Swinkels Family Brewers continues to invest in the future despite disappointing results in 2020

 

04-22-2021

A year in which the family brewery managed to cope with the crisis shoulder to shoulder

After a festive year in 2019, 2020 was a very challenging year for Royal Swinkels Family Brewers. The brewer was hit hard by the COVID-19 pandemic. The measures to reduce COVID-19 caused a large part of the turnover to evaporate. Despite the major challenges, the family business has continued to show its entrepreneurial spirit in these times of crisis. The main goal, alongside the health of its employees, was to come out of the crisis stronger together by acting quickly and continuing to invest in the future. 

Swinkels Family Brewers CEO Peer Swinkels: “The pandemic has had a huge impact on our employees, our business relations and our company. Our biggest success this year is that we managed to navigate through the crisis without losing sight of the long term. This is mainly due to the drastic cost-cutting measures we have had to take. As a family business, we have also always kept our focus on continuity and the long term. Together with our employees, we have worked hard on innovations, often at a distance from each other, we have seized opportunities in the online channel, and made adjustments in the market. As a result, we were able to cushion the decline in sales somewhat. I’m therefore particularly proud of the commitment and flexibility of all our employees in a very difficult year. Especially in countries where we normally have a relatively high turnover in the hospitality industry, we were hit hard by all the measures taken by local governments in connection with COVID-19. With our beer operations in more than 120 countries, we also achieved good results in several countries around the world. Our malt division achieved a good result due to the good location of production sites and the geographical spread of customers. 2020 was undoubtedly the most challenging year in decades for our company, but with the right interventions, we were able to post positive figures. We were also able to keep an eye on the environment and continue to build on our strategy and circularity ambition.”

Financial results 
The total Swinkels Family Brewers Group posted net sales of €773 million in 2020, a decrease of 14% compared to 2019. EBITDA decreased from € 94.2 million in 2019 to € 70.0 million in 2020. 

One strategy, three divisions and dozens of challenges  
All three divisions, Swinkels Family Brewers, Holland Malt and Habesha, were faced with the consequences of declining beer consumption.  

Swinkels Family Brewers saw a varying impact in the various business units around the world as a result of the virus. In the Netherlands and Belgium, where the division is most active in the hospitality industry, the consequences of lockdowns and closures were felt. In other European countries, such as France and Italy, retail is an important sales channel. As a result, the brewer did relatively well in these markets. Because Asian and North American governments made different choices than many European governments, the impact of the pandemic was limited here, and sales even increased compared to 2019. Unfortunately, the countries with a relatively good result could not absorb the drop in sales in countries with more hospitality dependence.

Nevertheless, the division kept innovating and new beers were introduced. The successful Cornet was extended with a true beer experience called Corned Smoked. The brewer entered the hard seltzer market with Spijked& and after an intensive process of brewing even better non-alcoholic beers, a new 0.0 brewing installation was taken into use. The new Palm 0.0%, Swinckels' 0.0% and Bavaria 0.0% were the direct result of this. Because shifting to online meant an enormous acceleration due to COVID-19, Swinkels Family Brewers ensured that it scaled up on this channel as well. The result: online sales increased fivefold. 

Holland Malt also experienced the effects of the pandemic. The falling beer consumption affected the need for malt worldwide. However, because of earlier strategic choices, such as the decision to operate in many different parts of the world and market segments, Holland Malt managed to keep the loss of volume to a minimum. In addition, the strategic location of the Eemshaven malting plant and the investment in Lieshout malting plant to supply more craft and speciality malt contributed positively. As a result, the profit in 2020 was even higher than in 2019. Holland Malt continues to see good opportunities for further growth and will continue to work on sustainability.

Political upheaval and tension affected the economic situation in Ethiopia, which also affected the sales of Habesha's products as well as a sharp increase in excise duties. In addition, as a result of COVID-19, this division had to make a major adjustment in distribution, as it was completely focused on catering outlets in a country where drinking at home is not common. The distribution was quickly moved to neighbourhood shops in order to still achieve a sales channel. Investments were made here too, with the introduction of the Kidame brand, a light and refreshing beer, and the introduction of Habesha as a draught beer.

Promising results in the area of circularity 
Swinkels Family Brewers always has a long-term vision in mind with the aim of passing on an even better family business to future generations. Circular entrepreneurship is one of the strategic pillars and focuses on circular purchasing, circular production and high-quality reuse. The progress of these three core processes is monitored via the Swinkels Circularity Index, which allows the brewer and malt to calculate the extent to which it is already doing business in a circular way. The family business is well on its way to achieving its sustainability ambition of 75% circularity by 2025. In 2020, Swinkels Family Brewers achieved a percentage of circular entrepreneurship of 52%, amply achieving its target of 50%. The brewer scored 40% in 2019 according to the SCI.

Peer Swinkels: “Our aim to pass on the brewery to the next generation in the most circular way possible also includes taking care of our environment. During the crisis, for example, we made hand gel from the tank beer recovered from catering businesses in the Netherlands. We used the hand gel to support 1,200 healthcare institutions throughout the country. At the beginning of the crisis, many healthcare institutions were facing acute shortages of disinfectant. This is an example of an initiative that came from the heart and is also perfectly in line with our concept of circularity. We want to add lasting value to the world around us. We noticed that especially now, in times of crisis, we stand shoulder to shoulder and achieve a lot together. With colleagues as well as business relations. We will continue to invest in growth and sustainability. This is how we will invest our way out of the crisis.”

Click here for more information on the sustainability ambitions of Swinkels Family Brewers and the results achieved in 2020. 

View the 2020 annual report 'Shoulder to shoulder' here.