Research - Global beer market set for steady growth
By just-drinks.com editorial team | 27 November 2009
Results posted by major brewers in recent weeks suggest conditions are improving in the global beer market, which is borne out by a new report from just-drinks forecasting growth over the medium term.
While SABMiller posted a 6% fall in net sales to US$13.3bn for the first six months of the year, hit by unfavourable currency rates, and pre-tax profits fell by 26%, adjusted net earnings for the period rose to $1.2bn from $1.1bn last year. The first-half results were hailed by Cazenove analyst Matthew Webb as "outstanding", and showed, the analyst said, that the brewer was navigating the recession successfully.
Anheuser-Busch Inbev, meanwhile, posted a 12% rise in earnings before interest, tax, depreciation and amortisation for the third quarter to US$3.55bn, but saw beer volumes fall by 3% on a like-for-like basis in the quarter, and by 1.6% over the first nine months of the year.
Earlier in the month, Molson Coors reported a 37% increase in net earnings for the three months to the end of September to US$235.3m, up from $171.3m, but said that global beer volumes had slipped by 3% for the quarter, to 13.8m hectolitres, owing to tough global economic conditions and a strategy to put value over volume in the UK market.
Fomento Economico Mexicano (FEMSA) recorded a 46% rise in third-quarter profits to MXN3.74bn (US$280.2m), with sales up 21.4% at MXN50.65bn. Domestic beer volumes were up slightly and exports rose by 12.3% for the quarter and by 5.8% over the first nine months of the year.
The Belgian brewer, Duvel Moortgat, reported that the rise in beer sales it had observed in the first half of the year continued into the third quarter.
And even though the UK appears to be sluggish in moving out of recession in comparison with some of its peers, two UK brewers recently produced very encouraging results.
Young & Co's Brewery, the UK brewer and pub owner, reported a 1.5% increase in net sales for the first six months of the year to GBP67.2m (US$112.3m), with adjusted pre-tax profits for the half-year up 3.7% at GBP12.3m.
At Fuller, Smith & Turner, first-half net sales rose by 10% to GBP116.9m (US$194.7m), with net profits up from GBP7.3m to GBP 10.7m. Beer volumes were up by 2%, with beer sales in value terms rising by 9% to GBP49.4m for the six months.
Fullers' claim that it has "defied" the recession may be a little gung-ho but recent results do suggest that brewers are riding out the tail-end of the financial crisis well. And, according to a new report from just-drinks, beer makers can expect a relatively favourable growth environment for several years to come.
The report forecasts that global beer consumption will rise by 3.5% by 2015. The report suggests that volume increases will be concentrated in developing markets such as Asia, notably China and India, Latin America and Eastern Europe.
Moreover, the report expects the consolidation seen in the brewing sector in recent years will enhance the industry's prospects in developing markets.
"The fight for new and developing markets is being helped further by the increasing rationalisation and globalisation of the brewing industry," the report states. "Over the last couple of years alone there have been a number of major mergers and acquisitions that have changed the face of global business. Companies such as A-B InBev now have access to more markets than ever before and its portfolio of brands (from Budweiser to Brahma, Hoegaarden to Harbin) covers all the global regions."
While the report's authors note the significance of the increasing concern being expressed by governments and international organisations, notably the WHO, over alcohol-related harm, the report suggests a healthy overall prognosis in the coming few years, not least in the premium market. "Although the consumption of premium, and therefore more expensive, products has been hit short-term by the global economic downturn, the interest in this category has probably never been higher - especially in developing markets where they are seen as aspirational purchases."
There is not only strong interest in countries such as Kenya and Mexico among younger consumers in imported premium beers, but in the more mature markets of North America and the UK, "there has also been a parallel increased interest in craft brews and more esoteric imported 'world' beers", which has helped to maintain volumes in both on- and off-trade markets.
"With a likely upturn in the world economy still forecast for mid/late 2010 onwards in most economic zones there is the likelihood that premium beer will again take its place as one of the main drivers of global alcoholic volume growth," the report concludes.
This latest edition of just-drinks' global market review of premium beer provides a world outlook on the premium beer and lager sector. Looking at the major developments over the last two years, the report goes on to profile the major premium brands, the producers and markets. Historic and forecast volume data is provided for each major market.
Sectors: Beer & cider
View next/previous articles
Currently reading -
Research - Global beer market set for steady growth