Erosion risks

• Category shifts toward spirits/RTDs or non-alcohol
• Brand damage from controversies or quality issues
• Private label and value competition in downturns

Leading indicators

• Brand volume/share trends (Budweiser family, Michelob Ultra, etc.)
• Price/mix and revenue per hl trend
• Retailer shelf-space and promo intensity

Counterarguments

• Craft and regional brands can chip away at mainstream loyalty
• Consumers can switch with low friction among comparable beer brands

Erosion risks

• Input cost inflation (aluminum, glass, barley) compressing margins
• Operational disruptions (labor, logistics, weather)
• Regulatory constraints limiting consolidation benefits

Leading indicators

• Cost per hl / gross margin trend
• Net debt leverage and refinancing costs
• Capex efficiency and productivity savings

Counterarguments

• Large competitors also have global scale; procurement advantages are not exclusive
• Scale can reduce agility versus smaller, trend-driven entrants

Erosion risks

• Aggressive pricing and innovation by key rivals
• Downtrading during macro weakness
• Excise tax increases and regulatory tightening

Leading indicators

• Revenue per hl and premium mix
• Share in core beer and no-alcohol categories
• Brand health tracking (awareness, consideration)

Counterarguments

• Duopoly can still be promotional and price-competitive
• Consumers may trade down quickly if disposable income weakens

Erosion risks

• Competitors replicate B2B ordering and delivery capabilities
• Platform adoption stalls among small retailers
• Regulatory restrictions on alcohol delivery/e-commerce

Leading indicators

• BEES Marketplace GMV and retailer penetration
• DTC order growth and unit economics
• Fill-rate and on-time delivery

Counterarguments

• Digital ordering may not create strong switching costs if products are substitutable
• Retailers can multi-home across supplier portals

Erosion risks

• Local value competitors taking share in price-sensitive channels
• Anti-alcohol sentiment and regulation tightening
• Execution risk on innovation (no/low alcohol, RTD)

Leading indicators

• Premium share of revenue and volume
• Brand volume/share in Brazil
• No/low alcohol growth rates

Counterarguments

• Brand preference can be cyclical and promotion-driven
• Import/premium brands can face rapid competitive imitation

Erosion risks

• Competitors build comparable DTC/logistics networks
• Rising last-mile costs reduce DTC economics
• Regulatory limits on alcohol delivery

Leading indicators

• DTC orders (Ze Delivery) and retention
• BEES Marketplace GMV and active retailers
• Service levels (OTIF, fill rates)

Counterarguments

• Consumers can still buy competitors easily via traditional retail
• DTC scale may not translate to superior profitability

Erosion risks

• Beer category maturity and substitution to other beverages
• Discounting and private label expansion
• Marketing restrictions (advertising bans, labeling rules)

Leading indicators

• Premium portfolio mix (% of revenue)
• Revenue per hl and promo intensity
• Market share in key markets

Counterarguments

• High retailer concentration in Europe can pressure pricing
• Premiumization can reverse if consumers trade down

Erosion risks

• Energy and input cost volatility in EMEA
• Carbon/water constraints increasing compliance costs
• Operational complexity across many countries

Leading indicators

• Cost savings vs plan
• Energy cost per hl
• EBITDA margin trend in EMEA

Counterarguments

• Regional competitors also operate at scale (Heineken/Carlsberg)
• Scale benefits can be offset by higher fixed cost base in down cycles

Erosion risks

• Price competition and local champions in China and SE Asia
• Channel shifts away from on-premise affecting premium mix
• Regulatory constraints and local protectionism

Leading indicators

• Premium volume growth vs mainstream
• Revenue per hl and channel mix
• Market share trends in China and South Korea

Counterarguments

• Local incumbents can outspend or out-distribute in home markets
• Premium brand positioning is vulnerable in weak macro environments

Erosion risks

• FX volatility and import costs for premium brands
• Rising local ingredient/packaging costs
• Geopolitical restrictions on supply chains

Leading indicators

• Gross margin in APAC
• Local sourcing % and input cost trends
• Capacity utilization

Counterarguments

• Scale advantages are less decisive if demand is weak and price competition dominates
• Large regional brewers also enjoy substantial scale

Erosion risks

• Retailers multi-home across supplier apps
• Competing platforms or wholesalers digitize ordering similarly
• Regulatory limits on data usage and digital marketing

Leading indicators

• % of revenue transacted through B2B digital platforms
• Active BEES users and order frequency
• Churn/retention of small retailers

Counterarguments

• Workflow tools may be nice-to-have rather than sticky if product choice is the main driver
• Switching costs can remain low if payments/credit are not embedded

Erosion risks

• Marketplace disintermediation by large suppliers
• Margin pressure if the marketplace competes mainly on price
• Cybersecurity and platform reliability issues

Leading indicators

• Marketplace GMV and take rate
• Number of third-party SKUs and suppliers
• Order frequency and repeat rate

Counterarguments

• Incumbent e-commerce marketplaces can outcompete on breadth and logistics
• Network effects may be weaker if retailers primarily use BEES for AB InBev products