London. Two of the biggest brewers, Anheuser-Busch InBev and Carlsberg, sold less than expected in the third quarter as consumers, especially in China, cut back on spending, drinking less or choosing cheaper beers.
The profits and revenues of global leader AB InBev – which manages brands such as Corona and Victoria, among others – did not meet analyst expectations, causing its shares to fall almost 4 percent, despite the announcement of a buyback. of shares of 2 billion dollars and an increase in the forecasts.
Its volumes and revenues fell by double digits in China, while other major territories, such as the United States, Mexico and Europe, also saw sales declines.
AB InBev cited weaker consumer demand and noted that sales at bars and restaurants in China were especially weak.
Brewers had anticipated a rebound in margins and volumes this year, but a sluggish economy and high interest rates and inflation have held back consumers. Adverse weather and competition from cheaper local rivals have compounded the impact.
Corona’s preference boosts AB InBev
AB InBev’s third-quarter statement highlighted the stronger growth of its more expensive beers, such as Corona, which grew 10.2 percent outside its home market, Mexico, during the period.
However, in China, where AB InBev’s strategy focuses on its premium portfolio, revenue and volumes fell 16.1 percent and 14.2 percent respectively. In his opinion, this strategy “continues to be an attractive value creation opportunity.”
For some, the third-quarter results in China raise questions for the maker of Budweiser and Stella Artois, especially since rival Heineken, the world’s second-largest beer maker, said it had posted significantly better results there.
“Have they got the price wrong?” asked Siphelele Mdudu, an investment analyst at Matrix Fund Managers, an investor in AB InBev, who added that if companies push too hard on prices or premium beers when drinkers have problems, their Customers can look elsewhere.
This may force brewers to reconsider the balance between more expensive and cheaper beers in their portfolios, he said.
Heineken sales increase 0.7% in the quarter
Heineken’s volumes rose 0.7 percent in the quarter, but also pointed to a difficult consumer environment and sharp declines in markets such as Cambodia, due to competition from cheaper local brands.
The world’s third-largest brewer, Carlsberg, which makes beers such as Kronenbourg 1664 and Tuborg as well as its namesake brand, posted a 1.3 percent drop in volumes, citing factors such as a “very weak” consumer in China.
Chief Executive Jacob Aarup-Andersen told Reuters that in the short term, the company will adjust a strategy brewers have relied on for years: developing and promoting more expensive brands, marketed as premium beers, to offset falling prices. volumes.
“In markets where we see significant pressure on premium beers, we are reallocating some of our attention to ensuring we are properly promoting the right mainstream brands,” he said.
In the long term, Aarup-Andersen was confident that more expensive beers will represent a much larger part of Carlsberg’s portfolio within a decade.
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