World: Heineken lays out plan to grow beer sales, cut costs

Dutch brewer Heineken said on October 23 it aims to deliver mid-single-digit organic net revenue growth each year until 2030, with profit growth ahead of that, as it laid out an updated strategy for the next five years, ESM Magazine reported.

Under the plan, unveiled ahead of a capital markets day in Seville, Spain, Heineken said it would concentrate on growing its business in 17 markets, including via targeted acquisitions. It will also pursue divestments where appropriate.

Those markets, which range from Mexico to Malaysia, Spain and the UK, will benefit from more resources, CEO Dolf van den Brink said. Others where Heineken sees minimal opportunity will have less and Heineken could ultimately exit, he continued.

The world's second-largest brewer by revenue said its 'EverGreen 2030' strategy would help it navigate a rapidly changing world, which it said presented challenges but also offered opportunities.

"We are fundamentally transforming our business to stay ahead in an increasingly volatile geopolitical and economic landscape," van den Brink said in a statement ahead of Thursday's event.

Investors have perceived Heineken as lagging behind its peers, particularly Anheuser-Busch InBev, the world's top brewer, which some say has built a leaner, more efficient operation.

While Heineken's shares are up around 3% year-to-date, AB InBev's have risen around 10% and Carlsberg's have climbed even higher, around 15%.

The company said it expected organic operating profit to grow ahead of revenues, while earnings per share would grow in line with or ahead of that, and it would aim for over 90% free-cash conversion.

Profits will be helped by ambitions to make up to €500 million ($583 million) in annual gross savings - a target it already had in place for 2025.

Heineken's shares slipped early on Thursday, falling almost 2% before regaining some that ground to trade down nearly 1% at 8:00 GMT.

Heineken has faced consistent turbulence since setting its previous strategy and targets in 2020, first weathering the pandemic and then battling fast-rising cost inflation that forced price rises and hurt sales.

Subsequent disruptions have spanned everything from bad weather to hyperinflation and, more recently, US President Donald Trump's trade wars and erratic tariff policies.

Across the sector, brewers are grappling with difficult economic conditions and weak consumer confidence.

On Wednesday, Heineken warned it would sell less beer again in 2025 after weak third-quarter sales in Brazil and Europe.

Longer-term, brewers face challenges as some drinkers cut back on alcohol, health warnings rise and disruptions emerge from new competitors or shifts like the rise of weight-loss drugs.

Heineken said it would expand its low- and no-alcohol offering to adapt to changing consumer demands.