So much for a beer slump – Dutch brewer Heineken has revealed growth of its eponymous beer has hit its highest level in a decade.
Heinken’s volume growth accelerated in the fourth quarter of 2019 to 12% to close the year with 8.3% growth.
The brand grew across all regions, with double digit growth in more than 40 markets including Brazil, Mexico, South Africa, Nigeria, the UK, Romania and Germany.
Brazil is now the largest market for Heineken globally and with the addition of the UK and Nigeria, now 12 markets sell more than one million hectolitres of the brand.
In Asia Pacific, consolidated beer volume grew 11.8% with double-digit growth in Vietnam, Cambodia, Myanmar, Korea and Japan. Price mix was up 0.8% on a constant geographic basis. The region delivered organic operating growth of 12.1%, driven by Vietnam and Cambodia.
Low and no alcohol boom
The company’s operating profit rose to €4.02 billion (£3.38bn) last year, thanks to growth in Asia, and in the low and no-alcohol category.
Heineken does not break out the sales of its individual beers, but it disclosed that Heineken 0.0 saw mid-double-digit growth.
“The successful roll-out of Heineken 0.0 continues and it is now available in 57 markets,” CEO Jean-François van Boxmeer said. “The brand will be the official beer partner of the UEFA Euro 2020 and has extended its partnership with the Champions League until 2024.”
The brand also recently released a new beer ad that sees James Bond turn down his signature martini and request a Heineken 0.0 from the bartender instead.
“The volume of our low and no alcohol portfolio increased high-single digit to 14.1 million hectolitres. The no alcohol portfolio grew double-digit driven by Heineken 0.0, line extensions of other leading brands and beer mixes.”
CFO Laurence Debroux added: “We are not splitting the Heineken brand between Heineken 0.0 and the mother brand. What you are seeing is that you have far less cannibalisation than what you had, for instance, when we launched Heineken Light in a number of markets because with Heineken 0.0 you are actually getting to some non-beer outlets.
“You are getting to occasions where people do not drink beer or do not drink alcohol anymore, such as lunch. You are actually also appealing to people who do not want to drink alcohol or cannot drink alcohol in certain occasions.”
New CEO for Heineken
The board of Heineken also announced Chairman of the Executive Board and CEO Jean-François van Boxmeer (below, left) is stepping down, following his successful 15-year leadership of the company.
Dolf van den Brink (above, right), currently President Asia Pacific region, will replace him.
Van Boxmeer joined Heineken as a management trainee in 1984. After a number of international management positions, he was appointed member of the Executive Board in 2001. In 2005, Van Boxmeer was appointed Chairman of the Executive Board and CEO of Heineken N.V.
Jean-Marc Huët, Chairman of the Supervisory Board, said: “The Supervisory Board is grateful for the extraordinary contribution of Jean-François van Boxmeer in bringing Heineken to where it is today.
“Under his stewardship, the company more than doubled in size due to both strong organic growth and transformational deals that turned Heineken into the most global brewer, with iconic brands enjoyed by consumers on all continents.
“Not only did he deliver superior top-line growth and an excellent business performance, he also developed and nurtured a diverse and great talent pool across the world. He will leave behind a company excellently positioned to grow further. For all this, we owe Jean-François a heartfelt and huge thank you.”
Van Boxmeer commented: “It has been a great privilege and honour to lead Heineken and to work with so many great people from all over the world over the past three decades. I feel now is the right moment to hand over leadership to the next generation. I am proud of what we have achieved together and I would like to thank the Supervisory Board, my fellow Executive Board member Laurence Debroux and the Executive Team for their support and confidence. I would also like to thank all our employees, who make our business great every day.
“It is my absolute pleasure to be handing the helm to Dolf. His ability to lead teams, grow our brands and business, in a responsible way, is nothing short of impressive. I am certain that under his leadership the company is in the best of hands to continue to grow. I look forward to work with Dolf in delivering a smooth transition.”
Van den Brink has been with Heineken for 22 years. The company said his successor would be announced in due course.