Chief Executive Officer, Anheuser-Busch InBev (parent), Anheuser-Busch Companies, LLC
AB InBev CEO Michel Doukeris on mixed Q4 earnings
AB InBev CEO Michel Doukeris joins CNBC's 'Squawk Box' to discuss revenue gains following price increases, rebuilding ...
About Michel Doukeris
In a February 2023 interview, AB InBev CEO Michel Doukeris discussed the company's mixed Q4 earnings, noting a slight decline in overall beer volume. He attributed this to price increases implemented in October and September, as well as the impact of COVID-related shutdowns in China. Doukeris stated that inflation is moderating globally and that costs are "going back to normal," though he added that the process may not be "as fast as one could expect." Regarding the hard seltzer market, Doukeris described it as part of a broader "beyond beer" category. He said that while malt-based seltzer sales have declined, vodka-based alternatives such as Neutral are "growing very fast." He also highlighted the growth of non-alcoholic beer, citing Budweiser Zero as the leading non-alcoholic beer in the U.S. as of December 2022, and pointed to consumer demand for healthier options and improved brewing technology as drivers of this trend.
Transcript (10 segments)
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Interviewer0:00
A more disciplined approach to inventory management as well, and as a result, the stock is up. AB InBev, reporting its first quarterly decline in volume since the pandemic. However, the maker of Budweiser, Modelo, and Stella Artois did report a growth in revenue. And AB InBev CEO, it's good to have you on this morning. Welcome.
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Michel Doukeris0:37
Good morning. Thank you for having us.
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Interviewer0:39
We did see a slight decline, I guess, in overall beer volume, but that actually looks like more because you had to raise prices because of raw input and inflation.
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Michel Doukeris0:56
Yes. Actually, if you look at 2022, we achieved our all-time high volume. When you look at quarter four, we had China, the whole COVID situation and the U-turn, shutting down to try to get out of the situation. So heavy weight on China. And we increased our prices in October and in September. Retailers buy in advance, and very bad weather in the back half of the quarter in the U.S. But to look at January, what you have seen, China is coming back, consumption is rebuilding. I was there a week ago and you can see people in the streets. You look at IRI, volumes are 1% down, 5% up in the U.S. So a good start.
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Interviewer1:54
Just talk about what you see on the inflation front, what you've seen, where we are currently and what you expect. Will it moderate at this point or no signs of that yet?
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Michel Doukeris2:06
I think that inflation, when we look globally—we operate in more than 50 countries and it's everywhere. I think that we got out of the up cycle and we have seen now inflation is moderating. When we think about costs, we see that a loss for 2022, but I think we are seeing now things going back to normal. Inflation, I don't think that's going to be as fast as one could expect, but we are in the right direction.
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Interviewer2:41
The foray into seltzer—is it, I mean, it was hot for a while. How would you characterize it right now? It's a mature business, is it a declining business? Is there a way to reignite the interest in hard seltzer at this point? What are your plans?
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Michel Doukeris3:03
So seltzer is part of a bigger portion of the industry. We call this everything that's beyond beer in our language. So it's the intersection of beer, wine, and you see different manifestations there, different liquids, propositions. Seltzer was one, especially the malt-based seltzer. Now there are new products, even the vodka-based such as Neutral is doing very well. So seltzer is below what it was before in the malt-based version, but if you look at the vodka-based such as Neutral, it is growing and it is growing very fast.
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Interviewer3:59
You're in the non-alcoholic beverage business. It's also an interesting place, and I guess it is growing probably more than—is it growing more than the alcoholic space for you at this point? And what do you account that—I guess during the day people don't want something alcoholic but they want to have something other than a soda or a soft drink.
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Michel Doukeris4:26
That's very interesting. What we see is a conversion of two things. One, technology got much better, and today we brew liquids and non-alcohol beers that are exceptional across the globe. We have Budweiser Zero in the U.S., which in December became the leading non-alcohol beer in the U.S. and is growing well. And this conversion of new technology, better liquids, is coming on a base with another unstoppable trend that we see, which is consumers—they want healthier options and they want to have more occasions and more opportunities to do whatever they want to do, including drinking beer. So we all know that beer is the rich liquid in terms of nutrients, in terms of replenishing very well, electrolytes. In Germany, people drink after sports, the non-alcohol market there is huge. People drink in social occasions, lunch, during the week, and the non-alcohol segment is growing.