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AB InBev’s chief dismisses the idea that beer is losing to the spirits

CEO of the world’s largest brewery, Anheiser Bush InBev, dismisses the proposal that beer is losing to the spirits, saying “it’s time for people to tell the right story” about the popularity of beer. Did.

“Beer is big, beer is profitable, and beer is growing,” said Michelle Duqueris, who was in charge of the group behind Budweiser, Stella Artois and Corona this year. “Too long there [have been] People who say the opposite without displaying the data. “

His comment on the Financial Times is as AB InBev, formed through a series of acquisitions of SABMiller for £ 79 billion in 2016, announcing organic growth goals this week.

The Belgium-based company is trying to show that it can repay debt by accelerating growth beyond the acquisition and cost-cutting strategies pursued by former chief Carlos Brito.

Duqueris, who took over from Brito in July, said drinkers will switch to more expensive beer brands, boost sales of other products, including ready-to-drink cocktails, and exposure to emerging markets will drive AB InBev’s growth. rice field.

The company said this week it aims to improve interest, taxes, depreciation and pre-amortization organic profits by 4-8% in the “medium term.”

CEOs are trying to counter investors’ perception that drinkers increasingly prefer spirits to beer, especially as home cocktail making has become a pandemic.

AB InBev shares have lost almost 30% of their value since the beginning of 2020. In contrast, shares in Diageo, one of the world’s largest distilleries, have recovered by more than 25%.

According to Euromonitor, spirits accounted for 35% of the world’s alcohol consumption in 2020, up from 32% in 2007. Beer decreased slightly from 43% to 42% over the same period. However, data companies predict that beer will grow faster than spirits between now and 2025.

Jeffreys analyst Ed Mandy said the spirits gained a “throat share” primarily from wine, but their dynamics vary widely from country to country.

Beer consumption has been declining in the United States and Japan, but has shown strong growth since 2010 in Colombia, Chile and Bangladesh.

In these regions, beer is not distilled by international groups such as Diageo and Pernod Ricard, but gains market share, especially from locally produced spirits, Mandy said. “Beer is winning in emerging markets,” he said.

Doukeris has strengthened AB InBev’s core drink defenses by moving into so-called “beer-beer” categories, such as hard selzer and ready-to-drink cocktails, which are expected to grow in popularity rapidly.

Still, Duqueris added: “The first and most important part of our growth story is the category we lead today: beer.”

He said consumers had a great opportunity to trade in fine beer. “Of the CPG [consumer packaged groups] It’s the place with the lowest level of premiumization, “he said.

Doukeris said AB InBev, with its roots in Latin American regional brewing, is “in a good position” overall, especially given its position in emerging markets.

The stock rose 4.6% from the beginning of the week to € 52.31 after Investor Day.

AB InBev’s chief dismisses the idea that beer is losing to the spirits

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