Global Brewers Fare Better Than Expected Despite COVID-19

In spite of the impact of pandemic on beer sales, global brewers AB InBev (home to Budweiser), Danish brewer Carlsberg and Netherlands-based Heineken, are all reporting surprising third quarter results, just not enough to stop cost cutting.

Here’s the deal…

The ongoing impact of the coronavirus on the brewing industry has been brutal. Mandated shutdowns of bars, restaurants and taprooms have decimated businesses and severely limited beer sales for brewers big and small.

But in spite of these shutdowns, three of the world’s largest brewers are reporting better than expected third quarter results. Don’t get us wrong. Sales have slowed, just not as bad as expected.

And cost-cutting is still planned…

“Heineken’s organic volume sales fell only 1.8% in the third quarter reports the Drinks Business “but the company is still planning to slash jobs at its head office in a bid to cut costs and return to profitable growth as the Covid-19 pandemic continues to damage the hospitality sector.”

In spite of less than expected third quarter losses, widespread on-trade closures (bars, restaurants and taprooms) have hit Heineken harder than most. Net profit for the first nine months was €396 million ($510.96 million US) down more than 75% from the same time last year.

And the brewer confirmed it will cut staff costs by 20% in its head and regional offices, including the UK.

“The situation remains highly volatile and uncertain,” Dolf van den Brink, Heineken’s chief executive, said in a statement. “As we navigate the crisis, we are deliberately shaping how to adapt and emerge stronger from the pandemic.”

Anheuser-Busch fared better than Heineken…surprising analysts who had predicted 4.2% drop, with a 4% revenue growth in the third quarter…far better than expected.

At the same the global brewer has announced it will scrap its interim dividend because of the impact of Covid-19.

More in line with Heineken’s 3Q fortunes, Carlsberg reported year to year 6.8% drop in overall revenue

After posting better than expected results on October 28, Carlsberg did raise its full-year outlook, citing growth in its craft and low/no alcohol brands, which experienced revenue progress of 12% and 29% respectively.