Carlsberg toasts rising beer sales and sustainability progress

(source)

Dive Brief:

  • The Carlsberg Group reported 2018 net revenue rose 3% to $9.53 billion, with strong sales for its core and craft beers, along with its no-alcohol and low-alcohol brands. This was the first sales jump in three years for the Danish company, which produces brands like Tuborg, Holsten and Birrell.
  • The revenue boost was due in part to warmer weather in Western Europe and a benefit from last year’s World Cup, FoodBev Media reported. The company also released a report that took a look at progress on its sustainability goals where they “improved energy efficiency and reduced relative carbon emissions across our operations by 5%” in 2018.
  • “We delivered a strong set of results for 2018,” Cees ‘t Hart, Carlsberg’s CEO, said in a release. “We accelerated top-line growth, improved margins, delivered a strong cash flow and reduced debt even further. At the same time, we invested significant resources in our brands and activities, and we continue to target top-line growth and profit improvement in the coming years.”

Dive Insight:

Carlsberg is going against the grain with these 2018 annual revenue figures, since much of the rest of the industry has experienced declines in recent years. The company is following the latest trends to appeal to consumers and has done especially well with its craft and specialty beer brands, which grew by 26% last year. That echoes the performance of smaller, independent craft brewers in the U.S., whose sales exceeded those of the total beer market even while a growing number of them closed, according to the Brewers Association.

The Danish company also launched its first global alcohol-free drink last year with Birell, and its non-alcoholic brands saw 33% growth in Western Europe. This trendy sector is winning over consumers looking to reduce or eliminate their consumption of alcohol, and other brewers have jumped on the bandwagon. Heineken launched its 0.0% MAXX in Europe in 2017, Coors has its non-alcoholic brand and Guinness owner Diageo has Open Gate Pure Brew. But Carlsberg was ahead of the game and has been making nonalcoholic beers since 2015.

While Carlsberg’s 2018 beer revenue saw a boost from warmer weather and the World Cup, there may be some reputation factors at play here as well. According to Business Insider, Carlsberg is the most well-regarded beverage company in the world because of its reliance on science to improve beer quality and its commitment to more sustainable packaging, such as bottles made from wood fiber. 

Along with its revenue gains, Carlsberg also reported progress last year on its Together Towards ZERO sustainability goals. The company said it plans to quit using plastic rings to connect beer multi-packs and is using Snap Pack technology to glue cans together. This change is expected to limit its global plastic waste by more than 1,200 tons annually and appeal to environmentally conscious consumers, the company said.

Other sustainability practices helping the company include reducing its carbon footprint and limiting water waste. Carlsberg said it has reduced relative carbon emissions by 20% and water consumption by 9% since its 2015 baseline — and is now getting 46% of its global energy needs from renewable sources. In a statement, Hart said he was pleased with the company’s overall sustainability progress, and plans to continue emphasizing that “successful business is sustainable business.”​ The company’s sustainability efforts come as beer faces the effects of global warming, as researchers have found that drought and heat could significantly hurt barley crops. 

But Carlsberg isn’t the only brewer pursuing sustainability measures. AB InBev is investing in the development of more sustainable grains and is also cutting energy costs by adding solar panels and on-site wastewater treatment, insulating vessels and recapturing steam coming from the brewing process. The Belgium-based brewing giant said last year that by 2025 all Budweiser beers brewed globally will use 100% renewable energy. Products that meet this goal will have a “100% renewable energy” symbol on the label.

These sustainability efforts appeal to consumers who want to support companies that are serious about environmental standards. According to recent research from Indiana University, most beer drinkers would pay more for products made with sustainable practices. Carlsberg’s transparency about its sustainability goals and its popularity of craft and nonalcoholic beers seem to be boosting both the company’s reputation and its bottom line.

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