Heineken reported weaker-than-anticipated beer volumes for the third quarter, impacted by challenges in the Americas and Asia-Pacific regions. The Dutch brewing giant announced on October 23 that its beer volumes increased by just 0.7%, missing Bloomberg's forecasted growth of 2.02%.
A key factor contributing to the shortfall was sluggish consumer spending in the US, which has pressured Heineken’s sales. Despite these challenges, the company reaffirmed its full-year operating profit outlook, which it expects to grow between 4% and 8%.
Adverse summer weather in Europe also hampered growth, preventing brewers from capitalizing fully on major sporting events that usually draw crowds to pubs and bars, leading to underperformance in volume growth.
Heineken, known for its vast portfolio of over 300 brands including Amstel, Red Stripe, and Sol, has ramped up its marketing investments in major markets and continued to promote its zero-alcohol Heineken 0.0 beer. Sales of the non-alcoholic variant saw a 3.4% rise in the quarter, with significant gains in Brazil, the US, and Vietnam.
Currency devaluation in key markets such as Nigeria has also posed challenges for Heineken, affecting sales. Nonetheless, the company has stated its commitment to the African market, where it has seen growth in volumes, even as competitor Diageo moves to sell its stake in Guinness Nigeria.
In the Americas, while growth in Brazil provided some support, the brewer experienced declines in Mexico and the US, where a 1.3% drop in volumes was partly offset by strategic price adjustments. In the Asia-Pacific region, beer market contractions in Cambodia, driven by strong local competition and promotions, offset stronger performances in India and Indonesia.
Jefferies analysts noted that Heineken could still achieve profitable growth while enhancing capital efficiency. They expressed optimism, suggesting that investor sentiment might remain positive thanks to the company’s reaffirmed guidance and steady results.
