Anheuser Busch's CEO On Hard Seltzer: 'Gift For The Beer Industry'

Seltzer is among the fastest-growing categories within the beer, spirits and wine category and should continue growing at a double-digit pace in 2021, Anheuser Busch Inbev SA BUD CEO Michel Doukeris said Wednesday on CNBC's "Closing Bell."

What Happened: Ab-InBev launched Cacti Agave Spiked Seltzer this week — a new lineup of seltzer drinks.

This complements existing products including Bud Light Seltzer, Bud Light Lemonade and Michelob Ultra.

Cacti stands out from its sister brands as it contains more alcohol, and as the name implies, it is made with pure agave from Mexico, the CEO said.

The brand is backed by rapper Travis Scott, who even directed a commercial for the drink that was shown during the Grammy Awards show.

"He was super hands-on on the development of the product itself — the flavors, the logo," Doukeris said.

Related Link: Morgan Stanley Cheers Boston Beer Company And Its 'Compelling Long-Term Growth Story'

Why It's Important: One might assume that sales of seltzer are cannibalizing beer sales, but this is not the case for Ab-InBev.

In fact, seltzer is a "gift for the beer industry" after the total volume of beer shipped steadily declined from 2010 through 2019, Doukeris said.

"We've been seeing the last 12, 14 months, the beer industry overall growing, driven by seltzers, but because seltzers are in the same aisle and same stores as beer, people are going back to beer, as well," he said.

What's Next: Retailers that received an inventory of the Cacti Agave drink "sold out on day one," Doukeris said.

Ab-InBev's online channel also ran out of supply, and he said management is doubling-down on production and delivery initiatives.

BUD Price Action: Anheuser Busch shares were trading down 1.19% off the open Thursday at $63.07.