Heineken warns pressure on consumer finances could impact beer sales

Heineken has posted revenue growth of 37% in its half-year results and said that it “grew ahead of the industry in more than half of our markets”.

The company recorded 24.6% organic growth in operating profit, while it generated sales of €16.4 billion, a rise of 22.4% on an organic basis.

However, Heineken said that while consumer demand has been resilient in the first half, “there is an increasing risk that mounting pressure on consumer purchasing power will affect beer consumption”.

In its half-year results, beer volume grew by 7.6%, on an organic basis. Meanwhile, Heineken posted faster growth in the second quarter, when beer volume grew 9.7%, led by strong growth in the Americas, recovery of the Asia Pacific market and the on-trade in Europe, and modest growth in the Africa, Middle East and Eastern Europe (AMEE) region. 

The brewer expects “significant inflationary pressures” on its cost base to continue to impact the second half of 2022 and into 2023.

Heineken CEO, Dolf van den Brink, said: “We are encouraged by the results for the first half of the year. We benefitted from the recovery in Asia Pacific and the on-trade in Europe as consumers returned to the bars, with demand resilient until now despite mounting inflationary pressures on consumers’ disposable income.”

He continued: “Our business performed well in the first half of 2022. We grew ahead of the industry in more than half of our markets and the Heineken brand again showed strong momentum, boosted by stepped up brand support. Our actions on pricing, revenue management and productivity offset significant inflationary pressures in our cost base. As a result, operating profit is now firmly ahead of 2019.”

“We continue to face an uncertain outlook for consumers and businesses alike. Remaining vigilant, we are fully committed to drive our EverGreen transformation for sustained, long-term value creation. In terms of outlook, we reiterate our 2022 goals. For 2023, we move from an operating margin objective towards delivering operating profit (beia) organic growth. Our medium-term aspiration remains to deliver superior, balanced growth with operating leverage over time.”