AB InBev beats revenue estimates as premium and non-beer sales offset declining beer demand

Anheuser-Busch InBev (AB InBev), the world’s largest brewer, delivered stronger-than-expected fourth-quarter revenue, defying concerns over declining global beer demand.

The company reported a 3.4% year-over-year revenue increase to $14.84 billion, surpassing analysts’ estimates of $14.05 billion.

Despite a 1.9% decline in total volumes, AB InBev’s premium and non-beer portfolio helped offset weaker beer sales.

For the full year, revenue rose 2.7% to $59.77 billion, above the expected $59.3 billion. However, volume declines in key markets such as China and Argentina weighed on overall sales.

AB InBev remains optimistic about a market recovery in 2025, though currency fluctuations and potential trade challenges pose risks.

Premiumization, product diversification drive AB InBev’s revenue

AB InBev’s revenue growth came despite a decline in total beer sales, as the company focused on higher-margin premium and non-beer products.

Demand for brands like Cutwater Spirits and Brutal Fruit Spritzer helped mitigate volume losses, reflecting a shift in consumer preferences toward ready-to-drink (RTD) beverages and spirits-based cocktails.

The company’s premium beer segment also performed well, with strong growth in key markets outside of China and Argentina.

Corona and Stella Artois continued to expand in premium categories, helping AB InBev navigate challenges in its traditional beer business.

This strategic focus on premiumization and diversification has allowed the brewer to increase revenue despite falling volumes, a trend that has been emerging across the industry as consumer drinking habits evolve.

AB InBev’s revenue: China and Argentina headwinds

While AB InBev’s revenue outperformed expectations, its overall 1.9% decline in Q4 volumes reflected weak consumer demand in China and Argentina.

The economic slowdown in China, coupled with strict pandemic-related restrictions early in the year, dampened sales in one of the company’s largest markets.

In Argentina, high inflation and economic instability led to reduced beer consumption, as consumers prioritized essential goods over discretionary spending.

This decline in demand contributed to a 1.4% drop in total volumes for the full year, making it a key challenge for AB InBev moving forward.

The company expects some recovery in these markets in 2025, though economic conditions and consumer sentiment remain key uncertainties in AB InBev’s outlook.

Currency fluctuations emerge as a key risk for 2025

While AB InBev has navigated market challenges successfully, the company sees foreign exchange (FX) fluctuations as a major concern for 2025.

The strength of the US dollar has pressured international revenues, particularly in emerging markets where local currencies have weakened significantly.

Despite ongoing geopolitical uncertainties, AB InBev downplayed concerns over potential US tariffs, stating that any trade-related impacts would be manageable through cost-cutting measures and pricing strategies.

Looking ahead, the company maintains its medium-term guidance of 4% to 8% EBITDA growth, with profitability expected to improve through a combination of price increases, premiumization, and operational efficiencies.

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