The head of Bud Light maker Anheuser Busch InBev NV, the world’s biggest beer maker, said input-cost inflation pressures are easing significantly and will begin positively impacting profit margins later in the year.
(Bloomberg) — The head of Bud Light maker Anheuser Busch InBev NV, the world’s biggest beer maker, said input-cost inflation pressures are easing significantly and will begin positively impacting profit margins later in the year.
Chief Executive Officer Michel Doukeris said input costs for materials such as aluminum to make beer cans have declined sharply, though not yet to pre-pandemic levels.
“We believe that from quarter four this year, with the visibility that we have now toward the first half of next year, we will get some benefits, some fair winds from these input costs getting more normal,” Doukeris said in an interview.
The price of aluminum rose near $4,000 a ton during the pandemic, crimping profitability for beer makers that couldn’t pass on all the input-cost increases to consumers through price hikes. Now, aluminum is trading around $2,200 a ton.
Doukeris said there are more beer price increases coming in the second half of the year in markets where prices have yet to catch up with inflation.
AB InBev reported better-than-expected financial results Thursday with earnings gaining more than 20% in Brazil, China and Colombia in the second quarter, counterbalancing a 28% plunge in the US. A measure of global sales growth known as organic revenue was just ahead of estimates, and the company maintained its 2023 profit guidance.
AB InBev has been hammered by a politically-driven controversy in the US, knocking Bud Light from its perch as the top brand.
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The company featured transgender social media personality Dylan Mulvaney in a promotional video for the brand, prompting a boycott from some right-wing conservatives. The company then cut ties with the influencer, who received online threats and hate speech. That, in turn, led to a consumer backlash from supporters of Mulvaney.
Doukeris wouldn’t comment specifically on the controversy when asked if the company should have shown support for Mulvaney.
“As we talk to consumers through the situation, simply put, they want to enjoy their beer without debate,” he said.
The company’s market-share loss in the US, which slumped by more than 5% in the wake of the controversy, has stabilized since the end of April, the CEO said.
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