Anheuser-Busch InBev reports first quarter 2013 results, volume decline in American markets

Anheuser-Busch InBev (AB InBev) is still the largest brewing roll-up in the world, especially now that it has been approved by the Department of Justice to buy the parts of Grupo Modelo that it does not already own. In the first quarter of 2013, the company has continued to grow worldwide, but its volumes were down. Total revenues grew 1.5 percent in 1Q 2013, with strong revenue per hectoliter (hl) growth of 5.8 percent, due to its “revenue management initiatives and the premiumization of our brand portfolio in our key markets.”

Yet the company lost a step in the Americas. The company noted that its Michelob Ultra and high-end brands, led by Stella Artois, Shock Top and Goose Island, gained share in the quarter, but that in the United States, its sales-to-wholesalers (STWs) declined by 5.2 percent, and its domestic U.S. beer selling-day adjusted sales-to-retailers (STRs) declined by 4.1 percent. According to the press release, it didn’t have much to do with craft breweries stealing market share:

We estimate that STRs declined by 3 percent. As anticipated, underlying STR performance in the quarter was impacted by short term pressure on consumer disposable income, gas prices and a difficult weather comparable. STWs were also impacted by one less selling day compared to 1Q 2012. We estimate a 50 bps decline in market share in the quarter, based on STRs, primarily concentrated in the sub-premium segment, against a tough 1Q 2012 comparable. We saw strong performances by Bud Light Lime Lime-A-Rita and the recently launched Bud Light Lime Strawber-Rita, and good growth in the high end, led by Stella Artois, Shock Top and Goose Island.

The premium plus category also gained share driven by Budweiser Black Crown and Michelob Ultra. Bud Light family market share was marginally down versus 1Q 2012 as we cycle the strong Bud Light Platinum launch volumes of 1Q 2012, while the Budweiser family, including Budweiser Black Crown, was essentially flat. These performances were offset by share losses for our sub-premium brands, due to the pressure on disposable income and our strategy of narrowing the price gap between our premium and sub-premium brands.

U.S. beer-only revenue per hl grew 4 percent with a continued benefit from the price increase taken in 4Q 2012. This growth also includes a brand mix contribution of approximately 150 bps driven by innovations launched in both FY 2012 and 1Q 2013, and growth of our high-end brands. In Canada, our beer volumes in 1Q 2013 declined by 2.9 percent, due to an excise tax increase in Quebec in 4Q 2012 as well as cold weather in Ontario and the Atlantic provinces. Market share was down slightly in the quarter although there was a strong performance by the Bud Light family, with growth in both share and volume following the successful launch of Bud Light Platinum.