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- Anheuser-Busch is turning to more expensive, premium beers as Bud Light and Budweiser lose market share.
- Revenue of the beer giant’s premium segment, which includes brands such as Shock Top and Goose Island, grew 18.3% in 2018.
- "Consumers are revising their choices, and they want to have more premium propositions.," AB InBev’s US CMO Marcel Marcondes recently told Business Insider.
Anheuser-Busch is doubling down on premium beers, as sales of iconic brands such as Bud Light and Budweiser continue to slip.
The beer giant’s "premiumization" strategy proved a bright point in the company’s earnings report on Thursday, with revenue of the premium High End Company growing 18.3% in 2018.
Premium beers, such as Shock Top, Goose Island, and Budweiser Reserve, are crucial as sales slow for many massive, iconic brands. In the US, Bud Light lost 80 basis points of total market share, while Budweiser lost 35 basis points in 2018.
AB InBev said on Thursday that it expects the premium segment to grow about five times faster than core and value brands in the coming years.
"Consumers are revising their choices, and they want to have more premium propositions.," AB InBev’s US CMO Marcel Marcondes recently told Business Insider.
"So, although we do have some flagship iconic brands in the market like Budweiser and Bud Light, can’t we elevate those propositions?" Marcondes continued. "Let’s give it a try, let’s talk to consumers and let’s understand their needs and let’s make those propositions even more premium and sophisticated."
The move towards more premium brews is being driven in part by people having more money to spend, with AB InBev estimating that global disposable income growing from $24 trillion in 2017 to $43 trillion in 2030.
"We see consumers are seeking more premium prepositions in all the categories," Marcondes said. "Beer cannot be the only exception to that."
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SEE ALSO: Budweiser’s parent company is preparing for Gen Z to ditch booze with more alcohol-free beers
Source: Business Insider – ktaylor@businessinsider.com (Kate Taylor)