Innovation boosts AB InBev

1 March 2013

ST LOUIS: Brand extensions and innovation have played a key role in generating sales and profits for Anheuser-Busch InBev, the brewer.

Discussing fourth quarter results in a conference call, Carlos Alves de Brito, the firm's CEO outlined how innovation had played a central role in its success during 2012, when revenues grew by 7.2%, and how a premiumisation strategy was planned for 2013.

Budweiser was the early focus in 2012, with Bud Light Platinum launched in the US early in the year and achieving a 1.1% share. De Brito suggested that over 40% of Bud Light Platinum's sales had come from wine and hard liquor and another 30% from rival beer brands.

Bud Light Lime-a-Rita followed, gaining a 0.4% share and avoiding cannibalisation as just 18% of its volume came from within the AB InBev portfolio.

Platinum and Lime-a-Rita were the top two new beer products of the year and another new flavour, Straw-Ber-Rita, will be launched in 2013.

This year has already seen the introduction of Budweiser Black Crown, a strong, premium-priced product, aimed at broadening customer reach, especially among young adults.

De Brito noted that the company has "a commitment to developing the emerging US cider category", shown by line extensions for two different brands: Michelob Ultra launched Ultra Light Cider and Stella Artois Cidre was introduced to sit alongside the existing lager brand.

In Brazil, the Antarctica brand saw a Sub-Zero line extension, which has performed well through an association with the annual carnival in Rio.

And in China, Budweiser Supreme was developed especially for the Chinese restaurant channel.

China is Budweiser's second largest market and AB InBev, having already opened two new breweries there during 2012, plans to open three more in 2013 and another four in the following two years.

Data sourced from Seeking Alpha; additional content by Warc staff