By Thomas Buckley and Thomas Mulier
Anheuser-Busch is ramping up spending on marketing initiatives ahead of the Fifa World Cup this summer after promotions helped buoy demand in Colombia and Peru.
Budweiser’s campaign for the World Cup, the most-watched sporting event globally, began this week.
The initiative comes as AB, the world’s largest brewer, works to drive more revenue from athletic tournaments and social occasions after the past decade’s influx of smaller brands weaned drinkers off its mass-market brews.
To address that challenge, the Leuven, Belgium-based company is investing $2bn (€1.7bn) in promoting its brands and improving supply chains in the US.
The company sees a drag on earnings growth of between 0.5% and 1% from increased spending on the World Cup, which will be more weighted to the second quarter of the year, chief executive officer Carlos Brito said.
The company posted first-quarter earnings growth of 6.6%, surpassing analysts’ estimates. The company said it was confident growth will quicken, especially in the second half.
Shares in AB were largely unchanged.
The beverage company’s results were “a relief, and growth looks set to accelerate,” Olivier Nicolai, an analyst with Morgan Stanley who rates the shares the equivalent of buy, said in a note to clients.
In Colombia, the Aguila brand increased sales more than 50% in the first quarter, helped by ads that fueled nostalgia for the last time the country played in the World Cup.
Cristal performed well in Peru as the brand is supporting the national team.
This year’s World Cup is held in Russia, a market dominated by Carlsberg.
The Danish brewer said last week the Russian market shrank by about 5% in the first quarter, hurt by restrictions on bottling and the threat of international sanctions on the country’s economy.
AB InBev said it plans World Cup promotions for Budweiser in Argentina and in Nigeria, where it started selling the brand in March.