Hello, everybody, and welcome to the Heineken N.V. Q3 2026 Trading Update. My name is Elliot, and I will be coordinating your call today. If you would like to ask a question during today's event, please press star followed by one on your telephone keypad. I would now like to hand over to Tristan van Strien, Director of Investor Relations. Please go ahead.
Thank you, Elliot. Good morning, good afternoon, and good evening, everyone, from a bright and crisp Amsterdam today. Thank you for joining us for today's live webcast on our third quarter 2026 trading update. Your host will be our Chief Financial Officer and member of the Executive Board, Harold van den Broek. Following the presentation, we will be happy to take your questions. The presentation includes expectations based on management's current views and involve known and unknown risks and uncertainties, and it is possible that the actual results may differ materially. For more information, please refer to the disclaimer on the first page of this presentation, which should be on your screen. I will now turn over the call to Harold.
Thank you, Tristan, and a very good day to you all. What a great picture to start with. I am pleased that Rafa joined us as CEO on October 1st and is engaging fully with Heineken, as you can see. As you would expect, he will be listening, learning, and reflecting over the next few months and will share more of his perspective when we report our full year results in February. I am happy to host you for this quarter three trading update. Let me start with the highlights of the quarter. We delivered volume and revenue growth across all four regions, driven by priority markets, segments, and our global brands. Africa and Middle East delivered another quarter of resilient growth, while APAC continued its momentum. Europe continued with a return to volume growth, while the Americas returned to volume growth this quarter, both admittedly on softer comparatives.
We also execute at pace on our EverGreen 2030 priorities with accelerating innovation, stronger commercial execution, and simplification of our operating model. Against a broadly unchanged trading environment, we confirm our full-year operating profit growth guidance on operating profit growth of between 2% and 6%. Turning to the key metrics. In the third quarter, total volume grew 4.8% and net revenue increased 4.6%. Net revenue per hectolitre was up 0.7%, and I will expand on this later. Our premium and global brands portfolio grew double- digits. For the first nine months, total volume increased 2.7% and net revenue grew 3.4%. Net revenue per hectolitre was up 1.7%, and year to date, premium volume and global brands grew circa 8% and 7% respectively. Overall, we consider this to be a solid quarter. Let us now look at the net revenue in a little bit more detail.
Net revenue for the quarter increased organically by 4.6% to EUR 8.1 billion. The organic increase was EUR 336 million, with 286 million from consolidated volume and 50 million from price-mix. Just for reference, licensed volume growth would add about 20 - 30 basis points revenue for the quarter and 60, 70 basis points for the year to date. Turning to our pricing, where we consciously invest for the value-seeking consumer in selected markets and segments. This is partly why you see a lower contribution in the bar on this slide, as our net revenue per hectolitre grew 0.7%, as previously mentioned. An important other factor is the negative country mix, particularly driven by the strong growth in APAC, such as Vietnam and India, where revenue per hectolitre is below the group average.
On a constant geographic basis, price-mix was 1.8%, and that's a more accurate reference of our price-mix delivery market by market. Consolidation changes, particularly the integration of Costa Rica, added 182 million, and currency translation contributed 241 million, mostly due to a stronger MXN, BRL, NGN, and ZAR. Moving to the composition and quality of our growth. Our mainstream portfolio grew in the quarter with our local power brands outperforming the segment, led by Cruzcampo in the U.K., Bedele and Harar in Ethiopia, and Kingfisher in India. Heineken had another strong quarter, with double-digit growth in 22 markets. Heineken Ultimate 3.5% built further momentum in Brazil, broadening the brand's proposition with a lower alcohol, lower calorie, and gluten-free beer. Heineken 0.0 grew strongly with double-digit growth in 26 markets with encouraging contribution from recent flavor extensions.
