CACTI from Anheuser-Busch

Anheuser-Busch (NYSE: BUD) is expected to report year-over-year top and bottom line growth tomorrow when they release their first quarter earnings Thursday.  Tomorrow’s earnings report will be particularly telling for CACTI Agave Spiked Seltzer, the newest member of Anheuser-Busch’s hard seltzer family.

Zacks Investment Research forecasts the beverage giant’s Earnings Per Share (EPS) will be $0.48, a massive rebound from last year’s Q1 EPS of -$0.42. The company’s consensus Revenue Estimate is projected at $11.49 billion, showing 4.5% growth from the same period last year.

If Anheuser-Busch is able to beat those rosy estimates, the stock will be in high demand. The company reported negative earnings of 14.3% in the final quarter of last year after suffering the effects of pandemic-related restaurant and bar closures. 

Focus is Beyond Beer

All eyes will be on hard seltzer and ready-to-drink (RTD) canned cocktails tomorrow. The categories surged in popularity last year, becoming the quarantine drinks of choice and easing the pain of on-premise losses for many major beverage companies. The hard seltzer market hit almost $3.8 billion over the past year and is forecasted to reach $11 billion by 2027. 

During a recent earnings call, Anheuser-Busch Chief Executive Officer Carlos Brito expressed excitement about the future of the company’s RTD product lines, “It’s about seltzers growing double what the category is growing. It’s about the high end gaining share within the total segment. It’s about mainstream stabilizing.”

“And it’s about beyond beer, like Cutwater,” Brito continued. “Cutwater, for example, growing twice the growth of RTD cocktails.  So in terms of beyond beer strategy in the U.S., we have winning with the seltzer space is the prime driver. And for that, we have new news on Ultra Organic Seltzer, Bud Light Seltzer Lemonade and CACTI for this year, 2021.”

Is CACTI Enough to Buoy A-B?

This will be the first AB InBev quarterly report since CACTI hit shelves in March of this year. Rapper Travis Scott’s tequila-inspired seltzer immediately sold out in stores across the country and garnered record breaking numbers.

CACTI’s impressive first week sales rate was higher than that of any of the beverage company’s other seltzer products to date. The brand’s first week sales outpaced fierce competitors like Boston Beer’s Truly Hard Seltzer Lemonade Seltzer Mix Pack and Mike’s Hard Lemonade Seltzer Variety Pack. 

CACTI isn’t the only hard seltzer in Anheuser-Busch’s repertoire to keep an eye on. Bud Light Seltzer launched early last year and has quickly become a force to reckon with in the seltzer category. Less than a month after its launch, Bud Light Seltzer was ranked the third most popular seltzer in the market by Nielsen, coming in behind Truly and White Claw. The brand launched in Canada last month after thousands of social media requests for the beverage.

Bud Light Seltzer has rapidly expanded their product line to include Bud Light Seltzer Lemonade, Bud Light Platinum Seltzer, Bud Light Seltzer Iced Tea and Bud Light Seltzer Out Of Office. 

Anheuser-Busch is also home to Michelob Ultra Organic Seltzer, which launched in January of this year. The brand is USDA certified organic and contains only 80 calories per serving. Michelob Ultra is the fastest growing beer brand in the country. The company has high hopes for the success of its new line of organic seltzers. 

Seltzers are high priority for beverage companies across the U.S. this year and Anheuser-Busch is no exception. The company recently announced plans to invest $1 billion in their facilities, an investment aimed at bolstering production to keep up with demand for hard seltzer products. Thursday’s Q1 earnings report will solidify the impact of RTD beverages and hard seltzers on the company’s overall performance. 

Shirani Jayasuriya
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