AB InBev’s non-alcoholic hangovers – Companies

AB InBev throws its targets for non-alcoholic and low-alcohol beer in the trash. The largest brewery in the world wants to sell every fifth beer in that category by 2025. But the company is still fighting below the 7 percent.

That message was received by the Reuters press house from Ezgi Barcenas. The head of the sustainability department noted this in the margin of the World Economic Forum in Davos.

That message was received by the Reuters press house from Ezgi Barcenas. This was noted by the head of the sustainability department in the margins of the World Economic Forum in Davos. Barcenas thus repeated what the brewer’s annual reports have also made clear for several years. The segment of non- and low-alcohol beer (max. 3.5% alcohol) is not really gaining momentum at AB InBev. After an initial steady start, the offensive has stalled for several years. The goal of every fifth beer turned out to be too ambitious (see the box below The Stopping Offensive), but AB InBev and its big competitors Heineken (number two) and Carlsberg (number three) pump a lot of money into it. market segment. It also seems simple. If the technical knowledge is there – brewing non-alcoholic beer requires a special technique – the brewer of different brands can launch an alcohol-free variant. In our own country, for example, it happened with the strong brands Jupiler, Hoegaarden, Leffe and Stella Artois. As the brewer is the world number one, the non-alcoholic varieties usually also become the market leader in their segment in one fell swoop. Brahma 0.0 in Brazil, for example, where the brewer is the undisputed number one. After School – also from AB InBev – the ‘normal’ Brahma is the second most intoxicated lager. Dutch Heineken, for example, also has a non-alcoholic version of its premium brand of the same name. The Heineken brand achieved sales of almost 50 million hectoliters last year, or one sixth of the group’s volume. But because the beer is sold as something expensive and exclusive, it accounts for 30 percent of the company’s profits. The non-alcoholic variant launched in 2017 is also sold more expensively. The Dutch brewer states that Heineken 0.0 is the best-selling non-alcoholic lager beer in the world, which makes the non-alcoholic segment extra interesting for brewers. The brew is not only laid on the wagon by an existing strong fire. It also belongs to the specialty beer category, so it can be priced more expensive. And also important: it should mitigate the danger of heavy drinkers. Non-alcoholic beer reduces the number of traffic accidents and leads to fewer health problems. The former CEO of AB InBev, Carlos Brito, has repeatedly expressed great enthusiasm about the potential of non-alcoholic beer in recent years. It is, for example, a healthy alternative to soft drinks. At the shareholders’ meeting at the end of April 2016, Carlos Brito spoke about “a giant hole in the market. Our non-alcoholic version of Brahma is a huge success in Brazil. These beers are also doing well in China. In Europe, the phenomenon of Radler, beer mixed with soft drinks. In Germany, the low-alcohol segment is the fastest growing in the beer market (while the whole market is shrinking, ed.) In addition, you earn a lot more on it. You sell the beers for the same price, but you pay no or less excise duty. ” Jean-François van Boxmeer also believed in it when he was still Belgian CEO of Heineken. During an analyst meeting in mid-February 2017, he stressed that the non-alcoholic segment had a tenth of the market share in Spain. “Consumers go to the tapas bar after work, but then they drive home by car. Consumers prefer to drink a beer rather than a sweet soda for dinner.” In the UK, however, Foster Radler was a flop. And Van Boxmeer, unlike AB InBev, had no volume targets for the low and non-alcoholic beers at the time. During the general meeting in April 2019, Van Boxmeer set an initial goal. “For us, it is 10 percent, based on the idea that if it can be done in Spain, it can also be done elsewhere.” The Danish brewer Carlsberg shows in its latest annual report that it earns more on the segment. The low and non-alcoholic segment represents 4 percent of volume, but 5 percent of revenue. It also launched the worldwide non-alcoholic Birell brand, ‘Belgian White’. That all sounds too good to be true. In recent years, brewers have provided plenty of bells and whistles at each launch of an alcohol-free brand or variant. AB InBev went from 26 to 42 low- and alcohol-free brands within the last five years. In China, Panama and Costa Rica, they accounted for more than a fifth of the quantities of beer sold last year. Stella Artois 0.0 is sold not only in Belgium but also in the UK, Argentina, USA and Chile. In 2018, non-alcoholic and low-alcohol beers accounted for more than 20 percent of beer volumes in six countries: China, Colombia, Panama, Australia, Honduras, Ecuador. That is, more countries than in 2021 (the activities in Australia have since been sold). In 2019, there were still six countries: Barbados, China, Colombia, Costa Rica, Ecuador and Panama. The non-alcoholic segment experienced the strongest growth for more than a decade in that year, with sales growth of double percentage points, the brewer won, but in 2020 the sober followed. At that time, the brewer had more than 80 varieties in its portfolio. Eleven new ones were launched in 2020. Volume should therefore reach one-fifth in 2025, “but despite our progress, we do not reach that figure with current developments”, the annual report reported dryly. There are two main problems. Firstly, “optimizing the drinks of certain products so that they correspond to the wishes of consumers”. Loosely translated: there is something wrong with the quality and taste. And furthermore: “Product innovations must give consumers choices when switching from beer with a higher to a lower alcohol content”. The offer would therefore be expanded further. In the annual report for 2021, the brewery had to repeat: “We are not on schedule”. Which was thus publicly repeated yesterday by Ezgi Barcenas during the World Economic Forum in Davos.

Leave a Comment