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Heineken ceo Dolf van den Brink discussed a dozen or so countries in his brief appearance at Barclays Global Consumer Staples Conference last wk. But he made only passing reference to the USA, calling it "a little bit case in point" on more challenging trends in developed mkts. Asked to weigh in on the "structural vs cyclical" debate, Dolf called it a "very important question" that's "on a lot of people's minds," including Heineken brass. And despite short-term disruptions, he's confident in long-term prospects, in part because basic building blocks of emerging mkt growth remain in place (upticks in population, middle class, urbanization and GDP per capita). Co's footprint remains "highly skewed to these important emerging markets," even if it's now a bit more selective than in yrs past. But across more developed mkts, it's "important to disaggregate between North America and Europe" since beer is "still growing" share in wine-centric Mediterranean region of Europe, Dolf noted. Beer's broader European struggles are "really a factor of affordability," he added, claiming the consumer is "struggling to catch up" with 30%+ price hikes over a roughly 3-yr timeframe. In the Americas, there's a big difference between key mkts like Mexico and Brazil and the US, "again being a case in point," said Dolf.Brazil "By Far" #1 Mkt for Brand Heineken and a Top 3 Profit Pool; Mexico "Our Most Important" Mkt Brazil is "by far our #1 Heineken market globally" and now a "top 3" profit pool for the brewer following big value creation over the past ~5 yrs, Dolf commented, even as co didn't make any money in Brazil until 2017. Mexico, meanwhile, is "our most important market globally," Dolf declared despite recent challenges. Co issued a cautionary note on softer volumes in both Brazil and Mexico in its 1st half trading report, a trend that "persisted" into Q3 but which Dolf characterized as cyclical.Brand Heineken Up 50% in Vietnam; 20% in China; Silver Success in APAC While Heineken took its lumps in Vietnam more recently, its flagship brand still "more than doubled" volume there over a short timeframe. Brand Heineken is up "another 50%" in Vietnam following "big interventions" and "executional strategy sharpening," according to Dolf, who called it "our third largest [Heineken] market after Brazil and China." The Heineken brand is also up 20% yr-to-date in China after selling over 7 mil hectoliters (~6 mil bbls) there last yr. And while Heineken Silver hasn't seen the same success in the US, Dolf highlighted its momentum across APAC region. For all the success of 0.0, "we're selling more than double the amount of Silver" there, he said. Africa's been a notoriously difficult mkt for many a brewer, but Dolf claimed no regrets regarding Heineken's Distell acquisition even if it's been "tougher than anticipated."NA Beer Poised for "20 Yrs of Compounding" and is "the Opposite of Seltzer" Heineken's leadership still sees plenty of global runway in non-alc beer, too. "To me, this is gonna be 20 years of compounding," said Dolf. "This is the opposite of seltzer, which kind of shot up and went down. This is gonna be low double digit growth" for 20 yrs, after which it could be 10-20% of the category, he figures. Dolf pointed to more developed mkts like the Netherlands, Germany and Spain where that's already closer to fruition. Heineken 0.0 is also "maximum 25% cannibalization, 75% incremental" and accretive from a margin POV due to lower excise tax, he added. Dolf touted current US test of Heineken 0.0 Ultimate (0 alcohol, calories or sugar) as entering "into territory where beer brands normally couldn't go. And first results look very promising."

Around the World in 30 Min with Heineken Ceo Dolf van den Brink at Barclays; US "Case in Point"

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