AB InBev's core beer brands boost revenues

07-May-2017 - Last updated on 08-May-2017 at 09:09 GMT

While most beer brands declined in Q1 2017, Michelob Ultra recorded its eight-straight quarter of share gains.

AB InBev’s three core global brands, Budweiser, Stella Artois, and Corona, collectively grew by more than 12% for Q1 2017, mainly driven by revenues outside of the US.

AB InBev's total revenue in the quarter grew by 3.7% to $12.92bn compared to $12.07bn for the first quarter of 2016.

“Budweiser continued to perform very well this quarter, supported by a powerful Chinese New Year campaign as well as Super Bowl activations introduced for the first time in international markets such as the UK and Brazil,” AB InBev CEO, Carlos Brito, said during the first quarter earnings call last week.

Stella Artois grew revenue by 20% which was supported by the brand’s Buy a Lady a Drink campaign partnership with Water.org aimed at ending the global water crisis, and brought in $12bn in PR impressions, according to the company.

“Corona continued its impressive track record of growth, with revenues up by over 18% and by almost 50% outside of Mexico, driven by China, the UK, and Colombia,” Brito said.

Mexico is an area that AB InBev intends to target by driving premiumization through the expansion of its beer brands including Budweiser, Michelob Ultra, Stella Artois, and the Modelo family.

“We’re connecting the Modelo family with new occasions to drive beer’s associations with food as well as building the celebration occasion through Stella Artois in the high-end,” added Brito.

Softening in North America

Sales volumes in North America declined by 4.4% for Q1 2017 with Budweiser and Bud Light suffering the largest declines. Bud Light dropped by 65 basis points per share and STRs (sales of retailers) declining mid-single digits.

The US saw revenue drop by 2.6%, but saw strong gains in Stella Artois, Michelob Ultra, and its regional craft beer portfolio.

The company hopes to turn around the performance of Bud Light with a new campaign called Famous Among Friends. AB InBev has also appointed Andy Goeler to lead the re-marketing of Bud Light, a brand that he worked on in the ‘90s. For the past few years, Goeler has been working on AB InBev’s The High End beer portfolio.

“We think this campaign has legs because it goes back to what made Bud Light the great brand that it is today,” Brito said. “I think we’re onto something that could start making sense. But so far, we’re still in a transition period.”

Michelob Ultra leads light beer portfolio

“In the core plus segment, Michelob Ultra remains on fire, with eight straight quarters as the first share gainer in the US market,” Brito said.

Michelob Ultra’s VP of marketing for Michelob Ultra, Azania Andrews, explained that the brand’s success hinges on its ability to capture an active physical consumer audience.

Andrews pointed to the acceleration of the Google search terms “active” and “exercise” which hit a peak in 2013, the same time Michelob Ultra’s sales hit a record year.

“Active is everywhere; it’s premium and it’s aspirational and it’s who we are as a brand,” Andrews said at The Beverage Forum.

“I think the reason that this trend is working well for us is because it’s what the brand has always stood for.”

Michelob Ultra has been the long-time sponsor of the PGA tour and more recently launched a free, dedicated skill on Amazon Alexa, called ULTRA 95, which taps into the voice recognition aspect of Alexa to deliver 12 customized fitness workouts to beer drinkers.

“We exist to celebrate the shared effort that goes into working hard and living a life that is balanced,” Andrews said.