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Heineken, the world’s second-largest brewer, sold more beer than expected in the first quarter, notching up its first increase in volumes in 12 months after higher prices hit demand last year.
The Amsterdam-listed brewer said the volume of beer sold rose 4.7 per cent organically in the three months to the end of March compared with the previous year, ahead of the 2.5 per cent increase forecast by analysts.
The return to volume growth comes after Heineken raised prices aggressively last year to offset higher costs on everything from barley to aluminium, hitting demand.
On Wednesday, Heineken said sales volumes of its premium beers, which include brands such as Birra Moretti and Kingfisher Ultra, grew at 7.3 per cent in the first quarter, outperforming its total beer portfolio. Net revenue rose 9.4 per cent to €6.8bn, ahead of the 7.2 per cent rise forecast by analysts.
Chief executive Dolf van den Brink said all regions had grown volumes and revenues, boosted by Easter falling earlier and other one-off effects. However, the company held firm to its guidance for 2024, amid a “challenging and uncertain” economic environment.
Heineken tempered expectations for annual profit growth in February, and is currently expecting operating profits to grow organically at a low to high-single digit.
In Asia, Heineken benefited from an economic recovery in Vietnam, one of its key markets, which helped boost Asia Pacific volumes by 9.4 per cent.
Last year, the beer group was hit by overstocking and economic weakness in Vietnam, as well as the impact of stricter drink-driving rules. Heineken said sales volumes in the Vietnam grew by the low-teens in the first quarter, while sales volumes in Nigeria, another core market, grew almost a fifth.
Analysts at Barclays said the Vietnamese market was now only declining by “mid-single digits,” compared to about 10 per cent towards the end of last year. “Vietnam has to be the most important recovery for Heineken,” said Laurence Whyatt, analyst at the bank, due to the region’s historically high margins.
“Seeing it back in growth is very important for the company’s profitability,” he added.
European sales volumes rose 1.6 per cent in the quarter as European pubs held up through the cost of living crisis. However, the brewer said it had noted a shift in some markets, with customers buying more beer in supermarkets instead of in bars and restaurants.
A shift in channel mix would mean lower margins for the company going forward, said Wyatt.
Shares in the company, which also owns brands including Amstel and Red Stripe, were broadly flat in morning trading on Wednesday.
