Brewer AB InBev rebounds in second half of 2020

Chief executive of AB InBev, Carlos Brito, said that while the first half of 2020 was “extremely challenging”, the world’s largest brewer was able to pivot and deliver volume growth in the third and fourth quarters.

Announcing the group’s full year results last week, Brito revealed that overall revenue was down 3.7% to US$46.8bn and volume sales declined by 5.7%.

However, there were signs of improvement in the second half of the year. While volume sales of the brewer’s beer and non-beer portfolio decreased by 13.4% in the first half of the year, in the third and fourth quarters, sales grew by 1.8%.

It was a similar story for revenue which fell by 12% in the second half, but increased by 4.4% in the second half.

Brito described AB InBev’s fourth quarter performance as “strong”, but said the results had been “substantially impacted by the Covid-19 pandemic”.

In 2020, volume sales declined in all markets apart from South America, with a strong performance in the Brazilian market in the second half of the year.

AB InBev’s global beer portfolio grew by 4.2% in revenue in the second half of 2020. Brito said Budweiser, Stella Artois and Corona were three of the top five most valuable beer brands in the world and together generated over US$10bn in revenue sales in 2020, representing more than 20% of the group’s total takings.

However, the drinks giant is also investing large sums in the development of its non-beer portfolio, specifically hard seltzers. In the US, which Brito describes as the “largest beyond beer market in the world”, the group’s seltzer portfolio grew at double the average rate of the industry, driven by the launch of the Bud Light Seltzer range. AB InBev’s beyond beer portfolio, which also includes RTD drinks, grew by over 25% in the US last year, which the company attributes to “successful innovations in the Mike’s Hard brand family and the expansion of the hard seltzer category”.

Brito added: “We finished the year with good momentum with consistent execution of our commercial strategy.”

He said he expected earnings to “improve meaningfully” in 2021, with recent investment in digital sales platforms Bees and Ze Delivery.