The world’s largest beer company raised the bar on Thursday, reporting that its latest quarter was a veritable financial happy hour.
But growth at AB InBev, best known for Budweiser, is now being driven by premium brands that are more regal than even “The King of Beers.”
Stella Stars as Bud
Budweiser is coming out of a challenging few years, and not just because of the pandemic. American drinkers have gotten hip to smaller craft beer brands and diets that cut back on waist-expanding beverages. Beer accounted for 42.5% of US alcohol sales last year, down from 43.6% in 2020 and 49.8% in 2010, according to data purveyor Statista, in a continuing sign that the Homer Simpson demographic is shrinking.
But Thursday’s financials brought good news for AB InBev’s investors in the face of the changing tide:
- Organic sales at the world’s largest brewer grew 12.1% during the final three months of 2021, with the company’s premium and superpremium products like Stella Artois, Shock Top, and Goose Island driving growth to offset declining popularity in Bud and Bud Light. Premium brands made up a third of revenue, 2% more than in 2020.
- More recently, US beer volumes grew 30% in bars, restaurants, and recreational venues during the week leading to the Super Bowl, in line with a promising broader trend of people ponying up for a pint outside the house.
From Brews to BioTech: AB InBev has a fascinating if tiny new business line. Instead of giving away byproducts of its malt barley brewing, the company plans to begin turning them into plant-based proteins that can be sold to food companies. But it’s only expected to make $20 million in revenue next year, not even a drop in the metaphorical keg when compared to $57 billion in expected sales.