Alongside our daily news coverage, features and interviews, the Just Drinks team rounds up the week’s top stories with a series of data snapshots.
This week Heineken noted damp consumer confidence in Europe as it released its first-quarter results, while Nestlé announced plans to launch Nespresso coffee in India.
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In the US, Hawaiian rum producer Kuleana Rum Works touted the potential for premium rums while PepsiCo’s volumes continue to falter in the country.
PepsiCo US woes continue
PepsiCo’s North America drinks volumes slid in its first quarter but CEO Ramon Laguarta this week insisted he was “feeling good” about potential for margin expansion and profitable growth.
The Mountain Dew brand owner’s PepsiCo Beverages North America (PBNA) division saw volumes fall 5% in the opening quarter of the financial year, following a weak finish to last year.
Speaking to analysts during an earnings call this week, Laguarta hinted at potential disposals to ensure profitability.
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By GlobalData“We’re making choices in PBNA in terms of making sure that we deliver profitable growth... emphasising the parts of the portfolio where there is a better return on the investments for us and eliminating those parts of the portfolio where the margins are not that attractive and they’re going to get probably not that better over time,” he said.
“So we’ve been referring to categories like packed water or some of the less profitable take-home formats, where we will be making choices.”
India's coffee growth led by iced coffee and RTDs
India's thirst for coffee is set to be driven by a taste for iced-coffee and coffee-RTDs, analysts predict.
While instant coffee remains the largest segment in volume and value, iced coffee and RTDs are set to see double-digit CAGR growth in 2028, according to analysis from GlobalData, Just Drinks' parent company.
This week, Nestlé touted the category's potential for growth in India due to a “discernible trend towards in-home consumption” and a “growing young population that has exposure to global trends and is open to new experiences”.
The Swiss giant is launching its roast and ground-coffee brand Nespresso in India, starting with a core range “with the ambition to expand”.
Nestlé said India is one of its fastest-growing coffee markets. Its Nespresso range will be available in e-commerce channels and a branded “boutique” in Delhi. Further bricks-and-mortar stores are planned for other Indian cities.
Nespresso coffees and machines will be available (both the brand’s at-home design and its professional machine) by the end of 2024.
US rum sales continue volume, value decline
Sales of rum are declining in the US in both value and volume, according to figures from the country’s National Alcohol Beverage Control Association (NABCA).
The NABCA data, which covers 17 states and jurisdictions in the US, showed rum volumes (sold in nine-litre cases) declined 4.8% in the 12 months to February to 5.26m cases. By value, sales declined 1.5% $831.73m.
However, speaking to Just Drinks this week, Hawaiian rum producer Kuleana Rum Works said the ‘super-premium’ rum category – including bottles with an RRP of $30 and above – was “blowing up, just like Tequila did before”.
Kuleana Rum Works is crowdfunding $1.23m to boost its sales and marketing presence in the US and expand internationally.
CEO and founder Steve Jefferson said: “A very tiny percentage of rum is super premium, so there’s a lot of room for growth and it’s growing really quickly.
“People want good stuff and they want great stories and they want excellent products. And we’ve always been committed to no colours, no flavours, no sugars, no additives – something which is actually fracturing the Tequila world right now as people are learning about additives.”
Citing data from Diageo, Kuleana’s fundraising page highlights the super-premium rum category saw a CAGR of 27% in the US between 2016 and 2021.
Consumer confidence dampen Heineken beer sales in Europe
Gloomy consumer confidence influenced Heineken’s beer sales in Europe in the first quarter of 2024 but the beer major has predicted an uptick in Q2.
Speaking to investors following the release of its Q1 2024 results this week, CFO Harold van den Broek predicted confidence would improve in the next three months as wage increases kick in.
However, he added: “It’s to be honest quite sobering to see that we’re just above the 2008 crisis in terms of consumer sentiment.”
Net revenue in Europe grew by 0.4% organically in the quarter while volumes rose by 1.6%. Heineken cited calendar events such as an earlier Easter for the boost.
Africa and the Middle East volumes are steadily declining, while both Europe and Asia Pacific saw lower volumes in the quarter compared to the same period in 2023.