More broadly, we recorded double-digit growth in low and no alcohol with innovative launches across the portfolio and strong performance from Fayrouz in Egypt and Sol Zero in Brazil. Beyond beer volume grew in the teens, driven by Bernini in South Africa and cider in the U.K. If I can spend a word on global brands, which are Heineken, Amstel, Birra Moretti, Tiger, and Desperados. All five brands grew in the quarter, and in aggregate, were up circa 10%. Heineken grew around 10%, with particularly strong momentum from Heineken Silver in Vietnam and China, while in Brazil, the brand returned to double-digit growth. Tiger grew more than 20%, supported by Tiger Crystal and strong execution across Asia.
Amstel grew by a high single digit, led by Brazil, China, and South Africa, and we extended our partnership with CONMEBOL Libertadores, leveraging the passion for football across Latin America to further build a brand. Birra Moretti and Desperados also delivered volume growth. If I now move to the regions and starting with Africa and Middle East. The region delivered another strong quarter of resilient growth led by Ethiopia and South Africa. Net revenue increased 6.8%, total volume grew 4.3%, and price-mix on a constant geographic basis was up 3.6%. In Nigeria, macro circumstances continued to weigh on the consumer, leading to subdued market conditions for our portfolio. Against this backdrop, we gained share and slowly we are seeing some gradual improvement in the economic environment. Within premium, Heineken and Desperados continue to perform well. South Africa continued to benefit from the strength of our multi-category portfolio.
Our beer brands, Heineken, Amstel, and Windhoek all grew in the quarter. Bernini remains strong in RTDs, ready to drinks, and Klipdrift performed well in spirits. Ethiopia again was a strong performer with strong double-digit revenue and volume growth, further building our leadership position. Bedele, Harar, and Heineken all contributed to this performance. Our business remains vigilant considering the threat of tensions in north of the country. If I now move to the Americas, as anticipated, this region returned to volume and revenue growth in the quarter, admittedly on softer comparatives. Net revenue increased by 3.1%, and total volume grew 2.1%, with price-mix at +2.2%. In Mexico, the beer category returned to growth. Our volume and net revenue grew modestly, and our market share trajectory is progressively improving.
An important contributor to our performance was stronger outlet execution, notably in our own Six network and with our traditional trade partners. Premium beer grew strongly, led by Miller High Life, while Tecate Original and Indio contributed to mainstream growth. In Brazil, the beer category recovered to positive growth in the quarter, and our volume increased by mid-single digit, with Heineken and Amstel both growing double- digit. The recent Heineken Ultimate 3.5% innovation is resonating strongly with consumers, exceeding volume expectations. Also, Heineken 0.0 grew in the high 20s. Overall, net revenue in Brazil grew in the teens. In Central America, the FIFCO integration remains on track, including delivery of expected synergies. In Costa Rica, our multi-category portfolio continued to perform well, supported by strong commercial execution across the entire portfolio. All in all, an improved quarter for the Americas with more work to do.
If I now turn to APAC, which continued its solid momentum we saw in the first half year. Net revenue increased 15.1%, with total volume growing 17.3% and price-mix on a constant geographic basis up 4.1%. Vietnam is strongly outperforming the beer category, growing mid-single digit. Our volume grew in the 20s, with net revenue up in the 30s, supported by share gains and continued growth in the premium segment. Heineken Silver and Tiger Crystal were the key leaders of the growth. India continued to build on its leadership position in a high-growth beer market, partially benefiting from an easier comparable following last year's heavy monsoon season. We are leveraging our scale and national footprint to capture underlying consumer demand and drive category growth. Kingfisher Ultra and Heineken Silver led the premium growth.
We are also encouraged by recent regulatory developments, that's a tongue twister, including more equitable excise treatment of beer in certain states. The country first-ever alcohol content-based tax system was implemented in Karnataka, boosting demand. As a beer industry, we continue to engage with the state governments on reforms that support the responsible long-term development of the category. In China, we delivered another quarter of sustainable double-digit growth and share gains. Heineken Original and Heineken Silver, and also now Amstel, show growth across geographies and channels. On the picture to the right, you see an example of the Heineken brand activation of the Rolex Shanghai Masters on the Bund, a real great sight. Turning to Europe, the region delivered another quarter of volume growth against somewhat softer comparatives, engaging with consumers through excellent summer activation and stepped-up innovation.
