AB InBev seeks growth, not takeovers

Acquisitions are “no longer our number one top priority”, reveals AB InBev CEO, with the head of the drinks giant vowing to focus on growth of the existing business.

After a difficult 18 months in which it felt a backlash from partnering with transgender influencer Dylan Mulvaney, Anheuser-Busch InBev’s CEO Michel Doukeris told a Yahoo Finance conference: “Today the business [Bud Light] is stable.”

However, research house Bump Williams says that that the US premium light beer category remains under pressure.

Its research shows the category — which includes Bud Light, Miller Lite, and Coors Light — suffering a 6% drop in revenues so far in 2024 with volumes 8% lower as
consumers continue to shift to spirits, hard seltzers, and non-alcoholic beers.

“We had a little bit of everything from people being threatened on the streets, a lot of things being told about the company,” Doukeris said. “At the end of the day, as things settle and the communication continues to flow, people really understand who we are — and who we are in the United States is a company that is here for over 100 years, based in the US, employing American people, sourcing most of the ingredients from American farmers … 20,000 employees that we employ directly in the US, over 50,000 if we include our wholesalers.”

He revealed that the US market accounts for almost a third of AB InBev’s revenues, the remainder coming from the other 49 countries in which it operates.

Since Covid the world’s biggest brewer has “reoriented our strategy from acquisitions to a more organic growth strategy”.

“One in four beers globally are one of our brands in one of [the] countries [we operate in]. There is much more for us to grow on the current footprint that we have,” Doukeris said, adding: “Our number one priority is organic growth”.

He didn’t discount future possible takeovers, though.

“You’re going to always find opportunities [for] returning more cash to shareholders or investing if you have a good opportunity with a good return on investment in bolt- on acquisitions in the category, [or] around the category. But [acquisitions] is no longer our number one priority;” he said.

Doukeris ‘strategy is to cut costs in the face of inflation plus moving into non-alcoholic beers such as Corona Cero and premium hard seltzer Nutrl.

While global total volumes fell 2.4% in the three months to the end of September, group sales rose 2.1% as AB InBev forced up prices. Operating profit margins
improved 169 basis points year over year to 36%. Earnings per share increased 14% from the prior year.

For 2024 as a whole, the company predicts operating profit will grow between 6% and 8%. It also announced a new $2 billion stock buyback plan to boost shareholder returns.

The shares have shed 3% over the past year compared with Wall Street’s rise of 37% as measured by the S&P500 index.

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