Brewing company Carlsberg falls short of initial projections for the first half of the year, anticipating a challenging 12 months ahead.
Carlsberg, the world's third-largest brewer, has reported a decline in organic volume and net profit for 2025. Despite a strong reported volume growth of 16.0% due to acquisitions like Britvic, the underlying organic challenges are evident. The company's volumes decreased by 1.7% in the first half, and net profit declined by 4.7%.
The contraction in organic volume and marginal organic revenue decline (-0.3%) reflect tougher consumer demand conditions. Higher net financial costs and integration expenses from the Britvic acquisition have also negatively affected net profit.
Carlsberg's CEO, Jacob Aarup-Andersen, acknowledged the company's performance as strong in a difficult year. However, he anticipated slightly better volume growth in the second half. Despite this, he did not express optimism on consumer spending due to price increases and uncertainty.
The challenges faced by Carlsberg are not unique in the brewing industry. Shifting consumer preferences, economic headwinds, industry consolidation, sustainability trends, and digital transformation are shaping the industry's growth prospects.
Increasing demand for premium, alcohol-free, and low-alcohol brews is driving some growth, but overall volume growth remains weak or negative in key markets. Inflationary pressures and uncertain consumer spending are restraining volume growth, while strategic acquisitions and a shift towards diversification are adding resilience but increasing complexity and integration costs.
The growing emphasis on ESG practices, such as water reuse (Carlsberg increased this by 31%), is both a regulatory and consumer focus influencing investment and operations. Digital transformation and marketing innovation are key areas of investment to maintain competitive advantage and improve value management.
Carlsberg's shares declined by 5.8% after earlier falling as much as 6.7%, marking its steepest decline since July 2024. Despite this, Haider Anjum, analyst from Jyske Bank, was surprised by the share price reaction, considering Carlsberg's relatively strong performance. The company even raised the bottom end of its annual profit guidance.
In the face of these challenges, Carlsberg, like many brewers, will need to adapt and innovate to navigate the evolving consumer landscape, economic conditions, and industry dynamics.
[1] Carlsberg Q2 Report 2025 [2] Reuters, "Carlsberg misses half-year profit and volume forecasts," 2025 [3] Financial Times, "Carlsberg reports weaker-than-expected performance in Asia," 2025 [4] Barclays Research, "Carlsberg: Navigating a Tough Year," 2025
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