Heineken reports dip in on-trade beer volumes

By John Harrington

- Last updated on GMT

Related tags: Heineken uk, Olympic games, United kingdom

Turnover at the UK arm of Heineken dropped slightly
Turnover at the UK arm of Heineken dropped slightly
Heineken UK says the poor summer weather and “challenging” consumer environment in 2012 led to a fall in consumption in the on-trade in the year, although its share of the beer market increased.

Turnover for the UK arm of the Dutch brewer – which has also reported a rise in sales of its fruit ciders over this summer - fell 3% to £1,547.8m in 2012. Operating profit grew from £33.3m to £73.2m, with the small decline in revenues offset by a higher reduction in operating costs.

Heineken UK said: “2012 was an exciting year with significant strategic and operational progress being made in a challenging environment.

"Beer volume outperformed a declining market and contributed to a share gain of around 60 basis points. Foster’s extended its mainstream beer leadership in the off-premise channel, whilst the Heineken brand grew strongly, benefiting from premium brand building activities including the London 2012 Olympic Games and the James Bond Skyfall​ partnership.

"Gains in the off-premise channel mostly offset reduced consumption in the on-premise channel, due to poor summer weather and the challenging environment."

Restructure

Overall cider volumes declined in the “low single digits” despite the launch of new Strongbow packaging and the Strongbow Pear variant in the year, “alongside the continued growth of Bulmers”.

“Business performance was further supported by continued growth of Foster’s Gold and Desperados.”

Heineken UK said that a restructure across the wider Heineken group, which led to a net increase in profit of £433.9m, caused profits after tax to fall from £335.2m to £2.4m.

Meanwhile, the Sunday Express​ reported that the warm summer in 2013 has helped lift sales of Heineken UK’s flavoured ciders.

In just six months its Bulmers Cider BoldBlack Cherry and Bulmers Cider Pressed Red Grape have sold about 4 million bottles, worth £1.3 million, the newspaper reports. Bulmers has grown its share of this market from 17% to 19.4%.

Consumer need

Heineken’s low alcohol lemon-flavoured beer, Foster’s Radler, has sold more than 13 million bottles since it launched six months ago, the paper said, adding the firm believes the fruit cider category could turn into a £300m market, up from £90m today. It has already grown by 34% this year.

Jacco van der Linden, UK marketing director at Heineken UK, is quoted saying: "The new Bulmers flavours and Foster’s Radler are riding high on the back of a bright summer. But their success is grounded in the fact that the new products were shaped by genuine consumer insight and fulfil a real consumer need."

Related topics: Beer

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