The Brewers of Europe Forum

Carlsberg CEO: ‘Purpose, health and sustainability will define the future of the beer category’

By Rachel Arthur contact

- Last updated on GMT

Pic:getty/sbachstroem
Pic:getty/sbachstroem

Related tags: Beer, NABLAB, Carlsberg

Beer has a strong cultural heritage – and brewers have developed successful business models to allow them to grow and thrive - but this won’t be enough to assure the future of the category. Brewers will need to focus increasingly on the key trends valued by millennials in order to enjoy continued success, says Carlsberg CEO Cees ‘t Hart.

“Being very proud of our past doesn’t mean we have a great future. What got us here will not get us to the future,”​ he said, speaking at the inaugural Brewers of Europe forum in Brussels last week.

Instead, the industry will have to focus on three key trends particularly valued by millennials in order to be successful: purpose, health and sustainability.

Quality and image

Carlsberg has traditionally applied its ‘golden triangle’ of volumes, operating profit and growth margins to its business: balancing all decisions against these indicators in order for the company to grow.

But ‘t Hart now sees another triangle of key elements coming into play: purpose, health and sustainability. “These are the things that will really define the future of our category,”​ he said.

Highlighting the quality of beer will help the category stand out, said ‘t Hart.  

“First and foremost if we want to be successful in the future let's keep to the real quality of our products,"​ he said. "Quality is very important, talking positively about beer is important – and talking positively about each other’s beer is important as well.” ​Promoting beer in a positive light will help boost the category’s standing over competitors such as wine or spirits, he added.

And millennials also seek out brands and companies that have a purpose and clear values, and they want to work for companies that have a clear direction, says ‘t Hart.

“Millennials ask for a purpose: this is very different from the past. 30 years ago no one was asking for a purpose, but millennials articulate very well what they want from a company. I think for us it’s very important we really engage with millennials, understand them, and make sure our companies have a purpose.”

‘We can own the category between beer and soft drinks’

The increasing interest in health and wellness creates both challenges and opportunities for beer, said ‘t Hart.

“This is a new generation: they’re fit, they go out for a cup of coffee, they don’t go to the bar in the evening.

“We need to understand what health means for people. It means less alcohol intake. It means less sugar intake.”

This in turn could spell declines for both beer and carbonated soft drinks: but could open the door for new products that straddle the two categories. Carlsberg’s alcohol-free brew volume grew 23% in Western Europe over the last year, for example.

“So there’s an opportunity to come – a category between beer and soft drinks – and that’s what we can own,” ​said ‘t Hart. “We can brew the brews of the future… If we take the opportunity right, we say we are in between CSDs and beer with a soft brew, with clean labels, brews for lunch and for every moment. This could be the future for the brewing industry.”

Even in the struggling beer market in Russia, sales of non alcoholic beer grew 12% in 2016 (against a backdrop of 2% declines) and Carlsberg has been investing in brands such as its Baltika 0.

‘Let’s take sustainability seriously’

cees-t-hart-carlsberg-group-ceo
Cees 't Hart, Carlsberg CEO

Cees ‘t Hart says it is important to ensure the company has a sustainable business model. Its sustainability program, ‘Together Towards Zero’, sets out targets in four key areas.

It wants to have a zero carbon footprint (eliminate carbon emissions at breweries by 2030 and use 100% renewable electricity by 2022); zero water waste (including cutting water usage in breweries by half by 2030); zero irresponsible drinking (100% distribution of alcohol-free brews by 2022, as well as nutritional and ingredient information); and a zero accidents culture in its company.

“Let’s take sustainability seriously. It’s not a CSR report of the past, it’s tied into the being of the business,” ​said ‘t Hart.

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