You go from there. We are not talking Kona, Stella, brands that are fighting and growing very well as well. So our entire strategy in the U.S. is about portfolio rebalance, and those are the brands that are making a huge contribution for us regaining momentum. And of course, for our portfolio to be more aligned with all trends that we have all there. When you go to ready-to-drinks, I think we saw this before, cut water neutral they continue to grow strongly. We are today just 1% on this spirit industry, but we account for roughly 15% of the dollar growth both brands are in the top 10 growing spirits brands in the U.S. And both brands are already part of the top-ranked brands in dollar sales in the U.S., Cutwater still ahead in terms of position bigger than Nütrl, but neutral growing triple digits and quickly moving up.
And if you look as a company, as a matter of fact, quarter 1 dollar growth in spirits, AB was top three in terms of dollar growth, as I said, two brands, 15% of the total dollar growth in the U.S. And this contributes, of course, to this portfolio rebalancing. So all-in-all, excited with the momentum behind our brands. As you mentioned, there are Michelob ULTRA, Busch Light, Nütrl, Cutwater, all very strong growth with Michelob ULTRA and Busch just hitting all-time high market share for both brands in the last few weeks. Thanks for the question.
Operator: Thank you. Our next questions come from the line of Trevor Stirling with Bernstein. Please proceed with your question.
Trevor Stirling: Hello, Michel and Fernando. Two questions from my end. First one, I noticed that you referred to mega brands rather than global brands, Michel in the presentation. Does that reflect a change in thinking in terms of how you classify and how you apply that thinking per market? And second question on Mexico. I think you mentioned mid-single-digit volume growth slightly benefiting from the timing of Easter. Does that imply a market that’s really doing very nicely low single-digit volume growth, stable share and solid price mix?
Michel Doukeris: Trevor, good afternoon. Thanks for the question, Michel here. First point, mega brands, we were together in Mexico, and we talked about our portfolio strategy and the relevance of our brands, both at the global level but also at the local markets. And as we are now reporting quarter one, we are incorporating the discussions we had with investors and analysts in Mexico. And we thought that would be good to give you some visibility around this portfolio play and the weight of these brands globally. Those brands are like three to five brands in each market. Part of these are our global brands as well because you have very strong champions, billion-dollar brands. When you combine these mega brands, our majority of our volume above 50%, but they are the spearhead of this efficient organic growth that we are pursuing.
And as we invest in these brands as we sharpen that positioning and we align these brands with the key consumer trends, they respond very well. So they are leading the growth with this 6 plus revenue growth in the quarter one, and we will continue to update you quarter-on-quarter on the development of these brands. Similarly, we will continue to highlight the results of our global brands because they are very important brands in this context, and they are the brands that when you look in a consolidated way, they continue to lead our growth most importantly, one in this quarter in terms of performance. Corona, double-digit growth, very strong momentum across many main markets and now combined with the launching and expansion of Corona Cero, we are seeing a lot of good momentum building towards the summer.
When you think about Mexico, Mexico continues to be very health markets. We see volumes in the quarter one developed very well. You had this shift in terms of calendar with Easter more into the quarter one. Nevertheless, even without considering this week of Easter, the overall market was very healthy, and the underlying demand for our brands remain very positive. So we continue to be very positive about Mexico is number two market for us within the number one zone in terms of growth and continues to perform very well.
Trevor Stirling: Okay. Thank you.
Operator: Thank you. Our next questions come from the line of Priya Ohri-Gupta with Barclays. Please proceed with your question.
Priya Ohri-Gupta: Good morning. Congratulations on the quarter. And appreciating you taking the question. I think first off, Fernando, I just wanted to go back to your dynamic capital allocation model. First, with regards to some of issuance and tender activity that you undertook already year. Is our working assumptions supposed to be that sort of that action should be essentially gross debt neutral? And then following that, as we think about sort of deleveraging as remaining the priority, which you underscored in your prepared remarks, should we be expecting gross debt reduction to continue over the back half of the year given the seasonal cadence of your free cash flow and what we’ve seen in the last couple of years? Thank you.
Fernando Tennenbaum: Hi, Priya. Thanks for your question. Actually, the issuance is probably less to do with the dynamic capital allocation and more to do with managing our debt portfolio. Because as you said, it’s gross debt neutral between the debt that we have maturing this year already and the $2.5 billion that we redeemed, it’s kind of neutral. And then kind of as the year goes by and we continue to generate cash then the capital allocation is going to come into play. And I want to decide what is the best approach, if we continue to further reducing debt, dividends or any other form. But the ongoing assumption and that assumption that we’ve been working from the last few years is that we should have some debt pay down every given year. So we should be continuing to work along these lines. So no change in here.
Priya Ohri-Gupta: Okay. Thank you. And just one follow-up on how we should think about share repurchase activity going forward now that you’re prior program has been completed, and you did the incremental $200 million directly with the – with Altria. Thank you.