Net revenue increased 1.3%, total volume grew 0.6%, and price-mix was 0.1%. The latter held back both by negative channel mix in the quarter and intentionally restrained price-mix as we continue to focus on affordability for value-seeking consumers. In the U.K., volume grew on the back of our portfolio strength with Cruzcampo, premium cider, and Murphy's Stout as key drivers. Our pub platform also remains an important strength. Star Pubs continue to outperform the wider pub market, reflecting the consumer appeal of quality pubs and the strength of our Star Pubs operating model. Across Western Europe, excellent summer activation supported market share gains in the off-trade. We also continue to expand our participation in Beyond Beer, for instance, with the acquisition still subject to regulatory approval of a majority shareholding in Stëlz, a leading and fast-growing RTD brand in the Netherlands.
Earlier this month, we also announced a significant simplification of our European business. Following the successful pilot, we are moving from 23 operating companies to eight larger MMOs by year-end, combining local consumer and customer proximity with skill, capability, and productivity benefits. Finally, our outlook for 2026. The trading environment remains broadly unchanged, and we continue to operate against the backdrop of macroeconomic and geopolitical uncertainty. Our solid third quarter performance, with volume growth across all regions and further proof points of acceleration of our strategy, gives us confidence in our full year delivery. We therefore reconfirm our guidance of 2%-6% operating profit growth. Our outlook for all other metrics remain unchanged. Let me briefly summarize. We welcome Rafa as the new CEO, but he will be touring the world till the end of the year.
We delivered a solid quarter, with volume up 4.8% and net revenue up 4.6%. Growth was broad-based across all four regions and led by our priority segments and global brands. Premium volume grew double digits, while our global brands grew around 10%. Africa and Middle East delivered resilient growth, and APAC continued its strong momentum. Americas returned to growth and Europe delivered volume growth, both, however, on softer comparators. As Rafa said, we have strong foundations, and this quarter shows that. Yet, there is more to do. With that, thank you for listening, and we will be happy to take your questions.
Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If you would like to withdraw your question, please press star followed by two. When preparing to ask a question, please ensure your device is unmuted locally. First question comes from Edward Mundy with Jefferies. Your line is open. Please go ahead.
Hi, Harold. Hi, Tristan. Morning. Two questions, please. The first is, just on your guide for the year, which is obviously unchanged. I think you delivered at the top end of the guide, if not above the guide with H1, and you have now got a very decent Q3 under your belt. Can you perhaps talk to some of the moving parts, either on the cost or the investment side, that is holding you back from upgrading, or is this just an element of natural conservatism, given the uncertainty out there and with a big Q4 still ahead of you? That is the first question. The second question is around some of the learnings from the MMO rollout within Europe.
I think the commentary from H1 was very much about implementing and preparing for the rollout, whereas I think the commentary from Q3 is that the pilot has been successful and now you are scaling it. Does this give you more confidence to continue to drive scale within Europe?
Thanks, Ed. First on the guidance point. Indeed, it is more the latter to your comment. We currently are comfortable with the performance of our business. But as Rafa said, and I just closed with as well, there is more to do. We are very happy with our performance in APAC. We believe the Africa region is resilient, but we are not yet where we want to be in the Americas, and we are encouraged with the progress of quarter 3, but we will continue to invest in that part of the region in order to ensure that we are setting ourselves up for a healthy 2027. It is also a reality of the world that we are still living in uncertain times, and we often said control the controllable.
