Heineken hikes beer sales but sees bigger currency hit

Heineken, now the world's second-largest beer maker, sold more beer than expected in the third quarter and retained its full-year profit margin forecast, although said the impact of currencies would be worse than previously thought.

The maker of Europe's top-selling lager Heineken, Tiger and Sol said it sold 2 percent more beer on a consolidated basis than a year earlier, with strong growth in Mexico and Asia, notably Vietnam, but lower volumes in Russia, Egypt and the Democratic Republic of Congo.

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Heineken also fared well in most European markets, due to favorably beer-drinking weather.

Heineken has now become the world's number two brewer, although the gap between it global leader AB InBev has widened after the latter's takeover of SABMiller earlier this month.

"Performance in the third quarter was robust despite strong comparatives in Americas and Europe, and a tough environment in Africa Middle East & Eastern Europe," Chief Executive Jean-Francois van Boxmeer said in a statement.

Overall beer volumes were 54 million hectolitres, higher than the average expectation in a Reuters poll of 53.1 million.

The company said it still expected its operating margin would expand by about 40 basis points over the year, slowing down following a 124 point expansion in the first half.

It did not give its margin for the third quarter.

However, it forecast an even heavier currency translation impact, now at 215 million euros at operating profit and 115 million euros at net profit level, from 200 million and 110 million euros seen before.

Source:http://www.cnbc.com/2016/10/26/heineken-hikes-beer-sales-but-sees-bigger-currency-hit.html

Brexit: Cobra beer baron Karan Bilimoria slams proposed cuts to UK immigration

British business leaders are concerned that a push to dramatically wind back immigration could seriously harm the UK economy.

Conservative Prime Minister Theresa May has vowed to reduce net migration from over 300,000 a year to less than 100,000, and introduce a controversial register of foreign workers.

Karan Bilimoria, an Indian-born entrepreneur who co-founded the Cobra Beer empire, accused the Conservatives of losing the plot, and said countries like Australia would benefit from Britain turning its back on immigrants.

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"We have the lowest level of unemployment in living memory - we have the highest level of employment in living memory, and that's in spite of having over 3 million people from the EU living and working in the UK," he told 7.30.

"What would we do without those 3 million people from the EU living and working in the UK?"

Beer cashed in on UK curry house boom

Lord Bilimoria arrived in England from India as a 19-year-old student. While studying law at Cambridge, he and a friend decided the English needed a new beer - one specifically made to drink with curries.

"Our first company car was a £295 battered Citroen called Albert, and we would drive it and sell our most expensive Indian beer," he said.

"It could take fifteen cases and if you looked down you could see the road through the floor of the car."

Cobra beer is now sold in 99 per cent of licensed Indian restaurants in the UK as well as in 45 other countries around the world.

In 2006 the beer baron was appointed to the House of Lords and in 2014 became chancellor of the University of Birmingham.

Lord Bilimoria said he got his opportunities because the UK opened up under Margaret Thatcher.

"When I came to this country as a student in the early 80s, Britain was the sick man of Europe, Britain had no respect in the world economy," he said.

"Entrepreneurship was looked down upon as second-hand car salesmen."

Now, he says, the Conservative Government is sending out all the wrong messages.

As well as wanting to cut immigration, the Government is also proposing more restrictive international student regulations.

"Instead of setting a target to increase the amount of international students, in a way a country like Australia who gets it does, we put them off and send out these negative signals," Lord Bilimoria said.

"It's just economically illiterate to do that. Australia, I know, are laughing at us.

"I've heard from senior Australian Government officials saying, 'We thank you for your immigration policies in the UK because you are sending the brightest and best from countries like India to us in Australia and we welcome them.'"

Read more at: http://www.abc.net.au/news/2016-10-25/business-leaders-say-immigration-changes-threaten-uk-economy/7959766

Boston Beer Bubbles Up Despite Another Painful Quarter

Shares rose even after the craft brewer fell well short of expectations. Here's why.

Boston Beer (NYSE:SAM) stock climbed more than 4% Friday, after the company released third-quarter 2016 results, but that doesn't mean Boston Beer was toasting its own performance.

