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Summer of sport to help revive global beer sales


Written by Emma Romney

LONDON (Reuters) – Global breweries are set to sell more beer this year after several quarters of declines, helped by factors from sports and slowing inflation to weather patterns and fading boycotts.

Heineken, the world’s second-largest brewer, reported its first quarterly volume growth in more than a year in the three months to the end of March. Rival Carlsberg also reported higher volumes after several quarters of decline.

Meanwhile, Anheuser-Busch InBev reported a smaller-than-expected decline in trading volumes on Wednesday. Its sales have been hit hard by a boycott of major US brand Bud Light, but the impact is now set to ease more than a year after it began.

“We have now passed the anniversary of the Bud Light debacle, and we expect organic volume and sales growth to improve,” RBC Capital analyst James Edwards-Jones said of AB InBev, referring to the backlash from conservatives over social media promotion with… Transgender influencer Dylan Mulvaney.

Analysts on average expect the brewer to see a 1% increase in volumes over the full year, according to a consensus compiled by the company.

If AB InBev reports a return to volume growth in the second quarter, it would be the first since Q1 2023.

Brewers will also be boosted by a summer of sports, including the 2024 Paris Olympics and the 2024 European Football Championships.

Coupled with extreme weather conditions that depressed sales last year, these events should support volumes even in mature beer regions such as Western Europe, Carlsberg CEO Jacob Arup Andersen told reporters at the company’s first-quarter results.

“We expect positive volume growth in the future,” he continued, adding that Carlsberg would also benefit from higher sales in growth markets in Asia in particular.

Price dominates

The Brewers’ revenue growth in recent years has been largely driven by price increases. Volumes have declined or seen only slow growth.

Companies were forced to quickly raise prices to cover the rising costs of everything from malt to aluminum, hitting the amount of beer they sold.

Now, these cost increases are set to decline and price increases are set to slow.

“Price increases have dominated as a source of growth in the last two years… We are now in a position where we hope to see trading volumes take over as the driver of revenues,” said Berndt Maisch, fund manager at Carlsberg-based investment firm Tresides Asset. administration.

These changing trends will also help margins, said Mayesh and Sephelele Mdudu, investment analyst at Matrix Investment Fund Managers at AB InBev.

Higher volumes help margins because brewers make better use of their energy, Maisch said. Mdudu added that even if brewers sell more lower-priced beer, lower costs will help increase profit margins.

Maisch continued: In general, companies whose growth depends on prices tend to be valued less by investors. “We as investors are willing to pay higher multiples if we see volumes increase.”

(Reporting by Emma Romney; Editing by Andrew Cawthorn)



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