At Budweiser, the “King of Beers” is setting its sights on being the “King of Non-Alcoholic Beers,” according to one top beverage analyst.
“Alcohol-free beer is a key growth segment, with the company continuing to invest behind growth of Budweiser Zero as well as opening the platform for craft breweries as well,” Evercore ISI’s Robert Ottenstein wrote in a new note.
Ottenstein shared observations from a Beverage Digest presentation he attended last week, where AB-InBev (BUD) management discussed major growth drivers such as non-alcoholic beer and hard seltzers.
“Stigmas behind non-alcoholic [beer] from consumers have been falling, led by Europe but now seeing similar trends in the U.S. as well,” Ottenstein added.
The analyst has an Outperform rating on AB-InBev with a $70 price target, implying an upside of 17% from current levels.
Budweiser Zero — which contains no alcohol, as its name implies — debuted in the summer of 2020. And that launch was well-timed.
Total dollar sales of non-alcoholic drinks in the U.S. stood at $395 million, up 20.6% year over year, through August of this year, according to data from NielsenIQ. Non-alcoholic beer made up 85.3% of that total sales figure, with a market valued at $328.6 million, up 19.5% year on year.
