- AB InBev had a profit increase of 13.6% in the first quarter of 2023 thanks to its premium product and pricing strategy.
- Its turnover grew by 13.2% due to the increase in prices and the increase in the sale of non-alcoholic beer.
- The company has been resilient in ongoing inflationary contexts, and its competitor, Molson Coors, also reported similar results.
The world’s largest beer company, AB InBev, reported that its profits increased 13.6 percent in the first quarter of 2023 compared to the same period in 2022.
The increase, which led it to earn 4,760 million dollars, was produced thanks to the fact that consumption was not affected despite the crisis and the strategy of increasing prices and directing consumers towards premium products.
AB InBev’s year-on-year profit growth is also much higher than the company’s estimate (5.6 percent).
Billing, for its part, grew by 13.2 percent in the same comparison between the years. Between January and March 2023, AB InBev brought in $14.2 billion, more than the $14.1 billion estimated by Refinitiv.
The explanation for the notable growth in revenues and profits of AB InBev are due to what the firm describes in the financial report as “price actions” since it pushed customers towards its premium products, since sales volumes grew just 0.9 percent in the period.
According to the report, AB InBev’s cross-brand beer volume increased 0.4 percent and other products 3.6 percent.
Billing from the sale of non-alcoholic beer grew 30 percent in the quarter.
AB InBev has under its umbrella brands such as Budweiser, Skol, Paceña, Brahma, Beck’s, Corona, Modelo, Quilmes and Stella Artois, among many others.
The company also reported that sales growth was especially outside the United States, driven by the return of consumer demand in China and non-stop growth in India.
In fact, In Asia, the consumption of Ab InBev brands grew 8.8%, offsetting falls of between 0.5 and 1.8 percent in the rest of the markets.
“The performance of the beer industry has improved in the first quarter, demonstrating resilience even in continuous inflationary contexts,” the firm said.
In early May, AB InBev competitor Molson Coors reported similar revenue and profit results compared to a year ago: it beat profit forecasts as consumers continued to buy its products despite rising prices.
full report of AB InBev Q12023.
Budweiser and a pricing strategy common to other brands
At the end of April, Coca-Cola’s financial report showed characteristics similar to those of AB InBev.
Indeed, the Atlanta company’s organic revenues, which are those that exclude the impact of purchases and divestments, grew 12% in the January-March 2023 quarter, “Driven to a greater extent by the higher price of Coca-Cola beverages,” we inform in Merca2.0.
As most companies that sell consumer products have done, Coca-Cola raised prices (like Budweiser) to mitigate the impact of inflation.
However, this increase had a moderate effect on the demand for its beverages, so profits grew.
Now read:
KFC, Pizza Hut and Taco Bell sales improve
Shares of this company plummet after admitting to the threat of ChatGPT
Intel scored the worst quarterly drop in its history: what happens in the giant