Fernando Tennenbaum: Deleveraging still remains a priority, given how the business performs, we remain confident in our ability to develverage. When you think about capital allocations, the objective is always to maximize value creation to shareholders, and we’ll be very disciplined about capital allocation this year. We don’t have anything to share different than that right now. But of course, every quarter, every moment, we are looking from these dynamic lenses and we make the decisions accordingly.
Priya Ohri-Gupta: Thank you very much.
Operator: Thank you. Our next questions come from the line of Edward Mundy with Jefferies. Please proceed with your questions.
Edward Mundy: Morning, Michel, morning, Fernando. I have two, please. So on Slide 17, you have a bullet around category participation, which I think was stable last year, but it’s up 40% in your markets this year and some of the increases were led by female consumers across LatAm and Europe, which I think is a heavy grail of beer. So what are you doing differently? What are the early learnings? And do you think this could be sticky? And then second of all, on Slide 24, you grew EBITDA margin 90 bps in the first quarter, but it’s still quite a bit below your peak. Could you remind us about how you get to the high watermark? Or how do you think about getting back to the high watermark for margins, in particular, as your mega brand strategy at least for the more efficient growth?
Michel Doukeris: Hi, Ed, Michel here. Thanks for the question. I’ll take the first part and Fernando can comment a little bit more on the margins. All five levers on how we look at the category and how we think that the category can be further developed are very important for us. And of course, participation is positioned as we shared with you always as the first lever because it is very important to keep an eye on participation and making sure that as we work with our brands as we work with innovation that can be either liquids or packaged we are always moving towards getting consumers to be in constant touch with our brands and enjoy the category across occasions that are relevant to them. And as we do that more specifically on your question, and beyond beer smaller beer package and premium propositions such as Corona, they tend to be more correct and therefore, they participate in more occasions that are relevant for female consumers.
And this is one of the reasons why beer continues to gain share of growth in many, many markets. So we know that as we offer more premium propositions and this can go from Corona in many markets to less in Europe, and then we go to propositions such as Brutal Fruit in Africa or Cutwater in North America, we see that we gain participation with a different cohort of consumers. And this is all incremental. There is a lot of incrementality when you tap into this pool for our portfolio and for the beer category. We are tracking this now globally for a while, and we’ll be able to update you as we are doing now. So 40% of our markets, which is a big amount of markets for the quarter one showed positive results in participation. And I think that will continue to drive this and to compete in different occasions and with different consumers, while we will continue to offer strong propositions for our current consumers with our mega brands.
Thank you.
Fernando Tennenbaum: And Ed, Fernando here, on your second question, Yes, our margins expanded 90 basis points and they grew in four out of our five operating regions. But indeed kind of if you look over the last several years, EBITDA margin has contracted and it was mostly driven by variable cost escalations, mostly linked to transactional effects and the record high commodity prices, which we’ve been seeing and it being meaningfully ahead of the local CPI on the markets where we operate. We said before that none of these headwinds are structural and the fundamental drivers of our industry leading margins, they remain intact. We have – I think at a few, we have iconic mega brands. We have our unique global footprint. We have the meaningful leadership positions.
We have an efficient operating model, and we have the financial discipline and ownership culture. Even though commodity and effects are improving, on historical levels, that is still at a quite high level. So that creates further opportunities. But regardless of that, we are controlling what we can control. And a good example of that is if you look, we were quite efficient on our SG&A line, which allow us to look at costs, all the expenses and making sure that we save on the things that don’t create value, and we are able to invest and keep investing to sales and market in the moneys that consumer facing and that can help drive volume. We don’t have any outlook for that. We have an outlook for CapEx. So you see that this year outlook for CapEx is smaller.
It’s a lower CapEx expansion comparing to the outlook for last year. But we are applying the same mindset for all the lines in our P&L to continue to drive efficiency. So definitely room to improve, but we’re not giving any outlook on how and when. Thank you.
Edward Mundy: Thank you.
Operator: Thank you. Our next questions come from the line of Simon Hales with Citi. Please proceed with your question.
Simon Hales: Hi, Michel. Hi, Fernando. Can I just come back to the U.S., please, Michel and ask you a little bit more about the shelf reset situation, so you’re one of your big competitors has talked about this a lot over the last sort of few quarters. Back at the full year, Michel, I think you were indicating around 55% of retailers had announced their resets at that point. Where are we now? What proportion have been executed? And are you still losing, I think you talked about 7% to 8% of facings when those resets are going through now in the spring?
Michel Doukeris: Hi. Good morning, Simon. Thanks for the question. Situation, I think that just like to piece together the two or three less times that we talk about that. So at the end of the year, 15% of the retailers did the usual fall reset. As we talked about, the full year results and connecting it now, we were at 50% announcement. Now, we pretty much everybody already completed the work. And as we track that, we see that majority of the retailers have already implemented. So it’s north of 50%, not everybody at but north of 50%. The situation as everybody completed the work changed very little, so actually improved a little bit on our direction. So a smaller share of phases now that we are losing, but it’s still in the range to simplify the life to you one out of 20, let’s say, 1.5 out of 20.
