After Heineken’s warning of softening demand, Budweiser Maker says beer demand remains resilient

AB InBev SA, the world’s largest brewer, said consumer appetite for beer remains resilient despite headwinds from higher prices, just a day after rival Heineken NV warned of softening demand. The maker of Budweiser and Stella Artois reported adjusted Ebitda growth of 6.5 per cent in the three months ending Sept. 30, topping analysts’ estimates, while raising the lower end of its annual profit growth forecast. “We continue to see strong consumer demand for our portfolio and a resilient beer category,” Michel Doukeris, AB InBev’s chief executive officer, said in a statement.

Beer and spirits makers have been raising prices to offset higher raw material costs, but there are signs drinkers are starting to balk. Shares of Heineken fell 5 per cent on Wednesday after the second-biggest brewer warned of slowing demand in Europe. Carlsberg lifted its profit forecast, but CEO Cees ‘t Hart said consumer sentiment is “weakening.”

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AB InBev, the main beer sponsor of the World Cup in Qatar in November, now sees annual Ebitda growth of 6 per cent to 8 per cent. It had previously forecast 4 per cent to 8 per cent growth. AB InBev reported some challenges in Europe, where it said revenue grew but Ebitda declined by mid-single digits because of higher commodity costs and increased sales and marketing investments to support its World Cup sponsorship. 

The Leuven, Belgium-based brewer said its overall organic revenue grew by 12.1 per cent in the quarter to $15 billion, beating estimates of 10.8 per cent growth. Volumes increased by 3.7 per cent.

FinancialExpress.com adds…

Earlier, Heineken NV had said that beer volumes rose 8.9 per cent on an organic basis during the third quarter, which was below the 11.8 per cent average analyst estimate. In August, Heineken had posted higher-than-expected first-half earnings as consumers bought more beer despite inflationary pressures even as it saw rising costs squeezing its profit margins in 2023. In an interaction with Reuters, CEO Dolf van den Brink had said that the company saw rising costs squeezing its profit margins in 2023. Heineken had also cast doubt on reaching its previously set target to raise its operating margin to 17 per cent in 2023, due to higher input costs.