical
AB InBev’s global Beyond Beer business grew by more than 20% in FY2021, contributing $1.6bn of revenue last year. The business has continued strong in Q1, 2022: posting more than $350m in the quarter.
Growing the Beyond Beer portfolio globally is a two-pronged approach: firstly, expanding big-hitters into global markets, but the real key - emphasizes Doukeris - knowing when different markets need different products.
So far this year, for example, Nutrl hard seltzer has expanded from Canada into the US, taking advantage of similar market dynamics. Mike’s Hard portfolio, meanwhile, has expanded to reach 10 global markets.
And Corona has focused the launch of Corona Tropical (4.2-4.5% ABV sparkling juice based RTD) in Latin America and the UK: with the brand equity of Corona giving it global potential.
South Africa, however, shows how local products - in this case spritzer Brutal Fruit and hard seltzer Flying Fish, which are both growing double digit - can drive local growth.
"South Africa is an outstanding example of our core products performing very well and our ability to expand to more occasions driven by the beyond beer expansion," noted Doukeris. "Brutal Fruit, Flying Fish are performing very, very well in South Africa."
While Doukeris emphasises that different markets need different products, he says the company can still translate the knowledge it’s build up in the US and other core markets to apply to a global expansion in the category.
Furthermore, these products offer opportunities for premiumization and for driving growth.
“Our capabilities and how we are positioned globally to really take advantage of this consumer trend and this opportunity makes us feel very good. I'm very optimistic about that because, again, we have the brands.
“We have the knowledge from the developed markets. We have the innovation and the liquid capacity. We have distribution, and we can take advantage and really lead this expansion lever globally.”
