Heineken innovation drive offers hope as sales dip

Heineken will accelerate its innovation pipeline across Western Europe after it revealed 6 per cent of its revenue in the region during the first half of 2013 came from new products such as  Foster’s Radler and Strongbow Gold.

Heineken is to ramp up support for new brands such as Foster’s Radler to boost demand in Western Europe.

The announcement is a fillip to the brewer’s strategy to generate 6 per cent of global sales a year from new products as it steps up efforts to adapt to changing customer preferences. Last year, it revealed it generated 5.3 per cent of sales (£854.3m) from variants less than 3 years old.

The innovation push was unable to stem dwindling sales in Western Europe during the first half of 2013, however. The brewer blamed poor weather and customers reigning in spend for a 5 per cent year-on-year drop. Global revenue fell 1 per cent year-on-year, despite increasing sales of its premium brands such as Desperados and Sol. Global volume sales fell by 3 per cent.

The brewer says it will try and “strengthen” performance through “sustained brand investment” and “cost-saving initiatives”.

Elsewhere, Carlsberg’s ongoing struggles in Europe stunted a 2 per cent year-on-year increase in sales to 3.4 billion Krone (£389.4m) for the second quarter. A 6 per cent year-on-year decline in volume sales in Western Europe was offset by growth in Asia in the period.

The brewer blamed tough comparisons to last year when demand was lifted by its sponsorship activity around the EUFA European Championship football tournament.

Carlsberg said it would maintain an “ambitious commercial” strategy with continued investments in brands such as Tuborg and Somersby as well as innovation initiatives to deliver “satisfying market share improvements”.

The results come as major brewers see an upsurge in demand beer globally, but continue to haemorrhage sales in mature markets such as the UK. Nationwide beer sales are in decline, falling  4.8 per cent year on year and causing brewers to amp up their marketing activity, according to a report by Millward Brown.

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