A few weeks ago, when observing the collapse in consensus Q1 EPS estimates, we noted that the "profit party" is over and the era of near-record earnings growth was about to end as a result of the recent barrage in profit warnings from US companies. One industry that has suffered in the earnings slowdown has been mass-market beer makers.
Beer companies, like Anheuser-Busch, MillerCoors, Constellation Brands and Pabst Brewing, have recently made significant cuts to their respective workforces, in response to slowing sales.
Brewbound is reporting that Heineken USA (HUSA) is the latest mass-market beer maker to announce significant layoffs.
HUSA spokesman Bjorn Trowery said in a statement that 15% of its entire workforce will be eliminated amid restructuring efforts.
“Today, we announced that we are modifying our sales team structure to align with our strategy and to enable more efficient ways of working,” he wrote.
“This will help Heineken USA be more cost effective, and allow us to reinvest behind our brands and business in the U.S. While change that impacts our people is always difficult, we believe these changes will better position Heineken USA for the future.”
Some indicate that big brewers are losing drinkers becuase millennials are switching to craft beers.
However, that might not be the case, as well-known craft beer companies, including Heineken International-owned Lagunitas, Deschutes Brewery, and New Belgium Brewing, have all recently cut a significant amount of their respective workforce, citing lowered growth ahead.
Industry-wide layoffs are a result of declining beer sales in the US. Though off-premise sales at retailers jumped 2% in 2018, according to research firm IRI, however, shipments of beer made domestically dropped 2%.
According to the latest earnings report, HUSA, the US operating company for Heineken International that imports, warned that its brands, as well as Dos Equis and Tecate, among others, could experience weak sales in 2019.
So did the American beer bubble just go flat?