A report from Moody’s has predicted that the operating profit of major players in the global beverage industry is likely to grow between 4% and 5% on an organic basis over the next 12 to 18 months.
The ratings agency said that the outlook ‘reflects economic pressures in some emerging markets and modest growth in others’.
It added that it expects some volume declines in developed markets and in mainstream beers, vodka and carbonated soft beverages, however the spirits industry and premium beer markets will continue to drive growth.
Moody’s also added that beer consolidation is likely to lead to greater cost-cutting in the drinks sector.
‘The large beer M&A deals that closed in 2016 will lead to multiyear programs to integrate and cut costs. Moody’s does not expect these efforts to provide as much uplift to earnings growth as in other sectors, such as food, but the improvements will help keep operating growth rates ahead of those for revenues,’ it said.
© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. To subscribe to ESM: The European Supermarket Magazine, click here.
