Dutch beer maker Heineken recorded a 5.2% fall in organic sales volume in the first nine months of this year, with Vietnam and Nigeria accounting for 2.6 percentage points of the fall, said CFO Harold van den Broek.
Speaking at a Q3 review conference Wednesday, he said the other 2.6 percentage points of the fall in organic sales volume belonged to all other markets.
Organic sales encompass those streams of revenues that are a direct result of the firm's existing operations as opposed to revenues that have been acquired through the purchase of another company or business unit in the period.
The 5.2% fall in the nine-month period was a slight improvement from a drop of 7.6% in Q2/2023 or 5.6% in the first half of 2023, the executive said. The fall in Q3/2023 was 4.2%.
The sales volume of Heineken’s premium beer brands declined 5.7%, mainly driven by the brewery’s exit from Russia and the performance in Vietnam, according to Heineken. The premium brands include Heineken®, Heineken® 0.0, and Heineken® Silver.
Globally, Heineken earned net revenues of €22,529 million ($23,760 million) in January-September up 5.9% year-on-year. The Asia Pacific market improved sequentially, “despite ongoing challenges in Vietnam,” said CEO Dolf Van Den Brink. An economic slowdown in the Asia Pacific region pushed down the brand’s organic sales volume by 4.6%, still an improvement from the result in the first half of this year.
In Vietnam, the beer market has been impacted by the economic slowdown, disproportionately affecting Heineken’s regional strongholds and the premium segment, the brewery said. Heineken® grew volume in the high-teens, driven by the continued success of Heineken® Silver, up in the forties. Heineken’s mainstream portfolio outperformed rivals, with the Bia Viet, Bivina and Larue brands gaining market share.
Net revenue declined organically in the low-teens with a beer volume decline in the mid-teens, an improvement relative to the first half, albeit behind the category mainly due to the market decline of the premium segment.
On October 19, Heineken Vietnam announced that Heineken®, a premium franchise, is now fully brewed using renewable energy. The move is part of the company’s sustainability ambition of “Brewing A Better Vietnam” and also a celebration of the global firm's 150th anniversary.
All the products in the Heineken® franchise – including Heineken® Original, Heineken® Silver, and Heineken® 0.0 – are now being brewed with 100% renewable energy in Vietnam. The thermal energy in the brewing process comes from biomass, with input from agricultural by-products like rice straw, rice husks and sawdust.
Electricity used in the production is covered by Energy Attribute Certification (EACs), which means it is sourced from certified solar projects in Vietnam. Heineken Vietnam said it is also exploring bolder renewable electricity solutions, including direct power purchase Agreements (DPPA).