AB InBev’s global beer brand focus secures strongest second quarter in over five years

Brewing giant AB InBev’s recent focus on its premium and global beer brands has helped to secure a boost in revenues in the first half of the year.

The company said its volume growth over the last three months has been its strongest in over five years.and has improved its profit margins on premium brands like Stella Artois, Corona and Budweiser. The other brands in its High End portfolio vary depending on where they’re sold.

AB InBev said profits rose 14% to US$2.47 billion between April and June, while beer volumes also grew 2.1% helped by “strong performance in key markets” such as Mexico, Brazil, Europe, South Africa, Nigeria, Australia and Colombia, as well as a later Easter.

However, its US volume sales shrank by 2.4% after the brewer brought forward its price hikes on beer to April, originally planned for October.

The group said premiumisation is still “a significant opportunity and a critical component of our strategy” in half year results posted today (25 July).

Overall, its global brand’s revenues rose by 8.0%, and performed better out of their home markets.

Budweiser, for example, grew by 5.6% outside of the US, while Corona was up 23.7% outside of Mexico.

Looking ahead to the end of the year, AB InBev said it be “will even more focused on category expansion, targeting a more balanced top-line growth between volume and revenue per hl.”

The brewer agreed to sell its Australian subsidiary Carlton & United Breweries to Japanese drinks giant Asahi earlier this month in a deal worth AU$16 billion. AB InBev said it expects the handover to be completed by the first quarter 2020. The proceeds from the deal will be used to pay off AB InBev’s debt from acquiring SABMiller in 2016.

It has made a number of acquisitions and investments already this year, including San Diego-based spirits company Cutwater Spirits and consumer review site RateBeer.

The company also decided not to go ahead with a planned US$9.8 billion initial public offering of its Asian business on 12 July. It was expected to be one of the largest public offerings of the year, but “market conditions” were not deemed favourable enough to go ahead with it.

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