Lager sales lose fizz in mature markets

Lager sales lose fizz in mature markets

Recession has made falling demand for beer more pronounced in western markets and we can expect more cost cutting in 2010.

Heineken today predicted that it sees little prospect for a rise in beer demand in its key Western Europe markets in 2010.

Meanwhile, the group said that it sees less opportunity in the coming year for the sort of price increases that bolstered net sales in 2009.

It seems that the economic downturn, while not the cause of declining demand for beer in mature markets, has exacerbated a tough market situation.

Sluggish demand has been joined by an accelerated trend towards drinking at home, which has also helped to propagate a lower consumer spend on beer.

Brewers with higher exposure to these markets, such as Heineken and Molson Coors, have been notably more downbeat in their trading statements in the last couple of months.

A-B InBev said in January that it would cut 10% of its workforce in Western Europe, while Heineken today (23 February) indicated that it expects to reduce its workforce in 2010 - no prizes for guessing where the axe may fall, although Eastern Europe is also likely to take some of the brunt.

For 2010, expect more cost cutting and even more talk about the promise of emerging markets in regions like Africa, Asia and Latin America.

From Moscow to Los Angeles, expect a lot more focus on market share, as signalled by Carlsberg today.