What A Headache

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What's going on?

Shhhhh, not so loud: Heinekens quarterly results mightve beaten expectations on Wednesday, but they left investors with a grim taste in their mouths.

What does this mean?

Beer is still very much a tonic for these trying times, but its one Heinekens customers are knocking back in their own homes rather than out and about. And that isnt good news for the world second-biggest beer brewer: it doesnt just make less money from stores than it does from bars, it spends more producing cans and bottles too.


So with the pandemic surging worldwide yet again and with stay-at-home orders traipsing not far behind Heinekens decided it needs to cut costs. And while it previously promised not to cut jobs this year, it turns out the company cant stick to that in 2021: its planning to reduce its workforce by 20%.

Why should I care?

For markets: If Carlsberg did earnings reports…


At least rival Carlsberg came away from its earnings update on Tuesday feeling fresher: the brewers beer sales were stronger than analysts had expected, which might be down to strong performances in places like Russia and China. It lifted its 2020 profit forecast for the second time in a row too, while the only thing Heineken had to say about the rest of the year was that itd be a volatile time.



The bigger picture: Booze-free is the new boozy.


Heinekens now looking to win over new beer-drinkers by doubling down on the alcohol-free market. And that might prove a shrewd move: Carlsberg whose booze-free segment grew by 29% last quarter reckons the market in Western Europe will triple to 15% in the next few years, while brewing powerhouse AB InBev has pledged that zero-alcohol drinks will make up 20% of its portfolio by 2025. And if they can make it taste like beer by then, all the better.

Originally posted as part of the Finimize daily email.

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