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Research: Investigate Sell-Side Analyst Transcripts for Dealcoholization COGS

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Research: Investigate Sell-Side Analyst Transcripts for Dealcoholization COGS

Sell-Side Analyst Transcripts on Dealcoholization COGS

Tags: [finance], [cogs], [dealcoholization], [sell-side-research], [earnings-calls]

This page synthesizes sell-side analyst transcripts and corporate financial briefings from major global brewers regarding the Cost of Goods Sold (COGS) and unit economics associated with dealcoholization and the broader non-alcoholic (NA) beverage category.

Overview of Dealcoholization and COGS in Earnings Calls

While the non-alcoholic beverage segment is a highly publicised growth driver, explicit breakdowns of the technical costs of dealcoholization (such as the capital expenditure for vacuum distillation or reverse osmosis equipment, and the associated high energy OPEX) are rarely isolated in quarterly earnings calls. Instead, management teams from anheuser-busch-inbev, asahi-group-holdings, and carlsberg-as tend to aggregate NA production costs into broader supply chain, commodity, and logistics metrics [1, 5, 8, 12]. Analysts focus more heavily on the resulting nolo-unit-economics—specifically how higher retail pricing (via premiumization) offsets the combined inflation of raw materials and the dealcoholization process.

Macro Commodity Pressures Impacting NA COGS

Analysts frequently question management on raw material inflation, which affects NA beer equally or more than traditional beer due to the added manufacturing steps.

  • Input Cost Volatility: Executives have cited spikes in barley, aluminum, and energy costs as primary drivers of margin pressure [5, 7]. Because 0.0% beer still requires full brewing before the alcohol is extracted, these base commodity costs form the foundation of dealcoholization COGS.
  • Geographic and FX Constraints: Analysts note that foreign exchange (FX) depreciation combined with aluminum tariffs has driven volatility in reported COGS and EBITDA for major brewers, forcing scenario planning and active hedging [1, 5].

Corporate Transcripts and Analyst Commentary

Anheuser-Busch InBev (AB InBev)

During anheuser-busch-inbev’s recent earnings calls, sell-side analysts (such as Trevor Stirling from Bernstein) heavily scrutinized margin delivery in light of COGS pressures and strategic investments [1].

  • COGS vs. Growth: CEO Michel Doukeris and IR teams noted that while higher COGS and aluminum tariffs impacted margin expansion, this was countered by rapid premiumization [1].
  • NA Volume Offsets: The low- and non-alcohol portfolio now represents approximately 10% of AB InBev’s overall beer revenue [1]. Growth is driven heavily by corona-cero, which reported triple-digit growth and gained global market share, helping to absorb higher manufacturing overheads [1].
  • Beyond Beer Margins: Analysts (e.g., from Credit Suisse) have probed the profitability of the broader “Beyond Beer” segment, which generated over $1.5 billion in revenue back in 2021 and continues to expand through high-margin extensions like Cutwater and zero-alcohol variants [4, 13].

Asahi Group Holdings

Sell-side coverage of asahi-group-holdings—monitored by analysts from institutions like Goldman Sachs, Nomura, and Citigroup [6]—highlights the company’s aggressive pivot toward NA beverages as a margin-defense mechanism.

  • Margin Pressures & Recovery: Asahi’s financial briefings indicate that Core Operating Profit was severely impacted by significant cost increases (energy, barley, aluminum) starting in 2022 [8]. However, margins shifted back onto an upward trend through revenue-growth-management and systematic increases in unit sales prices [8].
  • Efficiency Initiatives: Rather than detailing dealcoholization equipment costs, Asahi management points to a massive “Earnings Structure Reform” aiming to generate efficiencies of at least EUR 100 million by 2027 (and EUR 150 million by 2029) across Europe. This involves over 200 supply chain and automation measures [8, 10].
  • Volume Targets: Asahi reported 43% growth in non-alcohol beers in recent periods and aims to derive 20% of its sales volume from low- and non-alcoholic alternatives by 2030 [7, 8].

Carlsberg A/S

Carlsberg’s recent earnings calls heavily feature discussions on balancing COGS inflation with organic growth, particularly under the scrutiny of analysts from Barclays, BNP Paribas, and BofA [11].

