Welcome to the 2022, Nine Month Results Announcement Conference Call For Budweiser Brewing Company APAC Limited. Hosting the call today from Budweiser APAC is Mr. Jan Craps, Chief Executive Officer and Co-Chair of the Board, and Mr. Ignacio Lares, Chief Financial Officer. The results for the nine months ended 30th September 2022 can be found in the press release published earlier today and available on the Hong Kong Stock Exchange and Budweiser APAC's websites. Before proceeding, let me remind you that some of the information provided during this results call, including our answers to your questions on this call, may contain statements of future expectations and other forward-looking statements. These expectations are based on the management's current views and assumptions and involve known and unknown risks, uncertainties, and other factors beyond our control.
It is possible that Budweiser APAC's actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. Budweiser APAC is under no obligation to, and expressly disclaims any such obligation to, update the forward-looking statements as a result of the new information, future events, or otherwise. For a discussion of some of the risks and important factors that could affect Budweiser APAC's future results, see Risk Factors in the company's prospectus, dated 18 September 2019, the 2021 annual report published, and other documents that Budweiser APAC has made public. I would also like to remind everyone that the financial figures discussed today are provided in US dollars, unless stated otherwise. The percentage changes that will be discussed during today's call are both organic and normalized in nature.
Unless otherwise stated, percentage changes refer to comparisons with the same period in 2021. Normalized figures refer to performance measures before exceptional items, which are either income or expenses that do not occur regularly as part of Budweiser APAC's normal activities. As normalized figures are non-GAAP measures, the company discloses the consolidated profit, EPS, EBIT, and EBITDA on a fully reported basis in the press release. Further details of the 2022 nine-month results can be found in the press release published earlier today. It is now my pleasure to pass the mic to Mr. Jan Craps. Sir, you may begin.
Thank you, Anna, and good morning, everyone. Thank you for joining our earnings call. I hope you're all safe and well. We continue delivering top and bottom line growth year to date, thanks to our diverse geographic footprints and the strength of our portfolio. These unique attributes helped us partially offset the impact of COVID restrictions in China and escalating commodity costs. At the same time, we accelerated our business momentum in South Korea and India, where we deliver double digit top and bottom line growth driven by industry recovery and market share growth. Before I hand it over to Iggy to take you through our financial performance, I will take a few moments to provide more color on each of our key markets, especially regarding our performance in the Q3 this year.
In China, the COVID restrictions in Q3 were heavily focused on markets where premium, super premium segments are most developed, including the Southeast region with Fujian and Zhejiang, the Northern region with Beijing and Tianjin, and the Northwest region. China's GDP grows 3.7% in Q3 on a year-on-year basis, supported both by a favorable comp and revenue per hectoliter declined by 2% to 1.6% revenue growth. Despite the ongoing headwinds, our strategy and underlying momentum position our business in China for future sustainable growth. We continue to see underlying premiumization with revenue growth from our premium and super premium segments compared to the same period last year and pre-pandemic levels, both on a quarterly and year-to-date basis. We also progressed our other strategic pillars.
On the expansion front, Budweiser and Super Premium portfolio grew by double digits in expansion cities outside of regions impacted by COVID restrictions in the Q1 In the meantime, we pushed further forward on digitization, with our BEES B2B platform now extended to more than 90 cities and generating more than RMB 1 billion in net revenue year to date. In the month of September, BEES accounted for more than 10% of our revenue. We continue to drive premiumization and innovation with the launch of 059 Coastline in Fujian, a new locally inspired craft beer brand. It is brewed with local ingredients such as Da Hong Pao tea from Wuyi Mountain and mangoes from Xiamen. Alongside the brand launch, we also opened a craft brewery in Fujian in July, providing both locals and visitors with a unique craft beer destination.
It is just one way we are continuing to provide new offerings and drink experiences in China. In South Korea, our revenue grew by double digits, driven by continued market share growth and industry recovery. Revenue per hectoliter grew by mid-single digits with strong support from revenue management initiatives implemented earlier in the year for our core and premium products, which offset the channel mix impact from a volume shift from in-home to on-premise channel. Despite a tougher comp from commercial investment phasing, EBITDA increased by double digits with an expanded EBITDA margin. In India, we continue to outperform the industry, which has now recovered to above pre-pandemic levels.
In the Q3, we achieved strong double-digit growth in volume, revenue, and EBITDA, with India now the fifth largest market globally for the Budweiser brand. Before I wrap up, let me walk you through the solid progress we have made towards achieving our 2025 sustainability goals. At our Wuhan brewery, we have installed new lightweight solar panels, first in the industry and in ABI's global network. This will reduce our carbon emissions by about 4,000 tons per year. In addition, our corporate ESG achievements continue to be recognized with Budweiser APAC recently securing three grand awards at the Hong Kong ESG Reporting Awards for best ESG report, excellence in environmental positive impact, and the carbon neutral award. I will now pass it over to Iggy to take you through our financial results. Over to you, Iggy.
