Carlsberg Group reported mixed results for the third quarter in 2024, reflecting a tough consumer environment and adverse weather impacting volumes and sales. The world's third-largest brewer saw organic volume growth decline 0.2%, while organic revenue rose 1.3% to DKK 20.5 billion (USD 2.99 billion), slightly below the DKK 20.7 billion (USD 3,01bn) expected by analysts.
The quarter was marked by a 1.3% drop in overall beer sales, with notable declines in key markets such as China, France, and the United Kingdom. Organic volume in Western Europe edged up 0.1%, while Central & Eastern Europe and India (CEEI) showed resilience with a 5.2% increase. In contrast, Asia experienced a significant 5.2% decline, driven primarily by weak consumer demand in China.
Premium beer, a long-time driver of profitability, faced challenges with a 0.5% drop in organic volumes. This decline comes as more consumers opted for more affordable alternatives. CEO Jacob Aarup-Andersen noted, “In Western Europe, there's no doubt that the average consumer is holding back. In Asia, China stands out as a market where the consumer is very weak. Most other Asian markets are actually okay.”
Despite these pressures, Carlsberg's alcohol-free brews and non-beer categories performed well, posting 6% and 10% organic volume growth, respectively. Soft drinks also showed a 4% increase, signaling consumer interest in diversified beverage options.
In response to shifting consumer preferences, Carlsberg is realigning its marketing approach. “We are reallocating some of our focus into promoting the right mainstream brands in markets where premium is under significant pressure,” Aarup-Andersen said. This pivot highlights Carlsberg's flexibility in adapting its strategy while still maintaining confidence in the long-term growth potential of its premium offerings.
Despite broader premium struggles, Carlsberg’s international premium brands performed well:
- Carlsberg: +11% (in organic volume)
- Brooklyn: +9%
- 1664 Blanc: +8%
- Tuborg: +2%
- Somersby: +2%
These gains indicate that while the premium category faced headwinds, selective brand strategies paid off.
Carlsberg maintained its full-year forecast for 4-6% organic growth in operating profit before special items. However, a translation impact of around DKK -300 million is expected for 2024 due to currency effects. Reported revenue growth reached 0.9%, impacted by currency fluctuations and acquisitions.
Despite the challenging environment, Carlsberg's strategic focus on premiumization and cost management positions it to weather economic uncertainties. The company's share price showed resilience, up 1.7% at market open, though still near its lowest since April 2020.
Carlsberg's strategic expansion continued with the anticipated closure of its acquisition of Britvic plc, expected in Q1 2025 (inside.beer, 27.8.2024). The company also announced plans to take over the Pepsi bottling franchise in Kazakhstan and Kyrgyzstan by January 2026, extending its partnership with PepsiCo (inside.beer, 12.9.2024).
CEO Aarup-Andersen concluded, “We are pleased with the development of key growth categories, such as alcohol-free brews and Beyond Beer. While it was a tough quarter, we continue to adapt and find growth opportunities in a challenging landscape.”
Carlsberg’s Q3 2024 results underline its adaptability and strategic resilience, preparing the brewer for continued growth amidst ongoing global uncertainties.
