AB-InBev’s first half: Bud Light boycott takes fizz out of brewer’s earnings

Belgium | Bud Light’s parent company confirmed big losses in US sales and profits from this spring’s boycott and backlash, but executives now assert that the drain has been stabilised.

AB-InBev said on 3 August that Bud Light’s US sales through retail stores have fallen by 25 percent or more since April. As a result, it lost USD 395 million in North American revenue in the second quarter. The brewer’s revenue in the US dipped 10.5 percent compared to last year, with EBITDA down 28.2 percent in the country “primarily due to the volume decline of Bud Light”.

Other markets somewhat offset US losses

The US is the biggest market for the brewer. Bud Light's popularity here had been on a long and slow decline, but the spring boycott saw the brand lose its top-seller spot to Constellation Brands’ Modelo Especial beer.

On 1 August, another rival, Molson Coors, released its best quarter depletion figures since 2008. Its CEO, Gavin Hattersley, commented: “We didn’t plan on our largest competitor’s largest brand declining volume by nearly 30 percent during the quarter,” and added that without steps in recent years to streamline systems and invest in facilities, Molson Coors might have struggled to meet that unexpected jump in demand.

Half year results

AB-InBev reported growing sales elsewhere in the world, which somewhat offset its US losses. Executives also said costs came from big new spending on US marketing and deals with distributors to rebuild its American presence.

In the first half of 2023, total volumes declined by 0.3 percent to 288 million hl, with own beer volumes down 0.8 percent to 250 million hl and non-beer volumes up 2.1 percent to 36 million hl.

Revenues in the first half were up 10 percent to USD 29.3 billion, with revenue per hl growth of 10.6 percent.

Normalised EBITDA increased by 9.1 percent to USD 9.7 billion in the first six months, but margin contracted slightly to 33 percent, due to a one-off impact of tax credits in Brazil.

Full-year 2023 outlook

AB-InBev expects EBITDA to grow in line with its medium-term outlook of between 4 percent and 8 percent, although its revenue is expected to grow ahead of EBITDA from a combination of volume and price.

This contrasts with Heineken, which reported worse than expected half year results on 31 July and cut its 2023 forecast after a slowdown in Vietnam and price hikes that squeezed volumes.