Thank you, Jan. Good morning, everyone. As discussed earlier, bottom line growth in the first nine months of 2022. Total volume grew by 0.4% with a strong performance in South Korea and India, partially offsetting the impact of COVID restrictions in China. Revenue and revenue per hectoliter grew by 4.3% and 2.9% respectively, driven by revenue management initiatives in South Korea and continued premiumization in India, which partially offset the unfavorable channel shifts in geographic mix in China. Another challenge we're facing this year is commodity inflation, which has been materializing in the form of a strong double-digit increase in raw material and packaging costs. We offset a significant proportion of the cost pressure through efficiency initiatives and optimized sourcing.
The cost of sales in the first nine months of the year increased by 9.9% and on a per hectoliter basis by 8.5%. Overall, normalized profit attributable to equity holders in the first nine months of the year was $878 million with normalized earnings per share grew to $0.0664. Now let's take a look at our performance in key markets. In China, year-to-date volumes declined by 2.2% with revenue per hectoliter increased by 0.7%, while normalized EBITDA declined by 5.9%. In the Q3, it was a slightly different picture, with volumes increasing by 3.7% due to the recent heat wave and the low base, leading revenue to increase by 1.6%.
Revenue per hectoliter declined by 2.0% due to the impact of the COVID restrictions on geographical and channel mix. In East Asia, volumes increased by 10% in the first nine months of the year as we continued to win market share in South Korea, supported by the strong performance of our innovation on All New Cass throughout the summer. Normalized EBITDA expanded by 30.2%. With that, Jan and I are here to answer any questions you may have.
Thank you. Ladies and gentlemen, the floor is now open for questions. In the interest of time, we ask participants to limit themselves to two questions. Please ask one question at a time. Our first question is from Xiaopo Wei, Citigroup. Please go ahead.
Good morning, Jan and Iggy. First of all, thank you so much for organizing Investor Day in Korea in December. We are all very thrilled to meet you physically again. I have two questions, one about China, the other one about South Korea. I will ask one by one. The first one about China. How and when China will reopen has been the most frequent asked question by all investors this year, and it's never been easy to make a metric on China? We appreciate that the company has been focusing what you can do yourself rather than the external factors. My question is, what's your playbook in China in terms of, product and channel strategy in the following two totally different scenarios? Scenario one, slower than expected China reopening. Scenario two, faster than expected China reopening.
I'll pause here before asking the next question momentarily. Thank you.
Thank you, Xiaopo. Thank you as well for the advertising for our Investor Day on the first of December. I appreciate it. Thank you for your question. Good morning. I think let me say this on the COVID restrictions in China. Just to give some context, right? When I go back to the Q1 , the COVID restrictions did significantly impact both our channels and geographies. When we had the last call in Q2 results, we said that we closed the month of June with a channel reopening rate about 91% for nightlife and 98% for Chinese restaurants. In that period in June, we achieved a high single-digit volume growth.
If now we update that for July and August, the reopening rate was adjusted down to about 75%-80% for nightlife and above 95% for Chinese restaurants. What we saw then is that our underlying premium super premium sales to retailers, what we call STRs, they increased by mid-single digits in July and August combined, just to give you an idea of the bounce back of our volumes. In September, though, in the lead up to the Party Congress, the reopening rates dropped significantly and the nightlife went down to about 60% reopening rates. CR was also back to its 95%.
Due to these increased COVID restrictions, we saw our premium, super premium sales to retailers decline versus last year in the month of September. There you see how the channel impact can impact our performance. If you look at a geographical lens, mostly the restrictions were concentrated in our premium footprints in Q3, especially Southeast, and then the Northwest area. Northwest for us, of course, is also overlapping with a nightlife concentration. If we look forward, we continue to expect sporadic but shorter lockdowns with the current dynamic zero policy. The government is basically addressing the policy with a science-based and targeted epidemic control and trying to balance between people's health, but then also epidemic control, economic and social development.
What it means for us is, you're right, we are focused on the things we can control, right? We have really refined our resource allocation way of working in terms of commercial investments and our overall resources. We developed this digitized tracking platform, which really allows us to very quickly calculate the COVID impact by channel, by city, and allocate it in a dynamic way so that we shift our investments and overall also can adjust our investment level based on the COVID levels in different channels and geographies. On top of that, we also increased the flexibility of our executions of our campaign.
