16 Mar 2021
Posted in Consumer
COVID-19 is not sole influencer of beer declines in East and Western Europe markets, says GlobalData
Recent 2020 annual performance results published by breweries including Heineken and Carlsberg highlight that beer consumption took a sizeable hit through 2020, with the closure of on-premise outlets hampering sales potential for both companies, writes GlobalData, a leading data and analytics company.
Holly Inglis, Beverages Analyst at GlobalData, comments “Although COVID-19 has massively impacted the beer market, consumption in regions including East Europe were already in decline. The region recorded a compound annual growth rate (CAGR) decrease of 0.1% between 2015-2019*, highlighting that there is a deeper issue in progress”.
Heineken’s net revenue declined by 11.9% in 2020 and reported that sales in its European region was impacted heavily in Q2 and Q4 due to restaurant, bar, and pub closures. The company has announced that it will reshape its business and reduce staff headcount by 8,000. Carlsberg also noted that beer volumes in Western Europe weakened by 4.3% in 2020, driven by the same channel closures, despite the company making several acquisitions in Germany (Wernesgruner Brewery) and the UK (Marston’s).
Inglis continues: “A changing consumer sphere in terms of alcohol consumption is creating a downturn for beer demand, despite an influx in low/no alcohol variants like Grimbergen 0.0%, Guinness 0.0% and Gorkovskaya Brewery IPA 0.0%. However, due to low/no ABV beers having such a small share amongst brewers, this is not enough to forfeit declines in 2020. Brands also continue to battle with consumer concerns over sustainability, with production processes coming under increasing scrutiny over the environmental impact brewing beer has.”
According to GlobalData’s research, Europe’s two largest beer consumers, Russia and Germany, have witnessed declines between 2015 and 2019. Both companies lost CAGR volumes of 0.7% and 0.9% respectively*1, as consumers continue to prioritise moderating their alcohol intake.
Inglis adds: “In Germany, 30%*2 of consumers have stopped buying beer products or are buying them in smaller quantities/less frequently since COVID-19. This highlights that the pandemic has propelled an already emerging shift toward health concerns, with consumers now undoubtedly focusing on consumption to promote immune health”.
* GlobalData’s Beer and Cider Market Analyser: Brand Volume and Value
*2- GlobalData’s 2021 Q1 Consumer Survey – Germany