AB-InBev’s beer volumes up in 2011

How did AB-InBev manage to raise its beer sales in Germany by 5.2 percent in 2011 while the overall beer market declined by almost 1 percent? Obviously by heavy discounting. According to estimates by GfK, a market research firm, Germany’s national pils brands, Beck’s among them, sold over two thirds of their volume on promotion last year. That’s usually at a price below EUR 10 for 10 litres or at a 30 percent discount.

Promotions were heaviest in the run-up to Christmas, which is why AB-InBev’s volume sales in the fourth quarter were up 7.9 percent.

AB-InBev reported that its major brands in Germany saw significant increases. Beck’s sales rose by more than 4.0 percent, while Franziskaner wheat beer and the fighting brand Hasseröder both registered a plus of 10.3 percent.

"2011 was one of the best financial years for a long time – we recorded the second highest market share since we entered the market in Germany in 2001," AB-InBev’s Managing Director Germany, Chris Cools, boasted.

As all sales people know: once you downprice your brands it’s easy to increase volumes and market share. Let’s only hope that the initial profit losses will be more than compensated for by the higher volumes.

At a recent sales conference (March 2012) Mr Cools announced the launch of two brand extensions. As of May this year there will be a ginger version of Beck’s called Beck’s Asia and a reddish version of Hasseröder called Fürstenbräu Granat.

Mr Cools has high hopes for his unit. Its share of the German market is expected to rise to 10 percent by the end of this year from currently 8.7 percent. That would imply a volume increase of about 600,000 hl, according to estimates by Dr Kai Kelch, a market researcher for BRAUWELT.

This can only mean: more cheap Beck’s and Hasseröder.