Trouble brewing

Brewers at AB InBev need to rethink its strategy

As drinkers cool on beer, the world’s mightiest beermaker can no longer rely on takeovers to boost growth

Snooty ale connoisseurs mock Budweiser’s usurped title of “King of Beers”. No one, however, quibbles that Bud’s purveyor, Anheuser-Busch InBev (ABI), reigns over global brewing. The all-conquering firm now sells almost three Olympic-sized swimming pools of beer an hour—more than its three nearest rivals combined. Yet even as profits have frothed, weariness has descended upon the head that wears the crown. ABI's prospects, once as golden as its Corona lager, have assumed the cloudier quality of a Belgian witbier.

ABI, which is nominally based in the Flemish city of Leuven but run out of New York, is not just much bigger than its rivals, selling one in four beers worldwide. It also generates around half the industry’s global profits. Its gross operating margins were 40% in 2018, more than double the average for other listed