Athenian Brewery – Price increases on the way – What’s up with barley

Greek consumers and to a smaller extent tourists saved the lot this year in terms of the beer market, however the good performance, which even exceeded expectations, have not yet managed to reach 2019 figures.

Nevertheless, Mr. Alexandros Daniilidis, CEO of Athenian Brewery, on the sidelines of the presentation of the results of the Sustainable Development Report 2019-2020 of the company, said he is optimistic about 2022 and as he characteristically said “we are planning growth”.

On the contrary, he appeared concerned about the evolution of the energy crisis with the successive shocks caused by the rally of gas and electricity prices.

There will be price increases

On the issue of shelf prices and whether they will be expected to increase due to the rise of packaging materials (aluminum and plastic) beyond this raw material (barley), Mr. Daniilidis clarified that there have been no increases in recent months with the company absorbing extra costs.

However, he considers it certain that at some point prices will rise, while he stressed that the Greek beer market is the 5th cheapest in Europe in mainstream products.

The company had proceeded to increases in February this year, but consumer price hikes did not exceed 1.5%, according to Mr. Daniilidis.

The barley battle

The purchase of barley also shows increased difficulties. Athenian Brewery is carrying out the first and largest contract barley cultivation program in Greece, having managed for many years to cover its production needs with 100% Greek barley.

However, this year there are deviations in the quantities agreed on with producers, as in the free market due to the shortages the prices have risen compared to the contracts. Thus the company increased by about 6% the prices it gives to the producers, in order to curb the tendencies of… escape.

According to Mr. Daniilidis, the company’s goal is to maintain a good relationship with the cooperating farmers, who number 2,000 in 19 prefectures of the country. After all, for 13 years that the contract cultivation program has been implemented, only for two years has the free market happened to offer higher prices, he commented.

But malt exports will also be lower in 2021, which last year moved upwards especially in markets such as Italy, Bulgaria and Israel. The reason for the decrease is the limited yields of barley and especially the increased needs of the company itself after the fall of 2020.

Because investments have decreased

Regarding the investment plan, due to the pandemic there was an adjustment. Specifically, as stated by the CEO of Athenian Brewery, from 43 million euros that was the budget for the period 2019 – 2021 will end up at 38 million euros at the end of the year, as in 2020 there was a “brake” due to prolonged lockdowns that significantly affected the size of the company.

It is recalled that for last year, the loss of sales volume in the domestic market for Athenian Brewery was 19.2% compared to 2019. This translates into a decrease in sales value by 18% to 274.4 million euros (including the excise tax on beer), while without the calculation of the special consumption tax net sales amounted to 179.1 million euros compared to 216.7 million euros in 2019.

Even greater were the losses in the company’s profitability, which, however, managed to maintain its positive sign. At pre-tax levels, profits fell 69.5% to 8.8 million euros, while net results fell to 6 million euros, down 75.6%.

Despite the difficulties, however, the course of exports of Athenian Brewery in 2020 increased by reaching 10% as a percentage of total turnover.

It is estimated that in 2020 the overall decline in sales for the beer industry reached 25%.

Sustainable Development all the way… from the field to the glass

Athenian Brewery declares its presence in the multi-level struggle of the climate crisis, applying for years a holistic approach, which combines economic with sustainable growth in the company’s entire value chain. The company maintains a vertical, “Greek route” of production, starting from the field, with the supply of raw materials and ending with the glass in which consumers enjoy its products.

Specifically, the strategy of the Athenian Brewery, as reflected in the Sustainable Development Report 2019-2020, focuses on the following pillars:

Suppliers

Great importance is given to the network of 893 suppliers, 96% of which are active in Greece, with 83% of the estimated value of payments remaining in-country. In addition, as part of the ongoing search for new, more environmentally friendly packaging, the company is focusing on the circular economy through recycling and reuse, having managed to return 95% of the bottles it sells.

Agriculture

Athenian Brewery started in 2008 to implement the first and largest contract barley cultivation program in Greece, having managed for many years to cover its production needs with 100% Greek barley. It has also made significant investments in Research and Development actions and has already achieved in 2020 to certify 35% of the total barley produced, as a product of good agricultural practice.

Production

In this context, it is continuously reducing energy consumption, achieving in 2020 compared to 2019, reduction of Scope 1 CO2 emissions by 21% (purchase and combustion of fuel for transport and storage needs) and respectively reduction of 14.4% for Scope 2 (emissions from the use of electricity). The company also recycled 89% of its waste. At the same time, it reduced water consumption by 21% for 2020 compared to 2019, but also emissions by 23%. In fact, at the level of further promotion and research of the phenomenon of water scarcity, it has designed and is implementing the “Water for Tomorrow” Program, which promotes Sustainable Development in practice, proposing solutions for the better management of water resources in Greece.

Transportation

The company steadily reduces carbon dioxide emissions through the optimization of loading practices and routes, resulting in a reduction of carbon dioxide emissions by 17% (compared to 2019). At the same time, it is upgrading its trucks by converting their engines to a combined consumption of 20% LPG and 80% diesel – instead of exclusively diesel – while electric forklifts are used in its facilities, in order to further reduce CO2 emissions.

Consumption points

For a decade now, the company has been using environmentally friendly “green” refrigerators and draft beer coolers, achieving up to 35% reduction in energy consumption, compared to the corresponding conventional ones.

Employees

The employees of the company are at the core of all the activities of the wider family called Athenian Brewery. The company is actively enhancing the safety culture at its facilities, having managed to avoid any accidents in 2020. Regarding the COVID-19 pandemic, Athenian Brewery proceeded to a timely adjustment of its entire operational model, with full adoption of teleworking, training , etc., in order to ensure the health of its employees and associates.

Finally, the company continues to focus on key issues such as the provision of equal opportunities, proving in practice its commitment to the values ​​of Inclusion and Diversity, including the signing in 2020 of the “Charter of Diversity”.

Consumers

The route, of course, ends with the final consumers of the products, with Athenian Brewery recognizing, as its main concern, the promotion of the culture of responsible alcohol consumption. The company works closely with groups and organizations, such as the Bartenders Association of Greece, the NGO “Sober – To our health”, etc., in public awareness campaigns on the subject, while it has established the category of non-alcoholic beer with 5 products.

All of the above are fully in line with the UN Global Compact for Sustainable Development, adopted by Athenian Brewery, aligning its actions with the Sustainable Development Goals (SDGs). In this context and looking to the future, a few months ago, it announced the adoption and implementation in Greece of the new, integrated strategy for sustainable development of the HEINEKEN Group “Brew a better world – Raise the bar 2030” with 3 main axes (environment, society, responsible consumption) and a series of ambitious goals for 2030.

As Alexandros Daniilidis, CEO of Athenian Brewery, emphasized: “For Athenian Brewery, as well as for the HEINEKEN Group as a whole, sustainable development has been a key priority and a firm commitment for decades. The 5th Sustainable Development Report of our company confirms the great steps we have taken as an organization, aiming at a sustainable future. Especially, in an unprecedented year, as it was in 2020 for the whole world, it is even more important that not only did we not make any kind of compromise, but on the contrary we made significant progress in the ambitious goals we have set. Moving into a new decade, in which the challenges we will face seem to be even more intense, it is now more imperative for large companies to respond not only to our productive role, but also to combine economic with sustainable development “.