Comment - Africa Gleams for Heineken as Mexico Seeks Spark
Heineken can largely thank Africa for the surprise rise in sales in the third quarter of its fiscal year, with the much-vaunted FEMSA Cerveza business in Mexico a late developer.
Mexico is a slow-burner for Heineken. It is more than a year since Heineken acquired FEMSA Cerveza and the brewer is still finding its feet in the market. Group volume sales in the Americas rose by just 0.4% in the third quarter of 2011 (albeit curtailed by decline in the US rather than merely sluggishness in Mexico).
On the positive side, though, Heineken has appointed a new MD of its Mexican operations and, according to group CFO Rene Hooft Graafland, the firm has stemmed - though not entirely stopped - the loss of market share to its rival, Grupo Modelo.
If Mexico is for the future, however, then Africa is proving a powerhouse for Heineken volumes in the short-term. The region produced the standout result of the quarter, with Heineken's volumes up by 12% for the three months to the end of September. Over the first nine months of the year, group volumes in Africa rose by 16%.
One can near-enough halve these increases if the extra contribution of acquired breweries in Nigeria is excluded. Nevertheless, it seems that Jean-Francois van Boxmeer had a point when, in an interview with just-drinks earlier this year, he described Africa as the real jewel in Heineken's crown.
Growth in Africa helped to feed positive reactions to Heineken's results statement today (26 October). The brewer reported a 0.6% net sales rise for the three months to the end of September, to EUR4.6bn (US$6.4bn), despite concern among analysts that sales would drop.
Third-quarter volumes fell by almost 2% in Western Europe, not helped by grim summer weather, but this region's fragility is no longer a surprise. In truth, many were expecting worse.
Without creating too much fuss, Heineken is getting the job done in 2011.
Anheuser-Busch InBev has squeezed Heineken out of the Dominican Republic via its deal to gain control of the country's largest brewer, Ceverceria Nacional Dominicana (CND)....
Heineken has lined up the creation of a sales business development role in the US....
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