For example, for the ongoing FIFA World Cup campaign, we have reduced the fixed cost of the campaign, but we have shifted it to more flexible investments so that we can execute in a different way, but we are much more flexible depending on the situation on the ground. Beyond that, we continue to invest in digitization, which is quite a strategic investment for us and we continue to ramp up the scale-up of our BEES platform. Of course, what is also very important for us is our geographic expansion both in the channel and the geographic lens to diversify our footprints and make us less vulnerable and less dependent on these specific channels and geographies that are more premium. I hope that answers your question, Xiaopo.
Thank you, Jan. My second question about South Korea. In my observation, you have done excellent job in Korea since Korea's reopening. What are your key takeaways from Korea's reopening so far? For example, what has changed pre and post COVID? Any enlightening key takeaway from Korea that could help you to navigate the current situation in China upon the reopening down the road? Thank you.
Yeah, I think it's an interesting question, Xiaopo, because indeed, we have seen very strong results in Korea and might as well, as to how, a reopening can drive our business results very strongly. As you know, the government lifted all the COVID social distancing rules in the middle of April this year. Since then, the industry has been recovering, and especially Q3, very strong summer consumption. When we look at first, maybe the industry side, continue to recover with the improving operating environment. If we look at the trends there, especially of course, the on-premise channel has seen a very strong recovery with the easing of the restrictions. We've seen a strong double-digit growth in the on-premise in South Korea.
We found that the channel split between on-premise and in-home channels has actually quickly returned to pre-COVID levels. People also show a very strong desire to reconnect, so we really see a big vibe in South Korea, people really wanting to go together with the season that drew traffic to Korean restaurants and nightlife channels in South Korea. Great moment for us to create a more connection with our consumers. We made a very summer campaign that really struck. In a macroeconomic context in South Korea, we did see frugality as an increasing trend. With our cost brands, we basically adopted the OBPPC strategy in the in-home channel, which was quite interesting because we leveraged.
OBPPC basically allows us to offer the right pack at the right price in the right channel. In the summer, we launched a new pack for Cass, which was a 375 ml, 6-can pack, bundle pack in the CVS channel. We also launched a two litre PET bottle, across channels to incentivize the consumers to purchase in larger quantity, which really went along with the summer peak, and also the reopening, people getting back together. Maybe a last point on that in South Korea, which I think is quite interesting, is that the beer industry recovered strongly, but it is still below pre-pandemic levels of 2019. We are cautiously optimistic that there will be continued improvements in the future in South Korea.
Thank you for your questions, Xiaopo .
Thank you so much. Looking forward to meeting all, physically so in Korea. Thank you.
See you soon.
Thank you. Our next question is from Lillian Lou, Morgan Stanley. Please go ahead.
Thank you. Good morning, Jan and Iggy. I have two questions. Maybe I ask the first question first. This is about China. Understood that with the COVID interruption, our super premium and premium is under a little bit pressure given the lockdown. Especially from the on-trade. How have you observed the underlying demand trend, putting aside this channel impact? And, will channel discounting happen again in the industry when there is cost less cost pressure and also, if the demand continue to trend weaker under current economy situation? That's my first question.
Thank you, Lillian. Thank you for your question. Good morning. I would probably say that first maybe, and I know you would have seen it in the press release, but we estimated that China industry increased in the Q3, and so did our volumes. I mean, overall, I think it stresses that the beer industry is quite resilient in the current circumstances.
I would say this resilience also applies to premiumization in China, because despite the COVID restrictions, which have increased throughout Q3, especially in the last months of Q3, we did see the premium, super premium revenue grew versus last year, but also versus the pre-pandemic level, and that's true both on the quarter and the year-to-date basis. On top of that, in markets where we don't have COVID impacts, typically our expansion markets, Budweiser and the super premium brands grew double digits. We continue to see a very strong underlying demand of consumers in China for our products.
We believe that based on consumer research, we believe that our premium, super premium beers, even if they are relatively expensive versus mainstream and core brands in the beer market in China, they are affordable luxuries, right? These are the small luxuries that can play a role as emotional stimulus that can bring people comfort and reward in difficult times. We do see that the consumer demand for premium beer brands remain strong. If you take the more longer term look, we remain very optimistic about the market in China. That's essentially driven by the growth in the middle class households, driven by you know, which is really driving the premiumization. We expect the middle class households to quadruple by 2030.
At that time, it will be about 2 x the number of middle-income households of the U.S. It really shows that China today is already the biggest beer market in the world, but we believe it will continue to grow in premiumization based on the underlying disposable income growth of these households. Of course, we see our business momentum and potential structurally intact. We don't see any channel discounting beyond any historical levels. Our inventory levels are also in line with historical levels. We don't really see any concerns on that. I would say, you know, typically want to be developed in the nightlife and on-premise channels. They wanna be developed in the higher income regions, where premium, super premium is stronger.
