The world’s leading brewer, AB InBev, said Thursday its third-quarter net profit slid by over third as costs of beer ingredients rose and sales growth slowed.
In the period from July through September, the group that includes the Budweiser, Stella Artois and Corona brands posted net profit of just over $1 billion (£730m), compared to $1.58 billion during the same period last year.
Third-quarter sales rose by 7.9 percent to $14.3 billion, but that was much slower than the 27 percent growth rate in the second quarter.
A three-percent increase in operating earnings to $5.2 billion was less than half the rise in sales due to adverse exchange rate effects “and commodity headwinds, coupled with elevated supply chain costs in certain markets,” the brewer said in a statement.
Global supply chains have become snarled with delays in sea and land transport in many countries, driving prices higher.
Nevertheless, AB InBev raised its outlook for the year, saying it now expects operating earnings to grow by 10-12 percent this year, due to higher sales volumes and higher prices for customers.
One area of growth the company noted was direct-to-consumer sales, which surpassed $1 billion in the first nine months of the year thanks to booming online sales.
Budweiser Brewing Group UK&I, meanwhile, has seen value and volume growth vs. 2019, thanks mainly to the popularity of brands in the off-trade. The local business added that the brands have been outperforming the overall beer market in the on-trade, driven by strong performances from Corona and Camden Hells.
“This quarter, consumers continued to choose our strong portfolio of leading premium and super premium beers,” commented Paula Lindenberg, president for UK & Ireland, Budweiser Brewing Group.
“Stella Artois retained its position as the #1 beer brand in the off-trade by volume and value throughout Q3, while Budweiser remained the #2 beer brand in the off-trade. Corona, the UK’s #1 World Beer, performed ahead of the beer category vs. 2019. Camden Hells saw a strong performance in Q3 and has continued to outperform the total category.”