AB Inbev cuts marketing spend after sales slump

Anheuser-Busch Inbev has slashed its marketing budget for the year after reporting a poor performance in its key markets sent quarterly volume sales tumbling by 4.1 per cent.

ABInbev-Products-2013
AB Inbev has slashed marketing spend for the year following poor quarterly sales.

The brewer says it expects marketing spend for the rest of the year to increase by “mid-to-high digits” compared with a previous forecast of “high single-digits”. It will still focus activity around its premiumisation strategy for brands such as Stella Artois and Budweiser. AB Inbev increased its marketing and sales budget by 3.5 per cent in the previous quarter and made developing its insights offering a key focus for 2013.

It is also looking to a series of innovations for growth in the coming months including the launch of a bow tie-shaped Budweiser can, a summer packaging revamp for craft beer Shock Top and promotions for the Stella Artois Cidre range. Additionally, it will launch more in-store promotions to give its beers greater stand-out in what it called a “tough” off-trade environment.

The brewer revealed poor volume sales during the three months to March in important markets including the US, Brazil and Western Europe had forced it to revise its outlook for the year. Much of Europe suffered during this time due to an unusually late winter with beer volumes falling by 7 per cent. Volumes in Brazil declined by 8.2 per cent while there was a 5 per cent drop in North America.

Volume sales of its premium brands such as Leffe and Brahma fell 2.9 per cent over the same period. Volumes for its global beers Budweiser, Stella Artois and Beck’s grew 4.7 per cent, helping lift revenue by 1.5 per cent for the quarter as the brewer’s efforts to convince people to pay more for its premium beers offset the slump.

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