Of course, during COVID, we would have been a little disproportionately impacted by the COVID restrictions. We believe longer term, they are strong part of our population and our strategy, and we continue to believe that it will drive our performance in the future.
Thanks a lot, Jan. My second question is about the FIFA marketing. How's the plan for FIFA, and what's the impact in Q4 this year, when the event happens, in our top line and also our sales and marketing budgeting? Thank you.
Thank you, Lillian. Yeah, we're quite excited about the FIFA World Cup. It only happens once every four years, right? This year, we again have a very strong campaigns in the line-up. First, maybe on Budweiser, right? The global sponsor, official sponsor of the FIFA World Cup since many years, more than 30 years now. We are launching a full channel integrated marketing campaign under the theme, which is, "This World Cup is Yours to Take." It's quite an interesting campaign, and you might have seen some of the commercials at the start before the earnings call. We translate this brand campaign into very strong trade execution.
In China, for example, we are partnering with our e-commerce platform partners, including JD.com and Tmall, but also with the O2O companies, like Meituan, to drive very strong consumer conversion at the right occasions. Also, in addition to Budweiser, you probably know that we also have the rights to leverage the FIFA World Cup for our local brands. We typically pick one local brand per market. For China, for example, we do that for Harbin Ice. For Korea, we do it with Cass.
Cass is obviously the number one Korean brand. Launches recently last week an interesting FIFA World Cup campaign under the theme of, "You can play together with Cass." In the campaign, there are special cans and bottles with a special theme, and there is a different number on each of the can design with numbers from zero to 10. We stimulate people to play with their friends and family and use the packaging, the cans and the bottles as a tool to play games while they're watching the World Cup. It's really a 360- integrated media campaign to support the products' sales, of course.
If you look at the marketing execution, of course, we expect it to further uplift brand power and drive our sales. From a commercial investment point of view, we remain very agile to quickly and efficiently reallocate the resources based on the external environment. Of course it is mostly relevant for China. If you would look at our commercial investment level, both in the Q3 and the year to date periods, if you would look at our sales and marketing percent of net revenue was actually lower than the same period last year, both on a quarter and year-to-date basis. That's because we quickly saved and reallocated investments between regions and channels, impacted by COVID, with the digitized tracking platform that I was alluding to a little bit earlier.
To your question of looking forward a little bit, if we look at Q4, we actually believe that the sales and marketing, as expressed as investment as a percent of net revenue will remain similar or even below the Q4 of last year. Just to give you a little bit of a sense there. We expect it to be very powerful campaign. I think the creative that you see is very strong. We believe it will drive great execution and brand power. At the investment level, we have the plans built as such that they are very flexible and the total level we believe will be either similar or below Q4 last year. Thank you for your question, Lillian.
Yeah, that's great. Thanks a lot, Jan, and thanks, Iggy. Hope to see you in December.
Look forward to seeing you, Lillian.
Thank you. Your next question is from Chen Luo from Bank of America. Your line is now open. Please go ahead.
Hi, Jan and Iggy. I have got two questions. First, I will start with the China part. We understand that the negative product mix shift in China was largely due to the channel and geographic impact from COVID in Q3. Have we actually also observed any signs of consumers trading down or is there any market share changes within the premium or super premium segment that may warrant our attention? I'll just stop here for the first question. Yeah.
Thank you, Chen Luo, and good to hear you. Thank you for your question. Maybe first, in APAC, net revenue per actual litre increased by 0.8% in Q3 and 4.3% on a year-to-date basis. You're right, when we look at the China level revenue per actual litre declines by -2% in Q3 and -0.7% on the year-to-date basis. To your question, whether it's driven more by COVID or trading down or market share changes, it is really mostly driven by COVID restriction impacts to the channel and geographic mix. Both of these actually this time disproportionately impacted premium and super premium volumes.
Obviously it was partially offset by a positive impact over our revenue management initiatives. As you know, we did take price in the last 12 months. Despite having a significant impact from the channel closure, we do see a continuing underlying premiumization. You know, as we mentioned, both Bud and Super Premium continue to grow versus last year at pre-pandemic levels. In the expansion cities where there is no COVID restrictions, we continue to see both Bud and Super Premium grow double digits versus last year. What is also interesting in the regions where we see COVID restrictions lifting, we see a recovery momentum that is very fast when the channel restrictions are lifted. Actually the recovery is very quick.