Boston Beer's headline numbers

In fact, on the surface there was little to like about Boston Beer's report. Quarterly revenue declined 13.5% year over year to $253.4 million, net income fell 18.4% to $31.5 million, and -- thanks in part to Boston Beer's repurchase of around 807,000 shares of Class A common stock for $138.4 million during the quarter -- net income per diluted share fell a more modest 13% year over year, to $2.48.

By comparison, and though we don't typically pay close attention to Wall Street's quarterly demands, analysts' consensus estimates predicted Boston Beer would achieve higher earnings of $2.60 per share on revenue of $279 million.

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Depletions -- a key measure for how quickly Boston Beer's products travel from warehouses to consumer outlets -- declined 8% year over year, marking a negative acceleration from the metric's 5% slide last quarter. This also means that early improvements in depletions trends that management cited as of last quarter's report didn't hold for the duration of the quarter. To be fair, though, Boston Beer CEO Martin Roper did caution at the time that "it's too early to determine if these improvements are sustainable."

"Our total company depletion trends declined in the third quarter at a slightly faster rate as we lapped new beer launches from last year," explained Boston Beer founder and Chairman Jim Koch, "and we saw a further slowdown in growth across the craft-brewing industry."

Roper elaborated that depletions declines in Q3 were primarily driven by decreases in Boston Beer's flagship Samuel Adams, Angry Orchard, Coney Island, and Traveler brands, which were only partially offset by continued gains from the Twisted Tea, Truly Spiked & Sparkling varieties.

Thirsty to find growth again

So why did the market reward Boston Beer stock with Friday's jump?

For one, keep in mind that Boston Beer is still down more than 30% over the past year as of this writing. That decline might be enticing for any investors still optimistic for the prospects of the craft-beer market over the long term. And Boston Beer isn't sitting on its heels as it continues to get pressed by both larger and smaller rivals encroaching on its niche.

In keeping with a comprehensive review of Boston Beer's brand messaging and packaging completed (ahead of schedule) last quarter, Koch noted that a "major packaging update for Samuel Adams Boston Lager has already shipped, to be followed by new Seasonal and Rebel packaging by the end of the fourth quarter."

In addition, Boston Beer expects to complete the national draft launch of its new Samuel Adams Rebel Juiced tropical IPA by the end of this month and has plans for "reimagining" its seasonal program with several promising new seasonal brews over the first three months of 2017.

On operational efficiency, financial guidance

But perhaps most intriguing were Roper's comments that Boston Beer is now conducting another comprehensive review, this time of its brand strategies and activation plans with the aim of ensuring "our investments are effective and efficient in building long-term brand equities."

This news naturally spurred some rumblings on Wall Street of whether Boston Beer might be considering whether to put itself up for sale. But until an actual acquisition scenario materializes -- and in light of management's decidedly long-term comments (more on that in a moment) -- I think investors would be wise to focus first on the actual business.

Read more at: http://www.fool.com/investing/2016/10/23/boston-beer-bubbles-up-despite-another-painful-qua.aspx

Will the craft beer industry boom or bust?

By the end of 2016, New York State craft brewers will make about a quarter billion pints of beer. That's a lot, but still only enough to give us drinking-age New Yorkers less than two per month. That's why people like Brewers Association Chief Economist Bart Watson say the industry is fine.

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"The growth in breweries is built on solid demand fundamentals," Watson says. "Beer lovers want fuller flavor, they want more variety, and they want beers from small and independent local producers."

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New York brewers, like Pat Greene at Chelsea Craft Brewing Company, can get New York ingredients, which is what the people want.

"The population is younger, professional, well educated, and also enjoys fresh ingredients in their products not only in their beer but their food and their wine," Greene says. "And the brewer now can make those small batches of beer and serve them locally."

The big difference between the bust of the late 1990s and today is the beer is just a lot better. The people making it are smarter and more experienced. The ingredients are fresher and local. And this is another thing these breweries have: tap rooms. The tap rooms let them sell directly to the consumer. That helps them withstand downturns in the industry.

