Beer Industry
October 23, 2012
Global: Beverages: Brewing
Equity Research
Beer bifurcation – separating the fizz from the flat
Not all EMs are created equal
We prefer EM exposure to DM exposure for beer. However, we believe it is increasingly important to differentiate between structurally attractive and structurally unattractive EMs and DMs.
SABMiller looks best positioned
With the most material exposure to early-stage EMs, as well as a relatively attractive DM portfolio, SABMiller is in our view the best positioned of the global brewers. Heineken has some of the most attractive EM exposure, offset by some of the least attractive Western European exposure. ABInBev lacks long-term growth in its EMs but has a more attractive DM portfolio than all except SABMIller. Efes has high EM exposure but not to our preferred regions, while Molson Coors has the lowest EM exposure. Carlsberg combines some of the least attractive DMs with the least attractive EM exposure overall, due to its reliance on Russia. GS SUSTAIN industry positioning
RELATED RESEARCH
ABInBev: Quality at a price – down to Sell on valuation, October 23, 2012 European Consumer Staples: Better than ever: Why quality staples stocks deserve an increased premium vs. history, October 23, 2012
Some EMs might already be DMs
Beer is an early-stage consumer staples category, typically achieving its strongest growth early in a country’s economic development. Several major EMs, including Russia, Brazil, South Africa and Mexico, are already close to DM consumption levels for beer, meaning the structural growth opportunity has a short time horizon.
Company ABInBev Anadolu Efes Carlsberg Molson Coors SABMiller
Rating Sell Neutral Sell Neutral Buy
PT € YTL Dkr $ GBp 62.5 25.5 493 47 3,525
Price Upside 65.9 ‐5% 26.9 ‐5% 513 ‐4% 44 7% 2,638 34%
Source: Datastream, Goldman Sachs Research estimates.
Africa and India are the most attractive
Early-stage EMs such as those in Africa and India combine
Global: Beverages: Brewing
Equity Research
Beer bifurcation – separating the fizz from the flat
Not all EMs are created equal
We prefer EM exposure to DM exposure for beer. However, we believe it is increasingly important to differentiate between structurally attractive and structurally unattractive EMs and DMs.
SABMiller looks best positioned
With the most material exposure to early-stage EMs, as well as a relatively attractive DM portfolio, SABMiller is in our view the best positioned of the global brewers. Heineken has some of the most attractive EM exposure, offset by some of the least attractive Western European exposure. ABInBev lacks long-term growth in its EMs but has a more attractive DM portfolio than all except SABMIller. Efes has high EM exposure but not to our preferred regions, while Molson Coors has the lowest EM exposure. Carlsberg combines some of the least attractive DMs with the least attractive EM exposure overall, due to its reliance on Russia. GS SUSTAIN industry positioning
RELATED RESEARCH
ABInBev: Quality at a price – down to Sell on valuation, October 23, 2012 European Consumer Staples: Better than ever: Why quality staples stocks deserve an increased premium vs. history, October 23, 2012
Some EMs might already be DMs
Beer is an early-stage consumer staples category, typically achieving its strongest growth early in a country’s economic development. Several major EMs, including Russia, Brazil, South Africa and Mexico, are already close to DM consumption levels for beer, meaning the structural growth opportunity has a short time horizon.
Company ABInBev Anadolu Efes Carlsberg Molson Coors SABMiller
Rating Sell Neutral Sell Neutral Buy
PT € YTL Dkr $ GBp 62.5 25.5 493 47 3,525
Price Upside 65.9 ‐5% 26.9 ‐5% 513 ‐4% 44 7% 2,638 34%
Source: Datastream, Goldman Sachs Research estimates.
Africa and India are the most attractive
Early-stage EMs such as those in Africa and India combine