  • Flat Organic COGS: In H1 2025, Carlsberg successfully kept cost of sales per hectoliter flat on an organic basis [12]. Management attributed this to their “Funding our Journey” efficiency program, which offset standard inflation and the under-absorption of fixed costs [12].
  • P&L Shape Alteration: The integration of the Britvic soft drink portfolio drastically changed the shape of Carlsberg’s P&L, lowering the overall gross margin to 45.2% (a 60 basis point drop) due to differing soft drink unit economics compared to traditional and NA beer [12, 13, 14].
  • Alcohol-Free Brews (AFB) Strength: Analysts highlighted that alcohol-free brews grew organically by 7%, serving as a highly profitable strategic category growth driver alongside premium beer [15].

Strategic Margin Mitigation

To counteract the inherently high COGS associated with the extra manufacturing steps of dealcoholization, brewers employ several unified strategies highlighted by analysts:

  1. premiumization: Pitching 0.0% beers as premium lifestyle choices allows brewers to charge full-strength parity (or higher) prices, effectively masking the higher COGS and lower excise taxes [5, 13].
  2. Portfolio Hedging: Cross-subsidizing the high capital costs of NA beer with highly profitable, lower-COGS categories like non-alcoholic spirits or traditional soft drinks [12, 15].
  3. Economies of Scale: As brands like corona-cero achieve triple-digit growth globally, the under-absorption of fixed costs (like dealcoholization plant machinery) decreases, improving per-hectoliter gross profit [1, 12].

Contradictions & Gaps in the Research

  • The Missing Dealcoholization Line Item: There is a distinct gap in sell-side transcripts regarding the isolated OPEX and CAPEX of dealcoholization. Analysts tend to group NA brewing costs under general commodity/logistics inflation, making it difficult to ascertain the exact technological cost per hectoliter of removing ethanol versus standard brewing.
  • Margin Paradox Discrepancies: While some companies boast of NA products driving margin expansion (due to bypassing alcohol excise taxes), statements from Carlsberg show that introducing large volumes of adjacent non-alcoholic products (like Britvic) can actually compress gross margins from a percentage standpoint, even if operating profit grows [12, 13].

Suggested Additional Sources

To fully map out the exact COGS of dealcoholization, future research should target:

  • Industrial Engineering & CAPEX Reports: Sourcing whitepapers or financial disclosures from brewing equipment manufacturers (e.g., GEA Group, Alfa Laval) who sell the actual vacuum distillation units to brewers.
  • Direct Sell-Side Initiations: Locating specialized, deep-dive analyst initiation reports (e.g., Bernstein or Rabobank sector overviews on “NoLo Beverages”) rather than quarterly earnings call transcripts, as these deep dives often model out exact per-unit production costs.
  • research-investigate-profit-margins-of-zero-alcohol-vs-trad-2026-05-01 — Compare transcript rhetoric against established baseline models of traditional beer COGS.
  • research-investigate-earnings-calls-for-exact-nolo-margins-2026-05-01 — Further extraction of management Q&A sessions specifically probing the excise tax savings vs. production cost offset.

References

  1. Anheuser-Busch InBev/NV (BUD) Q4 2024 Earnings Call Transcript | The Motley Fool — fool.com
  2. Anheuser-Busch InBev SA/NV (BUD) Earnings Call Transcripts | Seeking Alpha — seekingalpha.com
  3. Investors - AB InBev — ab-inbev.com
  4. Q&A Shaun Fullalove, Global VP, Investor Relations Hello, … — ab-inbev.com
  5. What is Growth Strategy and Future Prospects of Anheuser-Busch InBev Company? – PortersFiveForce.com — portersfiveforce.com
  6. Analyst Coverage | Stock and Bonds | Investors | ASAHI GROUP HOLDINGS — asahigroup-holdings.com
  7. What is Competitive Landscape of Asahi Group Holdings Company? — matrixbcg.com
  8. [PDF] Asahi Group Holdings, Ltd. 2024 Financial Results Briefing — asahigroup-holdings.com
  9. [PDF] asahi group financial report - 2024 — asahigroup-holdings.com
  10. [PDF] H1 2025 FINANCIAL RESULTS PRESENTATION — asahigroup-holdings.com
  11. Transcript : Carlsberg A/S, Q1 2026 Sales/ Trading Statement Call, Apr 29, 2026 | MarketScreener — marketscreener.com
  12. [PDF] H1 2025 Conference Call Transcript - Carlsberg Group — carlsberggroup.com
  13. Carlsberg Reports Stronger Than Expected Annual Profits | Food Business Middle East & Africa posted on the topic | LinkedIn — linkedin.com
  14. [PDF] Corporate Presentation - Carlsberg Group — carlsberggroup.com
  15. Carlsberg reports solid soft drinks, alcohol-free growth in Q1 - Sharecast.com — sharecast.com

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