Heineken, the third largest brewing operation in the world and the largest in Europe, just announced a very successful first quarter of 2012.
According to official sources, Heineken’s first quarter revenue increased to 3.83 billion Euros, an increase of 6.8 percent. Likewise, beer volume increased by 4.7 percent overall and 4.5 percent in the Americas. This latter statistic is among the most impressive, especially when you consider that sales volume for non- craft breweries in the United States has been sinking for some time.
Higher costs for ingredients such as barley ate up part of the overall cost savings strategy at Heineken and as a result, operating profit declined slightly. However, Heineken plans to counter this trend by increasing prices of its core brands by a small amount and also by selling more beer in the coming months. The purchase of Mexican- based FEMSA Cervesa in 2010 has helped Heineken more assertively position itself to improve sales. Mexican beers like Sol are now part of Heineken and the parent company plans to expand marketing and sales of this and other brands.
Financial markets reacted positively to the news, sending Heineken shares to a four- year high. It will be interesting to see if the two largest brewers in the world, Anheuser- Busch InBev and SABMiller, will be able to match Heineken’s record of success when they announce earnings in the coming weeks.