"For many breweries, those direct sales, they're a lifeline," Watson says. "And even if sales decrease in wider distribution we've seen breweries pull back to their taprooms and continue to stay in business."

"A lot of the breweries are designed just for that," Greene says. "Their equipment I'd say is a little bit bigger than a home brewer's where they can do small-batch beer and they know that every ounce of that is going to be sold at a retail price so their markups are good and they can survive."

Even if there is no bubble right now, craft beer sales are down. But companies like Boston Beer Company, the maker of Sam Adams, are playing a big role in that. They're still "craft" brewers but their sales are slumping. And while these producers are nowhere near as big as Budweiser or Miller, Fortune Magazine's John Kell says craft beer drinkers might feel like they're still too big.

"People kind of want to discover something new when they are discovering a craft beer so for a company like Sam Adams that's been around for over 30 years at this point doesn't feel very local," Kell says. "People are really excited about experiencing something that's new, and tasting something that's very local. When they travel they want to taste a local beer -- that's part of the experience."

So while the bigger brewers do have things to figure out, your smaller, local tap rooms will still be pouring plenty of pints for the foreseeable future.

Source: http://www.fox5ny.com/news/212750226-story

Craft beer revolution trickles down to South America

Think of Latin American alcohol and you are likely to think of wine and spirits.

Mexico has its tequila, Cuba has rum, Brazilians drink caipirinhas and in Peru they make pisco. In Chile and Argentina, the tipple of choice is often a cabernet sauvignon or a malbec.

You are less likely to think of craft beer.

But slowly, surely, the beer revolution that is so well established in northern Europe and North America is starting to trickle southwards.

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Across Latin America, small breweries are opening up, offering alternatives to the mass-produced brands of lagers.

These emerging microbreweries account for only a tiny fraction of overall beer sales, but that fraction is expanding quickly.

"Sales of craft beer in Latin America are growing at between 20% and 40% a year, depending on which country you're in," says Daniel Trivelli, president of Copa Cervezas de America, one of the region's biggest craft beer contests.

"Here in Chile, sales are growing at 25% and craft beers have around 2% of the overall beer market. We have around 250 craft beer breweries here, producing around 1,500 different beers."

Traditionally, Latin Americans have tended to drink light low-alcohol lagers, in part due to the hot climate across much of the region.

But that is starting to change as people acquire a taste for stronger, more complex brews.

"In Brazil, despite its economic crisis, craft beer sales are growing at 40%," Mr Trivelli says.

"They still represent only around 0.8% of all beer sales but in a country of 220 million people who consume 69 litres of beer per capita each year that's still significant."

Brazilian brewers are also starting to experiment with their country's dazzling array of tropical fruits.

"The Brazilians could take over the world in beer if they use their unique ingredients," says Kristen England, a US beer expert and a judge at the recent Copa Cervezas de America contest staged in Chile.

"The Brazilians have fruits we've never heard of in the US."

Fernanda Meybom, a Brazilian beer sommelier, says some Brazilian brewers age their beers in barrels previously used to store cachaca, the powerful sugar-cane spirit which forms the basis of the country's national cocktail, the caipirinha.

"It gives the beer a unique taste," she says. "Of course, in Brazil we're more famous for our cachaca and caipirinha than our beer, but there's room for everyone. You can make a really good craft beer using traditional Brazilian elements."And it is not just the Brazilians who are experimenting.

Read more at : http://www.bbc.com/news/world-latin-america-37607727

7 lessons learned from Heineken to woo consumers

According to data provided by Allied Market Research the global market for Beer reach the figure of 688,400 million dollars in 2020 with an annual growth of 6%. Figures that left more than clear that this drink like. And much.

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"Over the past five years , beer consumption globally has remained more or less at the same level but what if it has increased the number of brands that are drunk , " said Frank Amorese, media director of Heineken in U.S.

This puts us in a scenario in which differentiation is the only key to position ourselves in the best possible way in the top of mind of the consumer. And if anyone knows about this it is precisely Heineken.

The company is committed to specific social causes in their advertising and production of such spots it allows the brand to really know the interests of their target not only on television but with an eye to expanding its reach into mobile.

