AB InBev grew by selling less beer for more money

The growth is all in the price

A disclosure first: the proprietor of this paper works at AB InBev. What follows uses only public filings and treats the company as it would any other name.

Anheuser-Busch InBev is the largest brewer on earth, and in 2025 it sold less beer than the year before and booked more revenue anyway. Full-year revenue was $59.3 billion, up 2.0% on an organic basis, while total volume fell 2.3% organically, beer volume 2.6%.¹ The two facts are not in tension once you write the identity that governs a brewer. Revenue is volume multiplied by net revenue per hectolitre, the blended price of everything in the barrel. Revenue per hectolitre rose 4.4% organically in 2025.¹ Multiply the two moves and the whole year drops out: 0.977 times 1.044 is 1.020. Every point of AB InBev's growth came from charging more per litre; none came from selling more litres.

How a shrinking brewer charges more

Price per hectolitre does not climb on list-price increases alone. The larger lever is mix: moving the volume that remains toward pricier liquid. AB InBev calls its dearer brands the above-core portfolio, and it was roughly 35% of 2025 revenue.¹ The tiers above the mainstream lagers grow far faster than the company as a whole. In 2025 no-alcohol beer revenue rose 34%, the Beyond Beer range of canned cocktails and hard seltzers rose 23%, and the group's megabrands rose 4.1%, with Corona up 8.3% by revenue outside its home market of Mexico.¹ The first quarter of 2026 pushed the same levers harder: revenue up 5.8% organically, Beyond Beer up 37%, no-alcohol up 27%, the above-core tier up 11%.²

The fastest-growing parts of the world's biggest beer company are the parts with less beer in them, or none. Corona Cero and the no-alcohol range are the sharpest growth in the portfolio, and they exist because the mix, not the volume, is what pays.

The mix engine shows up in the margin. Normalized EBITDA rose 4.9% to $21.2 billion and the margin widened 101 basis points to 35.8%, because a richer blend and price rises drop through faster than the cost of the liquid behind them.¹ A business that grows earnings faster than revenue, and revenue faster than volume, is one where the profit is manufactured above the barrel, not inside it.

Why the market started paying attention again

For most of the past decade AB InBev was not an earnings story but a debt story. To buy SABMiller in 2016 it took on borrowings that left net debt at $108.0 billion, or 5.5 times EBITDA at the end of that year.³ That is the number that governed the equity: a company that size, that indebted, spends its free cash on lenders, and its shares trade on when the balance sheet will be repaired rather than on how the beer sells. By the end of 2017 net debt had come down only to $104.4 billion, 4.8 times EBITDA, and management was already warning that dividend growth would be modest "given the importance of deleveraging."³

In October 2018 it stopped warning and acted. AB InBev halved the dividend, rebasing the interim payout from €1.60 to €0.80 a share, and said plainly why: "we are rebasing our dividend payout to accelerate deleveraging toward our optimal capital structure of around a net debt to EBITDA... ratio of around 2x."⁴ A dividend cut is the most expensive signal a consumer-staples board can send, and income holders sold. But the cut did exactly what it was designed to do. Cash that had gone to shareholders went to lenders instead, year after year.

By the end of 2025 net debt was $60.9 billion and the net leverage ratio was 2.87 times EBITDA.¹ Roughly $47 billion of net debt had been retired and the multiple had more than halved from its peak, closing on the "around 2x" the company set as its target seven years earlier. That is the pivot the market re-rated. With the balance sheet near repaired, the cash the 2018 cut redirected to lenders is free to come back to shareholders. In October 2025 AB InBev announced a $6 billion buyback to run over 24 months alongside a $2 billion bond redemption, framing both as a consequence of "the progress we have made on our deleveraging."⁵ By 1 May 2026 it had already repurchased $1.4 billion of stock.² The dividend that was halved in 2018 has become a buyback, and the same free cash flow that once serviced a takeover now compounds a smaller share count.

