Global drinks titans Diageo and AB InBev have reported overflowing sales after the easing of Covid lockdowns has driven punters back into bars.
Johnnie Walker maker Diageo posted net sales of £15.5bn, an increase of 21.4 per cent, which it accredited to the pub and bar sector recovering from the side effects of Covid 19 lockdowns.
It also benefited from drinkers’ opting for spirits and for premium brands and acknowledged “mid-single digit price growth driven by price increases across all regions.”
In Great Britain, net sales grew 20 per cent, as revellers flocked back to pubs and shoppers continued to buy drinks at supermarkets and shops.
Spirit sales were boosted 12 per cent, with a decline in gin offset by sales boosts for vodka, rum, Baileys and scotch.
The return of pubs saw Guinness sales elevated 52 per cent.
“We expect the operating environment to be challenging, with ongoing volatility related to Covid-19, significant cost inflation, a potential weakening of consumer spending power and global geopolitical and macroeconomic uncertainty,” Ivan Menezes, Diageo chief executive, added.
Elsewhere, the world’s largest brewer AB InBev posted EBITDA up 7.2 per cent for the second quarter, beating analyst expectations.
The Corona brewer put the boost down to the scrapping of lockdown restrictions in key markets and noted a double-digit percentage boost to profit in Latin American markets, including Brazil, Colombia, Mexico.
However, the brewer said volumes in North America and Europe were slightly lower, with European profits still elevated versus a year prior.
Many drinkers have been opting for pricer premium beers, despite the cost of living crunch, the brewer added.
AB InBev chief executive Michel Doukeris anticipated that costs for next year would not see as sharp of an increase as in 2022, Reuters reported.
“We always talk this idea that beer is an affordable luxury, especially premium beers. I think people are trading out or trading down much more in other categories at this moment than in beverage, than in beer. Beer remains very resilient,” he added.
AB InBev shares were down some four per cent on Thursday afternoon while Diageo’s share price was elevated three per cent.
It comes as Marston’s said earlier this week that there had been no dramatic change in punter sales at the UK pub chain since the onset of a cost of living crisis.
“In times of economic challenge, people look for flight to value” Marston’s boss Andrew Andrea told CityA.M.
Pubs were well placed to take up market share from restaurants as consumers pursue cheaper nights out, the CEO said.
What’s more, punters were still keen to pay for a quality experience. Even with price rises, drinkers were prepared to swallow higher costs if it was “the thing [they] want to do,” Andrea said.
There had “absolutely not” been a shift away from premium lager to more standard products, he added.