Yesterday the Danish brewer reported Q2 sales up % year-over-year to DKK 19.64bn ($3.5bn) in the year to June 30, while shareholder profits adjusted for special items after tax slumped % to DKK 2.074bn.
Carlsberg is rolling out hard cider Somersby internationally “with promising results” alongside other international premium brands including Carlsberg, Tuborg and Kronenbourg 1664. In the UK it goes up against Heineken's market leader Strongbow.
Growth was due to an increased geographical footprint and marketing activations, Carlsberg explained, with CEO Jørgen Buhl Rasmussen making especial mention of the brand.
“We talk about Somersby more now than we did a year, two years ago. It’s simply based on the fact that it is now in more than 35 markets, I believe,” he told analysts on a call yesterday.
Somersby selling ‘extremely well’
Buhl Rasmussen refused to give numbers – in terms of sales or profitability – when asked by Casper Blom, from Handelsbanken Capital, but added:
“So broad distribution in many of our markets, it’s doing extremely well in a lot of our markets and therefore we’ve talked about Somersby a little more and we have a number also in the release talking about 85% growth in H1 compared to last year.”
Elsewhere, Carlsberg pointed to challenging market conditions across Europe and non-permanent kiosk outlet closures hitting sales in Russia more heavily than the company had anticipated.
Consequently, the firm says it expects Russian beer volumes to post a mid-single-digit percentage decline in 2013 – with volume sales 7% down in H1 – as slower growth and more cautious consumer sentiment also bites.
But Russian sales slump…
That said, Carlsberg won market share in key market Russia – up 1.3% to 39.2% – seemingly at the expense of rivals AB InBev, SAB Miller and Anadolu Efes, and expects sales to pick-up as new sales channels for beer replace the lost kiosks.
Deputy CEO and CFO, Jørn Jensen said:“If I take us specifically, we are being negatively impacted by Baltika 7 being a very strong SKU in kiosk and pavilion segment, so that’s having a negative mix impact.”
Discussing Russian beer retail disruption, Buhl Rasmussen added:“Yes, it was worse and is taking longer than we expected. But we also think that as soon as the consumer gets used to this new landscape it will not have a negative effect on the [beer] category.”
New permanent stores were starting up that sold beer alongside some grocery products, he said, which could be a positive development, while Russia’s per capita beer consumption was still low and vodka consumption still falling.
“60 liters is very low compared to many other countries and therefore we strongly believe there will be a time where we get back to growth again in Russia,” Buhl Rasmussen said.
N.B. For the benefit of our international readers, the title 'Drink Up Thy Zyder' refers to a song written by UK band The Wurzels, who hail from the cider-producing county of Somerset.