In discussions with Rafa, we felt that this message that we wanted to convey is this is another solid performance, and indeed, the first half was also solid, but we see little upside at this moment in time from narrowing the guidance because we are focusing on continuing our performance and investing in improving our performance, and that is what we will continue to do. Do not read more into that than what I just said, I would argue. Second to your point on the learnings of the multi-market organization, and we briefly touched upon it also when we last spoke. The European team has been extremely well-organized in making sure that we are first piloting before scaling. Earlier we brought four multi-market organizations together, and this has really been done very well with the management and the organizations on the ground to not lose focus on consumers and customers.
Because ultimately what we want to achieve is proximity with consumers and customers, but still leveraging scale and skill, as we call it, across the multimarket archetypes. This really has come true. So we started to learn from each other in terms of how we can drive better customer engagement, how we accelerate innovation, how we learn across, for example, on procurement synergies or advertising or activation synergies. This gives us confidence that actually building bigger units that collaborate closely together is actually the right path forward in our European structure. That has made Glenn and his management team very much, this has been carried from the bottom up, not from the top down only, decide to actually accelerate the implementation of it. Because we can see that together we can have more impact at a more cost-efficient organization model.
That is really the reason why we are now accelerating. As per the 1st of January, those MMOs will be up and running.
Thank you.
Thank you, Edward. As another reminder, if you'd like to ask a question, please press star followed by one on your telephone keypad. Today, we ask you to limit yourself to one question and one follow-up. Our next question comes from Simon Hales with Citi. Your line is open. Please go ahead.
Thank you. Morning, Harold. Morning, Tristan. My first question was just around Vietnam, where we clearly saw a very strong performance again in Q3. I think back at the H1 stage, Harold, you were suggesting at that point we shouldn't really extrapolate the H1 trend into the second half, but it seems to have clearly continued at pace. Can you just provide a bit more color of what you're seeing there, what you're doing versus the wider market? Is there any reason to think that volume growth for you will really slow significantly in Q4, particularly given we might see a bit of inventory build ahead of the excise increases in January that are coming?
Secondly, I appreciate this is a sales call primarily, but can you talk a little bit perhaps around some of the cost pressures you're perhaps seeing as a result of the elevated energy costs that we're seeing globally, both from a logistical standpoint in H2? Are you able to say anything about the COGS picture and your hedging position on your main inputs for 2027 at this point?
Yeah. Thank you, Simon. Indeed, based on the conversations with the APAC region and the Vietnam team, we indeed said, "Look, half one has been great, but it has also been a strong Tet." It was some of the easier comparisons. We don't know what the market is going to do. You've heard me all say that. Frankly speaking, we were also positively surprised with the strength of the growth coming through this quarter. I still remain rather cautious because I'd rather be wrong on this side of the equation rather than be over bullish, overconfident, because I still remember the scars that I carry in 2022 to 2023. Just to reassure, this is also important for you to know, we have put real metrics in place to look at distributor visibility, freshness of the product in these markets, understanding the drivers of our growth.
Then comes to the question, we are starting to see very significant share momentum in Vietnam. But we also know that Vietnam is a very competitive market, and we also see competitor entries coming in. I don't want to be overconfident, but what I am going to convey is that we're very, very pleased with our Vietnam performance at this moment in time. It really is still the case that the market is growing, very importantly, both on and off trade in the mid to high single digits. But on top of that, we are therefore gaining considerable share in our stronghold markets and are starting to expand a little bit outside of our stronghold markets and also see that taking effect. Now, we're not taking that one for granted, so I would still argue, please don't extrapolate into quarter four.
There is excise coming, there is uncertainty, but we are confident that the Vietnam teams are doing what it takes in order to really compete very well in the Vietnamese market. I do not know what the macroeconomic outlook brings. What I do know is that excise will happen in 2027. Personally, I am a little bit more cautious, and I do not think we should continue to see 20% growth rates in Vietnam. On the cost pressures, we have spoken about this at the H1 as well, and you will have seen as much as I do that the higher energy and transport costs will remain a factor, not only for the balance of this year, but also going into 2027. We have, of course, increased our productivity agenda in order to compensate for that.