That is also very encouraging for us. If you look at, I mean, the short term, of course, the quarter was impacted by the external environment. As I was saying earlier, we remain very confident in our strategy and the underlying momentum for future sustainable growth. I mean, as you know, we don't give short term guidance for premium, super premium growth. We are very optimistic on the midterm business prospect China based that I was alluding earlier. We do see our business momentum and the potential in China structurally intact as to our prior discussions.
I do hope in Investor Day to go a little bit more in detail on the key drivers there and we'll give some color to that as well, Chen Luo.
Thank you. That's very helpful. Moving on to South Korea. The market has done really well over the past few quarters. We still understand that the current margins are below the pre-pandemic level. When do we expect the APAC East margin to go back to the 2019 level? What will be the underlying key drivers?
Good question, Chen Luo. Let me give this one to Iggy to answer.
Good morning, Chen Luo, and thank you for the question. Obviously we don't disclose, you know, an EBITDA margin either for APAC East or for Korea in the quarterly results. Let me maybe give you some context on the results year to date and the drivers of those results, which I think will help a little bit to think through the evolution of the EBITDA margin. Both for APAC East and for South Korea, top line and EBITDA have increased by double digits year to date. Specifically in the Q3 of course, we had a tougher comparable from commercial phasing. There's continued commodity cost pressure as we've discussed previously. Even despite that, the EBITDA margins have been expanding year to date as well. The drivers of the recovery are important.
If we look at the EBITDA growth, it's really led by strong volume and net revenue per hectoliter performance. If we look at it on the volume side, they've been growing double digits, so that's been supported of course by the industry recovery, which was alluded to earlier, but also performance volume gap. In terms of net revenue per hectoliter, it expanded mid-single digits, and so this was the consequence of the revenue management initiatives that we took earlier in the year. Of course the core price increase in March as well as premium in the in-home channels at the start of the year. Of course, this more than offset any channel mix impacts that we see from the volume shift from in-home to on-premise, of course, as the industry recovered.
As Jan mentioned, people went back towards connecting socially. However, as Jan mentioned, you know, the industry has not yet recovered back to pre-pandemic levels, which is one of the reasons we see more room for further recovery on the top-line side as well. I think if we look at the drivers for EBITDA margin, specifically, right in APAC East, we still expect them to continue to be rate first and foremost, then cost efficiencies and then premiumization. In the case of rate, the annual CPI excise adjustment system, which is now two years old, makes a significant difference. This is where the government again increases the excise tax every year based on the previous year's CPI, and this creates a much more manageable annual price increase environment, right?
It's already occurred for two years, and I think you've seen the impact of that based on our price increases this year and more modestly last year, which again, of course, kind of fell under the radar, but it was still important. In terms of cost efficiencies, productivity gains and operational efficiencies in both fixed and variable costs will continue to be an important part of the EBITDA margin story. Here we continue to apply our Cost to Connect to Win methodology or approach to reduce indirect overhead costs and invest them right where they drive top-line growth. It's been part of the story of the success of All New Cass and the rest of the portfolio. A reminder again on premiumization, right? We still believe South Korea will continue to premiumize.
If we look at it, the overall industry there is still significantly under-indexed, right? With about 25% premium by volume weight as compared to more mature markets, right? If you look at North America and Europe as an example. In these markets, it's sometimes upwards of 40%. If I look at all the drivers in detail, I don't see, Chen Luo, any structural reason why margins can't return to pre-pandemic levels. They're mainly transient reasons, mainly commodities and their effects. We expect that the commodity prices and currency headwinds, both of which tend to be cyclical and are in many ways already beginning to retreat, particularly on the commodity side.
As these normalize to 2019 levels, and the remaining industry recovery is complete, we should continue to see an EBITDA margin recovery, in APAC East and in South Korea. I hope that answers the question. Thank you very mu ch, Chen Luo.
Yes, thank you. That's very helpful. We also look forward to the Investor Day in Korea. Meanwhile, I noticed that we also introduced our 059 Coastline Craft beer in Fujian, and this was also mentioned in our announcement. Actually, I also tasted the beer, really good for both the tea flavor and the fruity flavor.
I hope that one day when China reopens, we can also host another Investor Day in China so that investors can have the opportunity to taste our beer and also to see the world-class facilities and routes to market there. Thank you.
No, thank you for the kind words, Chen Luo. We could not agree more. We look forward to hosting here at one point, and we look forward to seeing you in South Korea as well.
Thank you.
Thank you, Chen Luo. Thanks for the kind words.
Thank you.
Thank you. Our next question is from Anne Ling, Jefferies. Please go ahead.
Hey. Hi, can you hear me?
Yes, we can, Anne. Thank you.