Heineken has been working for over two years with SocialCode in the application of knowledge from the social advertising to develop a strategy based on the interests of your audience. A combination of first - hand data from third that let you keep track of all consumers who have seen their ads and ended up buying beer.

A strategy that seems that is working quite well and then we offer eight lessons we have learned from the company gathered by dmnews.com .

1. The ROI is ROI

Something as simple as that if we want to get a return on investment we will have to invest. Not enough to observe the CPM and metrics of the media. We must go for a measure and adapted investment but do not expect to receive anything if we are not investing in it.

2. You have to know where we move

As we have seen Heineken has optimized its ads focus on social commitment , tastes and actions but realized that there was a correlation between engagement and sales generated. Therefore they have focused their efforts on optimizing their reach .

We must ensure that not only do good and creative advertising but the call to action is clear and concise.

3. Understand your consumers

Heineken have a kind of Decalogue always check before launching any announcement to whether it meets the requirements expected of your advertising. Storytelling, easy identification of the mark or creativity are some of the fundamental pillars.

4. Do not bet on the same creativity worldwide

The fact that we want our ads to be seen around the world does not mean we should show the same ads on all sites. Adapt global creatives to different local markets according to their cultures is vital.

5. Agility and without fear of error

The social scene is constantly changing so our brand must be willing to do it too. Here agility and speed in social networks are fundamental not only to practice active listening consumers and respond to their needs, but to control the competition .

Never be afraid to try new things because you have to take risks to not be left behind. This is one of the prices of innovation and error (within assumable parameters) has to be seen as a learning process.

Read More at : http://www.marketingdirecto.com/marketing-general/marketing/7-lecciones-aprendidas-heineken-conquistar-consumidores

European Beer Market Quenches the Thirst of Drinkers Worldwide

European beer brands are banking on more sales in 2016. Brands here are eyed by Asian companies who want to have their fair share.

Europe is definitely a fascinating destination Besides multiple cultures, influences and languages, one of the greatest aspects of this old continent is; people here enjoy drinking. European simply love beer! While each country in the region has their national beer some of the most exciting ones include Guinness (Dublin), Heineken (Amsterdam) and Tuborg (Copenhagen). Research analysts at Allied Market Research assessing the industry share and size, consumption volume, growth rate and opportunities indicate that the alcoholic drink dates back to the period when monks preferred brewing their own beer and were permitted to sell it to the public directly. Beer were then stored in cellars and under the courtyards. Shade of the chestnut trees kept the beer cool.

Brands Sell More Beer than Ever

The market shares of few beer companies rose to a record high. Truly, many good factors have finally converged in for the most popular brand, Heineken. Sale of this brand remain high in different regions including Eastern Europe. The brand has been focusing on the underlying trading environment across different countries. They have learnt the hard way when it comes to generating currency in the beer market.

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The Entire World Seems Thirsty for Europe’s Beer     

When it comes to beer, Europe preserves a rich culture and repute. The region has won many customers worldwide. One of the renowned brands, Heineken shot to fame when it sold over 200 brands over 200 brands across 179 nations in Europe. The continent holds significance as an expert backed by a long-standing culture of beer production. Countries such as Czech Republic, United Kingdom, Belgium and Germany are known for producing world’s finest beer.

Japanese Beer Buys Growth in European Countries

Few large brewing companies are believed to have invested in beer brands as well as manufacturing units in Europe. In a recent incident Japan’s famous brewery Asahi is said to have made a generous investment of EUR 2.55 billion in two beer brands Grolsch and Peroni. The deal also includes a manufacturing unit from AB InBev. The world’s favoured brewing brand AB InBev, has put both the brands for sale as an initiative to receive the consent of competitive authorities globally for its collaboration with SAB Miller, considered as world’s second – largest beer brand. The collaboration is likely to result in a new mega-organization that will account for about 30 percent of the world’s beer industry.

Rapid growth in the sector has persuaded research analysts at Allied Market Research to publish a report titled “World Beer Market - Opportunities and Forecasts, 2014 - 2020". The study outlines that the sector is ready to register a CAGR of 6 percent by 2020. This clearly indicates that Europe would definitely have a fair share in the profits.

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