AB InBev, the brewer behind popular brands such as Castle Lager, Corona, and Stella Artois, has reported record third-quarter sales volumes in South Africa. However, the company's beer volume growth in the country remained below that of the wider industry. According to AB InBev, South African beer volumes grew at a low single-digit rate in the three months to September. This growth rate was lower than that of the overall industry.
In contrast to its overall beer volume growth, AB InBev's premium and super-premium beer volumes in South Africa rose sharply, increasing by a mid-30s rate. The company's premium and super-premium beers, which include brands positioned above mainstream beers at higher prices, gained market share during the quarter. This growth in premium beer sales contributed to an increase in revenue per hectolitre of beer sold.
AB InBev's revenue in South Africa increased at a high single-digit rate, driven by its pricing decisions and customers buying a greater share of premium products. The company's revenue per hectolitre rose at a mid-single-digit rate. According to CEO Michel Doukeris, the company's diversified footprint, best-in-class capabilities, and consistent execution of its strategy contributed to its solid growth.
South Africa was one of 15 markets where AB InBev recorded its highest third-quarter volumes. However, the company's overall volume growth in the country still fell short of the wider industry, according to its estimates. Globally, AB InBev's total volumes increased by 0.4% in the quarter, while beer volumes declined by 0.1%.
AB InBev's global revenue rose by 4.9% to $16.5bn, supported by higher revenue per hectolitre and growth in premium beer and other drinks. The company's Beyond Beer portfolio, which includes drinks outside traditional beer, grew by 19%. Revenue from non-alcoholic beer increased by 35% worldwide.
Despite its solid growth, AB InBev's operating margin fell to 36.1% from 37% a year earlier. The company attributed this decline to higher commodity costs and increased spending on sales and marketing. However, these pressures were partly offset by tighter control of overhead costs.
AB InBev's earnings before interest, tax, depreciation, and amortisation (ebitda), a measure of operating performance, rose by 3.9%. According to Doukeris, the company's portfolio of megabrands and mega-platforms continues to win with consumers, reflecting the strength of its diversified footprint and best-in-class capabilities.
Key points
- AB InBev's premium and super-premium beer volumes in South Africa rose sharply, increasing by a mid-30s rate.
- The company's revenue per hectolitre of beer sold rose at a mid-single-digit rate.
- AB InBev's global revenue rose by 4.9% to $16.5bn.