The base underneath is still eroding

The bear case begins with the number the bull case works around: volume falls. Beer volume was down 2.6% organically in 2025, and the erosion is worst in the developed market that matters most to the price mix.¹ In the United States, AB InBev's sales-to-retailers fell 3.2% in 2025, and revenue per hectolitre there rose only 2.0%, roughly half the group rate.¹ The US is where premiumisation is thinnest and the volume decline hardest.

The American weakness is not only the secular drift away from beer. It carries the long tail of a specific event. In the spring of 2023 a marketing misstep at Bud Light triggered a consumer boycott, and the decline was severe: AB InBev's own filing for the first half of 2023 reported US sales-to-wholesalers down 8.6% and sales-to-retailers down 9.2%, attributing the drop to "the volume decline of Bud Light."⁶ Retail-scan data was starker still: in the last week of May 2023 Bud Light volume fell 27.8% year on year, and Modelo Especial passed it to become the best-selling beer in the United States, ending a reign that had lasted two decades.⁷ Three years on, US sales-to-retailers are still negative, and Michelob Ultra, not Bud Light, is the brand the company now names as its US volume-share leader.¹ A single brand's franchise can be lost in a quarter and not recovered in years, and the price-and-mix engine has to run against that leak, not on top of a stable base.

Two risks the model cannot price

Beyond the shrinking base sit two exposures that are harder to size. The first is currency. AB InBev earns a large share of its profit in emerging markets and reports in dollars, so translation can swing the bottom line well away from the operating result. In 2025 underlying EPS grew 6.0% as reported but 9.4% in constant currency, meaning translation and financing costs ate roughly 3.4 points of growth.¹ The effect is not one-directional. In the first quarter of 2026 the same line ran the other way, underlying EPS up 20.8% as reported against 8.8% in constant currency, with currency and items below EBITDA adding rather than subtracting.² Either way, a shareholder is holding an operating business wrapped in a currency book that can add or remove several points of earnings in a quarter, and the volatility does not shrink as the debt does.

The second exposure is newer and more speculative: the GLP-1 weight-loss drugs, and what they do to alcohol demand. The mechanism is plausible because the same drugs that blunt appetite appear to blunt craving. The evidence is early. A 2025 randomized trial in JAMA Psychiatry gave low-dose semaglutide to 48 adults with alcohol use disorder over nine weeks and found reductions in laboratory alcohol self-administration at medium-to-large effect sizes, in weekly craving (β −0.39, P = .01) and in drinks per drinking day (β −0.41, P = .04).⁸ Those are real signals, but the trial was small and short, and the researchers flagged as much: "among several study limitations are the modest sample size and short-term treatment duration." Independent experts were blunter that claims of "widespread clinical impact... may be premature without larger long-term studies."⁹ For a company whose entire revenue is alcohol-adjacent, this is a tail risk, not a current event: no quarter yet shows a GLP-1 dent in volumes. But it is the kind of demand shift that would attack the one thing the whole thesis depends on, the willingness to pay more per litre, and it is worth watching precisely because the market is not yet pricing it.

What the re-rating actually buys

At about $79 a share and a market value near $155 billion in July 2026, the equity has recovered much of the ground it lost in the debt years.¹⁰ What that price pays for is worth stating precisely, because it is neither the bull's growth story nor the bear's decline story. The deleveraging is real and nearly finished, and that genuinely changes the security: at 2.87 times EBITDA, more of $11.3 billion in annual free cash flow goes to owners and less to lenders, and a buyback now compounds where a dividend cut once stung.¹ That part of the case is arithmetic, and it holds.

The growth, though, is entirely price and mix on a base that shrinks. The re-rating is therefore a bet on pricing power: that AB InBev can keep lifting revenue per hectolitre by 4% a year through premium brands, no-alcohol lines and canned cocktails faster than beer volumes fall, for long enough that the capital return does the compounding. The four exposures all attack that same bet from different sides. Structural volume decline shrinks the base the price is charged against. The US shows how fast a franchise can break and how slowly it heals. Currency can wipe out a mix year's gains in translation. And the GLP-1 question, still years from resolution, aims straight at the willingness to pay that the entire model rests on. The balance sheet has been fixed. The harder question, whether pricing power can outrun a falling volume base indefinitely, is the one the shareholder is now actually being asked to answer.