Yeah. Thank you. Hi. Thank you for taking my question. I have two questions here, and let me start with the first one. Speaking on the cost side, cost of goods now, are we like, you know, still maintain our double-digit increase in terms of cost per hectoliter, for full Q? I know it's still, it's a bit early, but, like, you know, based on the current trend, you know, with like some of the commodity price coming down, what is your expectation in terms of like, you know, the cost per hectoliter for year 2023? Like, you know, given that, you know, cost like, you know, if we look at the packaging cost like glass, aluminum, you know, I think the trend has been coming down globally.
In addition, what is your outlook for barley in your view, in the upcoming harvest? Thank you.
Thank you, Anne, and good afternoon. Thank you for your questions. Let me pass this question to Iggy as well to answer.
Sure. Thank you. Thanks for the question, Anne. Maybe let me start with 2022. Year to date, you know, cost on a per hectoliter basis actually increased less than double digits. It actually increased by 8.5%. If we look at Q3 specifically, it would've increased by 7.4%. As you're aware, this is partially driven by our hedging policy. Again, we designed it to provide us a 12-month rolling horizon. Of course, we have flexibility in exceptional circumstances, but given it reduces the volatility in input costs, it allows us to better manage them. That's basically the story here actually.
While we don't give a specific guidance on our Cass on a per hectoliter basis, we did share on several occasions that we expected commodity escalations to be most pronounced in the Q2 and Q3s of this year, and then to normalize a bit more in the Q4 , more similar to Q1 this year. Again, given commodities can represent between a third or two thirds of our cost on a per hectoliter basis, if we were not to take any actions, you could have expected cost per hectoliter to increase by about 10%-15% in the Q1 and about 15%-20% in both the Q2 and Q3s.
If you recall, actually our cost per hectoliter increased by 6% in the Q1, 12.3%, if I recall correctly in the Q2, and 7.4% in the Q3. It was actually a bit better than the straight translation of commodities into our Cass. And this, of course, is the impact of those continued cost management initiatives that we execute, but as well in Q3 in particular by the operational leverage improvement we had in APAC East with that significant industry recovery in the quarter that we discussed earlier. If you look at the rest of the year, commodities specifically in the fourth quarter look to be more normalized. Again, should be a bit better than Q2 and Q3 and more in line with the Q1.
Going back to Cass on a per hectoliter basis for 2023 in this case, we could expect a continued escalation in commodities given the market rates actually in 2022 year to date have been higher than those of 2021. However, to a much lesser magnitude, right? As the year-over-year escalation has been more muted. If you look at current spot pricing, to your point then, supports that. For example, last quarter we would have discussed the retreat in aluminum, right? From a $4,000 per metric ton peak back to around $2,400 per metric ton if I recall correctly.
Actually pricing has been fairly consistent, you know, at or below this level over the past few months, you know, closer to $2,300-$2,200 per metric ton. Barley on the other hand has been a bit more volatile, and this has been driven by unfavorable weather as well as an overall malting barley acreage reduction in the market. Of course this is where global sourcing flexibility goes a long way towards helping us to quickly adjust sourcing origin, which proves very helpful in terms of managing Cass and reducing any risk of supply security. Just as a reminder, of course, malting tends to be done locally, which also helps to reduce volatility. We don't see any raw material cost increases again as a structural headwind, but a temporary one.
We do see a more muted escalation next year. Either way, you know, given the hedging policy and the approach we take to managing Cass, we continue to look to mitigate any cost related risks with other initiatives beyond purely cost ones, right? In addition to that, we'll continue to work on premiumization and revenue management as a hedge for any additional increases we'll see next year. I hope that answers the question. Thank you so much, Anne Ling.
Thank you. My second question here is about China. Is it possible, like, you know, to share with us, like, you know, some of your key brands' performance?
Thank you, Anne. Let me maybe start by talking about Budweiser then. I mean, as you know, Budweiser is about half of our total revenue in China. And even if it's, you know, by far the number one premium brand in China, we still see a lot of growth potential, right? For example, in expansion, because it's well below 50% distribution coverage today in China. If you look at Q3, the last quarter, Budweiser grew low single-digit revenue versus last year, mid-single-digit revenue versus pre-pandemic level. That's despite all these channel closures and geographic impacts in our key regions. Additionally, interesting to note as well that we have three significant innovations on Budweiser in terms of occasions.
We have Budweiser Supreme, Bud Light in Guangdong, and Budweiser Magnum, and all of them continue to grow double digits in the quarter versus prior year. As I was mentioning earlier, we also are very excited with the FIFA World Cup campaign, plus the earlier Chinese New Year we expect in Q4, and the impact of the campaign to feed into Q4. You know, this campaign should help us as well continue to do well on Budweiser. On the super premium, the top brands there also grew mid-single digits versus last year. That's despite having an even higher weight in the nightlife channel for these brands than Budweiser has.
