New York-based senior vice president Linda Montag said in a report issue yesterday that Moody’s was revising its industry outlook up from ‘stable’ to ‘positive’, and that it predicts operating profits for beverage makers will grow by 6%+ through 2013 and into early 2014.
“A return to low double-digit growth in several important emerging markets and a more benign commodity environment will help offset headwinds facing the industry,” Montag said.
Challenging developed markets
These include slow growth or declining consumption of mainstream beers in developed markets, she added, as well as declining consumption of carbonated soft drinks in developed markets and the establishment of excise taxes on consumption.
Other headwinds included advertising restrictions in some markets and economic challenges in Europe, Montag said.
But she added that, thanks to emerging markets, global beer consumption was growing while wine and spirits sales remained strong.
Innovation drives US beer pickup
Despite beer sales declines in the UK, Australia and (until recently) the US, Montag said the sector remained strong overall thanks to strong emerging market demand.
“Specialty brands, innovation, flavored beer and imports, as well as an improving economy, are helping beer consumption grow again in the US after several years of decline,” she added.
Meanwhile an expanding middle class in emerging markets would keep demand growing for high-end wine and spirits, Montag said, to the benefit of Diageo, Pernod Ricard, Bacardi, Brown-Forman, and premium beers, boosting AB InBev, Molson Coors, SAB Miller, Heineken and Foster’s.