AB InBev’s portfolio includes a recognizable list of well-known alcohol brands, including Budweiser, Michelob Ultra and Bud Light. While the company is actively innovating these products, creating new flavors and positioning them in trending categories such as soft or low-alcohol drinks and strong seltzer, it is also looking for growth opportunities outside its portfolio.
In recent years, the company has acquired several craft breweries, Hoop Tea, and the canned cocktail brand Cutwater Spirits. However, like its American rival Molson Coors, not all bets have been successful.
AB InBev Anheuser-Busch’s announcement that it will shut down the Babe and Hiball brands suggests that these brands were not growing fast enough either within the company or within their categories to justify further investment. Instead of spending more money, AB InBev decided to cease production and invest its dollars in larger brands and more promising smaller products.
In 2019, AB InBev acquired the remaining shares of Babe Wine it did not already own through its affiliate ZX Ventures. Two years earlier, it acquired Hiball Energy, a producer of organic energy drinks.
“As we take a more focused look at our portfolio mix, we are prioritizing investments and executions of key brands that will drive long-term growth and value creation,” the company said in a letter to wholesalers. “In 2023, we will continue to focus on our mega-brand portfolio, building relationships with new partners to further grow the category and meet consumers where they are.”
This strategy has been used by large food and beverage companies for many years. More recently, several FMCG companies have stepped up their portfolio reviews amid supply chain issues and rising inflation in an effort to optimize production and improve margins.
Coca-Cola has sold or discontinued Zico coconut water, Tab soda and Odwalla juice to focus on more profitable and fast-growing products. Last year, Nestlé sold its organic coffee brand Chameleon to Systm Foods, a food and beverage brand platform. And Danone is exploring strategic opportunities for its US organic dairy business, which includes brands such as Horizon Organic and Wallaby.