Interesting there is that also our fruity innovations because we launched both fruity innovations on Hoegaarden and Corona to target the consumer trend of the SHEconomy. Actually these innovations also grew double digits versus last year. Corona, this is a Sea Salt Guava variant, the Pineapple Calamansi variants, oriented to the female target audience. On the Hoegaarden, these are the fruity variants. These fruity variants, they are now already more than 10% of the Hoegaarden brand volume, as we speak in China. This just to give you some taste of the different brands in China. Thank you for your questions.
Thank you very much. I'm sorry that I cannot join to your upcoming investor day in Korea. Definitely hope to meet up with you next time in the future events. Thank you.
Yeah. Thank you, Anne. As you know, it's a hybrid event, so even if it's difficult to travel, we understand that and/or anybody from the team is welcome also to join in a hybrid way.
Yes, I definitely will. Thank you.
Thank you, Anne.
Thank you. Our next question is from Liv Liu, Goldman Sachs. Please go ahead.
Thanks a lot. Can you hear me?
Yes, we can, Liv. Good afternoon.
Good afternoon, Jan and Iggy. This is Liv from Goldman Sachs. Hope you are both doing well and looking forward to seeing you both in Seoul soon. I also have two questions, and I'll ask one by one. Firstly, on China. We noticed some channel feedback recently actually on the price hike actions to some SKUs. I think also applying to multiple brands under [ AB InBev]. Would you please help to share some color on any upcoming and recent price actions in Q4 and potentially for next year? And how do we look at our pricing trend in Q4 for China? Thanks.
Sure. Thank you, Liv. Thank you for your question. You're right. We just announced that first of November, we will plan an increase over our prices for both the premium and the super premium segments in China. This will benchmark the CPI on an average level, I would say across channels and brands. For context, right, we have typically historically led the segments that we lead in terms of price increase. This November, we will do the premium and the super premium segments. Historically, we have taken the core and value segments in the month of March or April, so pre-summer. The last time we did it was mid-single digits.
Of course, I always give the context that for China, rate increase is only a small part of our revenue per hectoliter contribution. The primary driver, of course, should continue to be the top line growth, that is driven by premiumization, so driven by mix. Thank you for your question and that's accurate, Liv.
Sure. Thanks a lot. The next question is Korea. We are really encouraged to see the strong recovery and also the on-premise volume have been growing much faster. Would you please share some color on the competition dynamics in the H2, especially in the on-trade channels? How do we handle the potentially intensified competition in trade channels while there's strong recovery, and how do we cope with this marketing investment facing the H2 and in next year? Thank you.
Sure. Thank you, Liv. Yes, in South Korea, we are quite excited with the performance the team has been driving there. We achieved share gains both in the on-premise and the in-home channels, and of course, overall as well. It's really been led by the success of our recent innovations. If you look at All New Cass, for example, in the on-premise, our volumes have grown double digits, strong double digits, led by strong performance of Cass, on the one hand, but also Hanmac, which is the third biggest brand in Korean restaurant channel.
In the in-home channel, we've seen a successful execution of our OBPPC strategy that I was alluding to earlier on Cass, which were launched in Q2 last year, but they continue to deliver incremental market share gains in the in-home channels. Overall industry, just wanna reiterate that, yes, there has been a significant recovery already, but we are still below pre-pandemic level at the industry level in terms of recovery. We remain optimistic about further improvements in the future. Thank you, Liv. I'm looking forward to seeing you in South Korea.
Great. Thank you so much.
Thank you.
Thank you. We have time for two more questions. Our final two questions will come from the line of Melody To, CICC. Please go ahead.
Hi, Jan and Iggy. It's Melody Elan To from CICC Food and Beverage team. I have two questions, and I'm going to ask them one by one. The first one is about China new brewery. Could you please share us the purpose of opening the new craft brewery in Fujian? This is my first question. Thank you.
Sure. Thank you, Melody, and great to hear you again. Good afternoon. We actually did two things in Fujian in the last couple of months. We just mashed in. Let's say we kind of started using the capacity expansion that we announced last quarter or a couple of quarters ago in Fujian. This extra 2.5 million hectoliters that we just started using in Fujian helps us to drive the growth of our premium, super premium segments and brewing in that part of China, and of course continues to make Fujian the largest brewery in Asia from a beer point of view.
The second thing you're right is that it's actually driven by our craft brand launch, which I was happy to hear Chen Luo advertise a little bit earlier because we're also quite excited by this new brand. It's called 059 Coastline. This craft brand, 059 because that's the zip code of Fujian, and then Coastline because of course, Fujian has a beautiful long coastline. It's very known, very well known across China for the beautiful coastline. It kind of fits well to be inspired by the Fujian province. We use local ingredients, as I was mentioning earlier. Actually, today we just won our first medal with the Da Hong Pao tea infused beer, which is quite innovative. There's not many beers around the world even that are infused with real tea.
