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Heineken Reports Steeper Than Expected Decline In Sales In Third Quarter

Heineken, the world's second-largest brewer, reported a steeper than expected decline in third-quarter beer sales after COVID-19 restrictions depressed volumes across Asia.

The Dutch brewing giant said it sold 5.1% less beer on a like-for-like basis than a year earlier, with Asia-Pacific sales down 37.4%.

Europe reported a 2.3% decline in the quarter, with the Americas region down 3.4%. Africa, Middle East & Eastern Europe was up 5.5%.

'Resilience And Solidarity'

"As anticipated, our Asia Pacific region was deeply impacted by the pandemic in the third-quarter," commented Dolf van den Brink, Heineken chief executive. "We see the first signs of recovery and I admire the resilience and solidarity of our people as we navigate these challenges."

The maker of Europe's top-selling beer, Heineken, along with Tiger and Sol lagers, retained its forecast that full-year results would be below those of pre-pandemic 2019.

In the first nine months of the year, beer volumes were up 4.0%, the brewer said.

Heineken volumes were up 8.0% in the third quarter, and up 15.1% for the first nine months of the year, it added.

Performance In Europe

In terms of its European performance, the group said that its off-trade business declined by a high-single digit in the quarter, returning to 2019 levels. In the on-trade, beer volumes grew by high-single digits, however on-trade performance was still well behind that recorded in the corresponding period in 2019.

"The macro environment remains volatile and we are responding accordingly," said van den Brink. "We are taking an assertive approach to pricing and cost across all of our markets to meet this challenge. Therefore, our expectations stay unchanged, with full year results remaining below 2019."

In June, Heineken announced it was taking control of United Breweries, India's largest brewer, while more recently, the drinks brand announced a tie-up with actor Daniel Craig to coincide with the launch of Bond film No Time To Die.

Analyst Viewpoint

Commenting on the group's performance, Holly Inglis, beverages analyst at GlobalData, said, “Heineken’s favourable 8% growth in beer volume shows the pure strength of the brand, as overcoming the global downturn of beer sales is no mean feat. GlobalData notes that global beer volume declined by 5.1% YoY in Q3 2021. Considering this quarter historically sees high beer consumption due to summer and holiday trends, a weak overall performance indicates that COVID-19 strains are still present across the globe.

“In the long-term, the global beer market has a long way to go if it is to recover from the heavy losses witnessed in 2020, with COVID-19 fuelling many declines, and refocusing consumers’ demand towards products that are more beneficial to health.”

News by Reuters, edited by ESM. For more Drinks news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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