Canada markets open in 1 hour 28 minutes

Alcohol-free beer helps Heineken to best year in a decade

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Bottles of 'Heineken 0.0' at Spanish Formula One Grand Prix at Circuit de Catalunya in Montmelo, Spain. (Alex Caparros/Getty Images for Heineken)

Booming sales of no-alcohol beer helped Heineken (HEIA.AS) enjoy its best sales growth in a decade last year.

Heineken said on Monday that sales of its own-brand beer grew by 8.3% in 2019, the best performance in over 10 years. Part of that was down to the success of Heineken 0.0, its alcohol-free beer, which is now on sale in 57 countries.

“The Heineken brand growth accelerated to 8.3%, with more than 40 countries delivering double digit growth,” chairman and chief executive Jean-François van Boxmeer said. “The successful roll-out of Heineken 0.0 continued.”

Heineken, the company, owns more than just Heineken the beer and the company saw surging sales of low- and no-alcohol beer across its portfolio. Low- and no-alcohol beer sales jumped by 7.6% and now account for almost 5% of total sales.

Heineken’s total revenue rose 6.4% to €28.5bn (£24bn, $31bn) in 2019 and net profit rose 13.2% to €2.1bn.

“In 2019, we delivered another year of superior top-line growth, with continued strong performance in the second half,” Van Boxmeer said.

Heineken hiked its final dividend by 5% to €1.68 per share and the stock rose 5% in Amsterdam.

The company said it expects “mid-single digit” growth in profits this year, barring any “major negative macro economic or political developments.” It’s too early to tell what the impact of the coronavirus epidemic would mean for the business, Heineken said.

Van Boxmeer, who announced he was stepping down as chief executive earlier this week, said Heineken would continue to improve its environmental record, “with an ever-increasing emphasis on the sustainability of this growth, both socially and environmentally”.

“Over the past decade, we have lowered our water usage by almost a third to 3.4 hectolitres of water per hectolitre produced, ahead of our 2020 target,” he said in a statement.

“We increased the proportion of renewable energy in production to 19%. In more than 60 markets, we spent over 10% of Heineken media budgets on responsible consumption awareness campaigns.”

Heineken said Brazil is now the biggest market for its flagship beer globally and 12 countries now sell more than one million hectolitres of the stuff each year, including the UK.