The Da Hong Pao tea from Wuyi Mountain is quite famous across China and even worldwide. We are very happy to work together there with the local tea growers or tea farmers and won the first gold medal in a Japanese beer competition. Beyond that, what is interesting to know as well is that the brewer there is a female brew master that actually comes from that area, from Wuyi Mountain. It's quite nice as well to see the inspiration being led by the local team who wants to innovate and use all the local ingredients. We got a very good first reaction from consumers there in the last three or four months.
The brewpub that we opened linked with the brewery is already quite a hot place to visit. We expect it to attract a lot of visitors from within Fujian, but also outside of Fujian. It's a beautiful province to discover. The capacity will be up to 100,000 hectoliters, which is quite a sizable craft brewery, because we expect this part of China to continue to grow strongly in double digits growth from a craft beer perspective. We expect to continue to drive new offerings and be close to consumer interests. As you know, in the super premium parts, people want more offerings to continue to have new experiences and innovations, and that's what we will offer with 059 Coastline there.
Thank you for your question.
Well, thank you so much. It sounds pretty good, and I can't wait to visit it. My second question is about India's performance, because so many of our institutional investors are so surprised about it, such a great performance in India. Given our successful performance in India, do we expect our strong growth in terms of volume and revenue to continue in India?
Yeah. Thank you for that question on India, Melody. We're quite excited with our business in India. Q3, we saw strong volume, revenue and EBITDA growth, all driven by premiumization and also industry recovery with an increase in consumer demand. Maybe first point to share on India is that we are very excited and optimistic about the long-term potential of India, because of course they have a demographic advantage, right? There is not many countries around the world with well over 1 billion potential consumers. But also the growing prosperity as you know, the Indian economy just became the fifth largest economy in the world, and I think most analysts would expect it to become a top three economy in the next 10 years.
The premiumization trend is very obvious in India as well. If you look at our portfolio, we are basically very well positioned with premium, super premium there. If you look at the Q3, just to give you an idea of the growth we have there, premium, super premium doubled versus last year in the Q3. It's not just double-digit growth, it is a doubling of the total size of the segment of our brands in the premium, super premium segment in India. The volume weight within our total portfolio, of course, continues to increase in India as well for premium, super premium. If you compare to pre-pandemic level before 2020, right?
If I compare to 2019 Q3, premium, super premium grew strong double digits, as well. Budweiser is the number one premium brand in India, continues to outperform the industry, increased share in India and it actually made India now the top five market for Budweiser globally within the total ABI global footprint. I can tell you the India team is quite ambitious to continue increasing that rank, in the next coming years. Next to Budweiser, the team is already also seeding the company in the super premium brands. We localized Corona and Hoegaarden brewing a couple of years ago, which allowed us to go to more, let's say, attractive price points for the consumer because there is no longer this import tax to be paid on these brands.
Since then, Corona is now available in over 15 states in India. We also see a big opportunity for wheat beer. We launched Hoegaarden flavors as well very recently with rosé and nectarine. Combined with a couple of local craft brands that we launched, we believe that this will continue to drive super premium growth as well, even if it is relatively nascent there. You can see us basically copy the moves that we did in China several years ago. We basically use the same playbook in India, and we're very excited with that. Also there in India, it is a smaller part of our business, so we typically don't cover it a lot in our quarterly updates. We'll try when we see you in the-
In South Korea, to cover a little bit more in our Investor Day about the longer term potential of our Indian business, which I think can be quite exciting as well to cover in a little bit more detail. Thank you for your question, Melody.
Well, thank you so much for your detailed answers. I really hope I can meet you in Korea Investor Day if our policy permit it. I'm very looking forward to have a Investor Day in Mainland China in the near future. Thank you so much again, and I hope you have a nice day.
Thank you, Melody. Same to you. Look forward to seeing you.
This concludes our Q&A session today. I would like to turn the conference back over to Mr. Jan Craps for the closing remarks. Please go ahead, sir.
Thank you, Anna. In closing, I would like to officially, like, formally invite all of you to our very first Investor Day since the IPO, which will take place on December 1. It will be hosted on a hybrid format, so both physically in Seoul, South Korea, but also virtually via live streaming. You can contact our IT team or find more information on our Budweiser APAC website, where you can find all the details to register. Thank you again for joining us today for the call, and I look forward to speaking to all of you again very soon. Thank you.
This concludes today's results call. Please disconnect your lines. Thank you for participating.