Heineken faces falling global demand despite revenue resilience

Heineken has reported falling beer demand in key global markets, attributing a challenging third quarter to more moderate consumption habits in Europe and America as well as volatile trading conditions. The Dutch brewing giant, which counts Birra Moretti and Amstel among its brands, saw global third-quarter revenue dip by 0.3 per cent to €8.7 billion, outperforming analyst expectations of a steeper 0.8 per cent decline.

The brewer adjusted its profit forecast for the year, indicating earnings growth will now settle toward the lower end of its previously guided four to eight per cent range. Chief executive Dolf van den Brink pointed to “more pronounced” declines in sales across Europe and America, partially offset by robust growth in Africa and Asia. The company’s widespread geographical presence proved beneficial in reducing the effect of muted performance in pivotal markets such as Brazil and the United States, where consumer sentiment remains subdued.

Net revenue per hectolitre rose by 3.6 per cent as price increases helped counteract lower sales volumes. Notably, the volume of beer sold dropped 4.3 per cent in the quarter and 2.3 per cent on an annual comparison. Europe witnessed a steeper contraction, with volumes down 4.7 per cent, exacerbated by Heineken losing shelf space following disputes over price hikes with major retailers in France, the Netherlands, Germany, and Spain.

The United Kingdom managed to buck the broader European trend, recording growth in both net revenue and beer volumes for the quarter. Heineken’s premium drinks segment, including Murphy’s Stout and Inch’s cider, delivered strong results, while Cruzcampo lager’s sales surged over 50 per cent, reinforcing the value of diversified brand positioning within the group.

Despite some resilience, the fall in volume and the inability to fully recover positions lost to pricing disputes weighed on overall performance. Shares in Heineken experienced volatility earlier in the year after the company cut its volume guidance, though its latest results have been received as somewhat better than anticipated by analysts. Laurence Whyatt, head of European beverages research at Barclays, remarked that expectations for the quarter had been grim, and the reality was less severe.

Heineken remains optimistic that the impact of European retailer disputes will largely recede before year end. Continued expansion was marked by the acquisition of Florida Ice and Farm Company in Costa Rica, strengthening the brewer’s foothold in Central America. As global markets continue to adjust to changing consumer habits, Heineken’s leadership is hopeful that confidence and demand will pick up once macroeconomic conditions stabilise.