It is very important to know as well that we are not cutting any of the marketing or sales investments, and that is really what we use our elevated cost and productivity measures for. But we are seeing a significant elevated cost in parts of the world. This is particularly true in APAC. It is also particularly true in some of the African markets, but we also start to see the impact of that happening now in Europe as well. Our hedging positions for 2027, I will give a full commodity cost outlook in the full year results, but we have not changed our hedging policy, and that does mean that we are covering the majority of our hedges already for 2027 around this time of the year. You should think about 80%-90% of commodity, but also currency transactions have been covered.
Got it. Thanks, Harold.
We now turn to Sanjeet Aujla with UBS. Your line is open. Please go ahead.
Good morning, Harold. A couple from me, please. Firstly, I think you started the year quite cautious in your outlook on Mexico and Brazil. How has the category evolved relative to your expectations at the start of the year, and also your market share performance there as well? That is my first question. My second question is just going back to the comments there on the cost outlook for next year. Is it fair to say you are leaning more to absorb that through productivity measures as opposed to headline price increases? Thank you.
Yeah. Good questions, Sanjeet. Thank you. Maybe starting with my view on the Americas. Just for the people on the call to just play back a little bit why we started with a more cautious outlook on the Americas at the start of this year. That was basically driven by two reasons. Firstly, the macroeconomics. High interest rates, uncertain political situation, a difficult read on the U.S.A. in particular, but also the spillover of that into Mexico made me much more cautious on the Americas than what I saw happening in other companies' outlook. I personally have been a bit surprised on the resilience of the beer market in Q3, and was very happy to see that both Mexico and Brazil were returning to growth.
But what I also believe, speaking to our Mexican and Brazilian teams, and you will have seen the currency in Brazil also reacting to the latest elections, is that it's still very fragile. Also, Rafa was there on the markets visit a couple of weeks ago, and he basically said, "Look, there is still quite a bit of economic tension in the Brazil market." So I remain, yeah, a little bit conservative perhaps on the outlook of the Americas because I don't think that we've turned a corner to consistent positive category growth just yet. What I do believe is that both ourselves as well as the industry at large are investing quite a lot to make sure that we stay relevant to the consumer.
This is true in terms of pricing management, because part of the reason why we are having to recover market share is that we created to some extent our own price volatility, as we've spoken about, and we are repairing that. So I'm pleased with some level of market share progress, but not yet where we need it to be. But I also think innovation is playing a really key role. For instance, you see the Heineken Ultimate Gluten Free really resonating. You also see Praya really resonating. Amstel Ultra really growing very fast in a very health-conscious environment, for example. So I do believe that all of us, including the industry, is doing the right things to make sure that affordability takes place, but also that innovation and activation is at the standards that you would expect to bring the people back to the category.
So that's how I see it. Fragile, but we're doing the right things. In terms of the cost outlook, I believe that we have found the right balance between investing in affordability but also making sure that we take measured pricing, particularly through mix management and, let's call it not straight visible pricing. For example, through pack price architecture and innovation-led pricing. That is probably what you will expect from us going forward as well. To find the right balance between pricing, I would probably put it at anywhere between 70% and 90% of CPI that we're going to target for, but also to continue to work on productivity in order to make sure that we can build the brands.
Because ultimately, it's not about lowering the price, it's really bringing value back in the brands, and that we can do through innovation, quality activation, and that's what we will also invest in.
Great. Thank you.
Our next question comes from Trevor Stirling with Bernstein. Your line is open. Please go ahead.
