Below are key drivers of Anheuser-Busch InBev that present opportunities for upside or downside to the current Trefis price estimate:
BUD EBITDA Margin has faced slight downward pressure in recent years due to rising costs and the impact of foreign currency translations. In 2024, the margin was 35%. Looking ahead, Trefis projects this margin to increase to 37% by the end of its forecast period. However, a more significant margin expansion to 42%, driven by a favorable product mix and enhanced operational efficiencies, could lead to a 25% upside in Trefis's current price estimate for Anheuser-Busch InBev.
Anheuser-Busch InBev (AB InBev) holds the position of the world's largest brewer by volume and ranks among the top global consumer packaged goods companies by revenue. With a diverse portfolio, the company produces, markets, distributes, and sells over 500 beer and other malt beverage brands worldwide. Its brand lineup includes global icons such as Budweiser, Stella Artois, and Corona (excluding the U.S. market), alongside prominent international brands like Hoegaarden, Leffe, and Beck's. AB InBev also boasts a strong presence with popular local brands, including Bud Light, Brahma, and Antarctica. Beyond beer, the company is involved in the production and distribution of soft drinks, particularly in Central and South America and Africa, as well as near-beer products like Lime-A-Rita and the broader "Rita" family in the United States and Mexico, MixxTail in China, Argentina, and other regions, and Skol Beats in Brazil.
The foundation of AB InBev was laid in 2004 with the merger of Belgian-based Interbrew and Brazilian brewer Ambev, which itself was formed through the combination of Brahma and Antarctica. This was followed in 2008 by the landmark merger between InBev and the American brewing giant Anheuser-Busch, a transaction valued at approximately $54.8 billion. To manage the significant debt incurred from this combination, AB InBev implemented a divestiture program, which included selling its stakes in brewers Tsingtao and Oriental Brewery.
AB InBev further expanded its global footprint in June 2013 with the acquisition of Grupo Modelo, a leading Mexican brewer, in a deal worth $20.1 billion. This acquisition significantly strengthened AB InBev's presence in Mexico, recognized as the world's fourth-largest profit pool for beer manufacturers. The company was also poised to benefit from the global growth potential of Corona, Grupo Modelo's flagship brand. However, to comply with antitrust regulations in the U.S., Anheuser-Busch InBev divested the operations of the Piedras Negras brewery in Mexico and sold the exclusive rights to market and sell Corona and certain other Grupo Modelo beers in the U.S. to Constellation Brands.
A major strategic move occurred in October 2016 when AB InBev acquired control of SABMiller, completing a business combination with a gross purchase consideration of USD 114 billion. This acquisition brought several prominent global brands into AB InBev's portfolio, including Beck's and Foster's. Subsequently, in 2019, as part of a strategy to optimize its global operations, the company agreed to sell its Australian affiliate Carlton and United Breweries (including the Foster’s brand) to Asahi for $16 billion. Additionally, AB InBev divested its China operations, which included its stakes in Tsingtao and Snow, the top-selling beer brand in China.
Budweiser stands as one of the top-selling beers in the United States, and its global volumes have shown an upward trend. The brand's sponsorship of major global events, including the FIFA World Cups in 2014, 2018, and 2022, has leveraged the high viewership of these tournaments to aid the company's volume growth.
Globally positioned as a premium beer brand, Budweiser is expected to benefit from increasing disposable incomes worldwide. As consumers gain more purchasing power, they may shift towards higher-priced beer options, which is anticipated to drive both volume growth and higher revenue per unit volume for the brewer.
The flavored beer segment presents a potential avenue for future growth for the company. BUD has already achieved notable success in this category across both emerging and developed markets. For instance, in South Africa, Flying Fish experienced volume growth by successfully attracting female and younger legal drinking age consumers into the beer category, thereby gaining market share from cider products. Similarly, in Western Europe, Cubanisto, a rum-flavored premium beer, saw its top-line revenue increase in recent years (with the exception of 2020) by effectively competing with spirits in the nightlife occasion category. Recognizing the dynamism of the craft beer market, the company has also been actively building a presence through partnerships with numerous craft breweries. Anheuser-Busch's craft portfolio continues to grow at a pace exceeding the industry average, driven by both organic expansion and wider distribution networks. Furthermore, in France, the Leffe brand has successfully grown to become the leading beer brand in terms of market penetration.
