AB InBev, the world’s largest brewer, saw a 2.6% revenue increase year-on-year, reaching $14.55 billion in the first quarter. This increase was despite a 0.6% drop in volumes sold. Additionally, underlying profit attributable to shareholders rose to $1.5 billion, surpassing analyst estimates. The company’s performance in the first quarter was deemed impressive, especially considering the challenges it faced from a boycott of its Bud Light brand.
A social media-led campaign against Bud Light, triggered by a sponsorship partnership with transgender influencer Dylan Mulvaney, put the brand in the spotlight. This boycott caused a decline in sales volume, ultimately affecting the brand’s status as the best-selling U.S. beer. Despite this setback, AB InBev managed to weather the storm and mitigate the negative impact on its overall revenue and profit. Former U.S. President Donald Trump even called for a “second chance” for the company, highlighting the controversial nature of the situation.
While AB InBev faced challenges in North America, with a significant drop in sales of its own beer brands mainly attributed to Bud Light, the company experienced growth in other regions. Sales were at record highs in Brazil and Colombia, and there was strong performance in Europe, Mexico, and South Africa. Additionally, the Asia-Pacific and Central America regions saw higher sales, contributing to a 7.8% revenue increase for the company in the previous year. This diversification of global footprint helped offset losses in other markets.
Outlook and Future Plans
Despite the challenges faced in the first quarter, AB InBev remains optimistic about its future performance. The company reiterated its medium-term outlook for earnings before interest, taxes, depreciation, and amortization (EBITDA) of 4% to 8%. CEO Michel Doukeris expressed confidence in the beer category’s strength, the global reach of AB InBev’s brands, and the continued momentum of its megabrands. Analysts also viewed the first-quarter results positively, describing them as a “solid print at the start of the year.”
AB InBev’s ability to navigate through the challenges posed by the Bud Light boycott and other market fluctuations demonstrates its resilience and adaptability as a leading player in the brewing industry. With a focus on strategic growth initiatives and maintaining consumer trust, the company is well-positioned to sustain its success in the long run.
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