HUSA Trends Improving
Will Match Corona on Pricing
FILED AUGUST 23, 2012
Dear Client:
On a conference call with investors, Heineken NV chairman Jean-François van Boxmeer said that they are prepared to follow Corona on Fall price increases. "We have always said, we cannot take price as long as Corona is not taking price. We see now that Corona is starting to move in a number of regions, and we will follow as soon as possible. At the same time, on Dos Equis, we have been taking price to cover step by step the gap we still have with Corona," he said. New Jersey and Massachusetts are going up in price in September and Florida is going up in Early October, staying in line with Corona's moves, according to sources. We're hearing 85 cents a case for Heineken in some markets.
(As a sidebar, we saw a big "up to $20" MIR if you buy $70 of groceries and 2 twelve packs of a HUSA product. That's a big'un).
U.S. PERFORMANCE. For the first half, brand Heineken shipments grew 6% in the U.S. along with "broadly stable" STRs. Total HUSA depletions were up 2.4%. "Now if shipments would have grown in line with depletions, the Heineken brand growth in the Americas region would have been over 3%. Globally, we continue to build consistent brand equity for the Heineken brand with the success of the Open Your World campaigns," added Jean-François.
"In the U.S. our business is doing well, and even the market was up for the first time in a couple of years. To be honest, it was very much also helped by good weather. There you have the opposite what we saw in Europe that in the first half and certainly the first quarter the weather has been very favorable in the U.S. So you see total market up by 1%, where our depletions were up 2.4%. So share-wise and performance-wise, we do well. It's also very good to see that the Heineken brand itself is now in positive territory, and as we always say, it's early days. You don't change things from one quarter to the other, but it is very positive to see that the new approach we are taking in the U.S. is resonating and we will bring that further. As you know, we have aligned fully to the global positioning. With the global marketing campaign, we will make the next step as it has been announced in the U.S. that we also go to the global packaging in the U.S. that will be further improvements of our position."
ONGOING TIGER ACQUISITION. Says Jean-François: "We're pleased to have signed a formal agreement with the Board of Fraser and Neave to acquire their entire stake in APB. We're also pleased to that they will recommend the proposed transaction to their shareholders. This is an important milestone in the process of gaining full control of APB. The proposed transaction remains subject, of course, to approval from the shareholders from Fraser and Neave. And as you will have seen, we have announced that yesterday we acquired 6.9 million shares in APB directly, and that brings the total percentage of APB shares owned by Heineken to 44.6% as we speak..... Given that the proposed transaction is still subject to approval from the F&N shareholders, we will update the market further at that time."
GLOBAL HEINEKEN. For the first half, organic revenues for global Heineken NV were up 4.5% with growth across all regions. "This was achieved despite poor weather conditions across many of our Western European markets in the second quarter. Higher volume and pricing contributed to this revenue growth with revenue per hectoliter up a solid 2.9%," said Jean-François.
Heineken is gaining share in France, Mexico, the Netherlands, Russia, Nigeria, U.K. and the U.S. Brand Heineken grew 6% globally, "outperforming the overall beer market and the international premium segment again."
CIDER ACQUISITION. In addition to gaining the importation rights to Strongbow in the U.S. starting in January, Heineken announced the acquisition of Stassen, a cidery in Belgium with "proven cider innovation capability that will also provide additional cider production capacity in Europe." Heineken is also encouraged by the rollout of Strongbow Pear in the UK.
A-B EXTENDS MLB SPONSORSHIP THROUGH 2018
It seems that A-B has repaired whatever issues it had with Major League Baseball after their lawsuit two years ago, as they unveiled a six-year sponsorship renewal yesterday, extending a 33-year relationship.
The contract extension will allow Budweiser to remain as the official beer sponsor of MLB, but also includes provisions making the beer brand a sponsor of the new single-elimination Wild Card Games, baseball's opening week, and the player of the month awards. Sponsorship-research firm IEG pegged the existing deal at about $20 million a year, along with an additional $20 million in promotional commitments, according to Dow Jones Newswires. Budweiser is also a sponsor of 23 of MLB's 30 teams.
CORRECTION. I really enjoy issuing corrections on my corrections. Yes, the brand is called Blue Moon Belgian White, not Blue Boon. Another payment to breast cancer research going out in the mail.
Until tomorrow, Harry
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