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Has Covid-19 changed the brewery sector forever?

The big brewers are emerging from lockdown into new challenges. Are there opportunities amid the uncertainty?
Has Covid-19 changed the brewery sector forever?

IC view of the brewery sector

  • Big brewers are fighting to clean up their image as the world looks for more environmentally and socially responsible practice
  • Will big company margins survive the shift to at-home drinking and what does that do to the investment case?
  • Featured companies: Heineken, AB InBev, Carlsberg, Adnams

What makes a great beer? The quality of the hops and the aroma they give. The balance of a smooth and frothy texture. The golden bubbles as the liquid is poured from the tap? 

Aficionados on the many beer rating apps and websites use these characteristics and many more to point peers in the direction of their favourite brews. But judging by the expenditure of the world’s biggest beer companies, the key in fact lies in the marketing. Over the last four years, Anheuser Busch Inbev (EBR: ABI), Heineken (AMS: HEIA) and Carlsberg ( CPH: CARL) - the three biggest breweries in the world - have spent an average of 11.2 per cent of their revenues on marketing and branding. For most of their beers, the recipe has not changed for decades.

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