AB InBev to boost marketing spend

13 November 2009

LEUVEN, Belgium: Anheuser-Busch InBev, the global brewing giant, plans to heighten its marketing activity over the rest of 2009, having benefited from an increased focus on this area during the last quarter.

The drinks group owns almost 300 brands overall, but concentrates the majority of its marketing support behind its "Focus Brands", defined as the products that it believes "have the greatest growth potential in their relevant consumer segments."

Its volume sales fell by 3.2% in the third quarter, and are down by 1.4% in the period from January to September, while its soft drinks range delivered a decrease of 2.3% in Q3, but is up by 2.5% for the year-to-date.

Within this, its "Focus Brands" grew by 0.4% in the last reporting period – with Antarctica, Brahma and Skol performing well in Brazil, as did Harbin and Budweiser in China and Stella Artois in the UK – and have now recorded an expansion of 1.6% for 2009 so far.

Moreover, the Leuven-based firm posted improvements in its market share in key target countries including Argentina, Belgium, Brazil, the UK and the US in the penultimate quarter of 2009.
Carlos Brito, the company's ceo, said it had dealt with "a challenging operating environment, made significant progress on all our commitments, while increasing our sales and marketing investment."

Recent marketing initiatives have included the "Budweiser National Karaoke Contest" in China, which was credited with helping the world's largest beer brand boost its sales by 12.1% in the BRIC nation in Q3.

Bud Light Golden Wheat and Select 55 were also launched in the US between July and September, while a social media campaign for Bud Light Lime helped the Bud Light portfolio as a whole register growth of 6.8% in Canada.

In all, AB InBev's sales and marketing expenses have risen by 2.7% on an organic basis this year, including upticks of 8.6% in North America, 17.4% in Western Europe, 7.3% in Central and Eastern Europe and 6% in Asia, although Latin America is down on this measure on an annual basis.

In North America, "media deflation and savings in non-working money for sales and marketing allowed us to 'buy more for less,' especially for campaigns supporting new product innovations," AB InBev added in a statement.

Similarly, its operations in Western Europe have benefited from "marketing and promotion synergies in the UK and ongoing media cost deflation."

Felipe Dutra, the conglomerate's chief financial officer, said the company expects the final quarter to "deliver higher year-over-year sales and marketing investment," based on new product launches and a further emphasis on its "Focus Brands".

Data sourced from Anheuser Busch-InBev; additional content by Warc staff