If Beer = Emerging Markets, Heineken's Results Are Bullish

| About: Heineken N.V. (HEINY)

by Tim Seymour

The brewers know the best place to find growth is by targeting emerging consumers, which makes these stocks a great way to get exposure to that burgeoning global market.

For example, take a look at Heineken (HINKY.PK) and its latest operating results. The company’s net profit jumped 41% on what would otherwise have been a disappointing year — as the WSJ notes-- if not for the Dutch company’s acquisition of Mexico’s FEMSA, overall sales would have been down about 2%.

But overall sales volume actually surged 21% when you do count Latin America. And really, is there some rule that says a euro earned in emerging markets is somehow lower quality than a euro earned back in the Netherlands or the United States?

Heineken is making great strides in India and Africa, not to mention Africa and Asia. Africa in particular generated 9.1% more sales last year for the company, led by Nigeria and South Africa.

While some may worry about how the developed world — which still accounts for half the company’s revenue — is less and less thirsty for beer, numbers like these only indicate how well HINKY’s decision to focus on parts of the world-- where it can still grow its business-- is doing.

At this rate, the developed world will not be the bulk of HINKY’s business for too much longer, and then suddenly the grousing may stop.

Until then, it may even be interesting to track the markets where the brewers are seeing the most growth. If the brewers are proxies on the emerging consumer, then maybe their results can tell us where the emerging consumer is healthiest.

In that event, South Africa (NYSEARCA:EZA) and Mexico (NYSEARCA:EWW) may be due a bid from a consumer perspective.

Central Europe (NYSE:CEE), dominated by Russia, not so much — HINKY saw beer sales in the region plunge 6% year-over-year.

Disclosure: No positions