15 Aug 2023 Carling & Corona sustain SAB momentum
SAB has reported sales growth of “mid-single digits” in the six months to end-June 2023, driven by strong consumer demand for its brands while volumes grew ahead of the industry, leading to an increase in global share.
The company is the local unit of brewing giant AB InBev, the world’s largest brewer.
“We continue to see strong consumer demand for our portfolio, gaining share of beer and total alcohol according to our estimates,” CEO Richard Rivett-Carnac said in a recent statement.
“Carling Black Label is the No 1 beer brand in the country and led our performance this quarter with high teens volume growth,” he said.
AB InBev said “pricing actions, ongoing premiumisation and other revenue management initiatives saw revenue increase more than 10% per hectolitre (100l) despite “anticipated commodity cost headwinds”.
The group doesn’t provide a breakdown of sales by country. SA is included in its Europe, Middle East and Africa (EMEA) operations. EMEA total volumes decreased by 0.5%. Still total group revenue rose 7.2% and earnings before interest, tax, depreciation and amortisation 5%.
Rivett-Carnac, who has been at the helm of the group’s local operations since January 2022, said SAB’s global brands volumes rose more than 50%, “driven by Corona”.
With a diverse portfolio of more than 500 beer brands including Budweiser and Stella Artois, Belgium-based AB InBev has a market capitalisation of more than R1.8-trillion on the JSE, where it has its secondary listing.
However, it said global momentum was offset partially by US revenue falling due primarily to lower sales of Bud Light.
US revenue fell 10.5% in the second quarter as sales to wholesalers were down 15% and sales to retailers 14%, underperforming the industry.
Bud Light, once a favourite beer in the US, has been boycotted by conservatives and right-wingers for sponsoring transgender influencer and actor Dylan Mulvaney, who promoted the beer on Instagram.
More local procurement
Locally, SAB has intensified its local procurement push. Four years ago it partnered with Kwande Capital — the first black industrialists in the glass industry — to acquire iSanti Glass for R1.5bn from Nampak, as part of a bid to use the strength of its procurement to transform industries.
The deal included a 10-year offtake agreement for SAB to buy all of the glass made available to it through the facility.
Now as bottle demand rises, iSanti Glass says it plans to build a R3bn furnace in the next two years, from which SAB stands to benefit.
In April at the SA Investment Conference (SAIC), SAB announced a R5.8bn investment commitment to support President Cyril Ramaphosa’s investment drive in addition to the R11.7bn it invested in the two prior years.
AB InBev’s share price at R1,047.69 on Aug 4, but it is up more than 17% in the past year.