Warmer weather and major sporting events this summer have the world’s biggest brewers hoping to recover financially from a “barbaric” 2023. However, spirits producers could face challenges in the coming months.
Analysts predict that Heineken NV, Carlsberg AS and Budweiser producer Anheuser-Busch InBev NV are among the beer companies to benefit if good weather coincides with the Euro 2024 soccer tournament in June and July.
As Bloomberg Intelligence analyst Duncan Fox points out, the European soccer leagues help boost beer sales in Europe, especially in larger countries such as the United Kingdom, France, Spain, Italy and Germany.
If these countries progress to the latter stages of the tournament as expected, brewers are likely to see a significant increase in their volume. The betting odds show these countries as favourites, with England ahead. Germany, the United Kingdom and Spain are among the top 10 beer consumers worldwide, according to Statista.
In fact, Barclays analyst Laurence Whyatt tells Bloomberg that if England play Italy or France in the final, this “will be very useful for the industry”.
The good weather
Brewers, including Carlsberg, expect better weather to boost sales this summer. Heineken CEO Dolf van den Brink described last summer as “brutal” due to heavy rains across Europe in July and August that kept people indoors.
For cognac, vodka and aperitif makers, however, the outlook is not so rosy. European spirits makers have struggled to maintain performance amid the pandemic in the U.S., where stimulus checks and stay-at-home restrictions have contributed to a boom in consumer spending, Whyatt told Bloomberg News. They are also more exposed to the US than European breweries.
“There was an expectation that people’s habits would be shaped to some extent, that if you’ve learned to make cocktails at home, you might as well continue to do so after the lockdown,” he said. “But what we’ve seen in last year’s data is that all the growth during the pandemic has really been lost.”
Trying to sell premium brands to US consumers has been a difficult task in 2023 as economic distress deepens, and may remain so in 2024.
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