Pardon me. Hello, Harold. Two questions, Harold, one on Brazil and one on Mexico, sorry, one on Vietnam. In Brazil, you mentioned about the category growth. Is that both sell in and sell out that you're seeing the category growing? Then can you talk maybe a little about the share trends in Brazil? Then in Vietnam, with that level of volume growth, is there any risk of you hitting capacity constraints? I'm guessing probably not because of the prior weakness of the market, but I'd be intrigued to find out that question. Again, you've got, I think it's from memory from looking at the rest, pretty, very strong price-mix in Vietnam. Are you starting to get some operating leverage in Vietnam given that level of volume growth and that very strong price-mix?
Yeah. Very good. Let me first talk about Brazil. The Brazil market in Q3 was indeed both up in terms of sell-in but also in sell-out. I can confirm that in Q3, we did see an uptick, both in terms of total industry, all the data we're looking at. So that's a positive signal. As I just said to Sanjeet as well, we also know that the weather, I'm not going to call out the weather as an excuse, but has not been terrific in Brazil at the moment. So I am still cautious on the volume outlook in the fourth quarter in both Brazil and Mexico, just to put a fine point to it, Trevor. But hoping that I'm wrong, clearly. Then in terms of Vietnam, no, we're not going to run into capacity constraints just yet.
We had plans to already upgrade the investment some time ago. So we're on standby to do that relatively efficiently and therefore can handle the volume increase. This, just so that you hear it from me as well, is not so easy as I make it out to be. So our Vietnam teams are doing a lot of juggling to make sure that they can fulfill the demands, but I don't see that as a constraining factor to continue the momentum in Vietnam. I think the point on price-mix is a very relevant one, because what you currently see happening in Vietnam, and is the driver of growth, is both Heineken and Tiger Crystal, is really leading the premium segment again. This is in part also the fact that there is healthy and stable economics happening in Vietnam.
A stable government investment in bringing the Vietnam economy to higher levels of value accretion. And this is all boosting consumer confidence. This is good not only for beer consumption, but also the type of beer consumption is conducive to the premium segment, which is of course where we're leading. So we're very happy with the market dynamics and our own performance. To your point of price-mix, this is indeed creating some operating leverage, but also we're investing behind the growth. So I said before, Trevor, that we should not return to the levels of 40% operating margin in Vietnam, and that's also not what we're foreseeing in the future. We rather invest back in order to cater for more growth in Vietnam.
Super. Thank you very much, Harold.
Thanks, Trevor.
We now turn to Laurence Whyatt with Barclays. Your line is open. Please go ahead.
Good morning, Harold and Tristan. Thanks very much for the questions. Firstly, I'd like to ask about both Brazil and Mexico. You noted the improvement you've seen there. I'd love to hear your comments on the recent presentations by some of the people in your industry around those markets, where the technology seems to have stepped up quite a bit with regard to being able to target customers, target different accounts. The last time you outlined your technological prowess was at the Capital Markets Day last year, and just wondering how you think you compare against the peer set within Brazil and Mexico, to be able to go back to gaining market share in those two key markets.
Secondly, there was an interesting comment or statement from Rafa in the statement that was put out this morning, suggesting quite a bit of a culture change within the organization. I'd just love to hear your view as to how you think Heineken might respond to a bit more of a performance-focused culture coming from the new CEO. Thank you.
Thanks, Laurence. In terms of the, let's call it, the digital route to market capability that we have in both Brazil and Mexico, our teams are relatively confident that we are in the competitive zone. That we judge not only from the interactions that we have with the outlets, but also we very, very diligently measure the Net Promoter Score, whether people feel that they have the tool and the equipment and the services that we are providing, whether it serves their needs. Those Net Promoter Scores are firmly in the positive and very comparable to, let's call it, the industry average. I think you know what I mean there. We are, of course, monitoring this very tightly. We also, I made a comment earlier that the growth in Mexico, for example, was really driven by traditional trade outlets, our Six stores comparison.
We are really looking at this from almost an outlet by outlet point of view, and that is where our digital information is helping us greatly to really look at recommended assortment, pricing compliance, cashflow management, and we are really getting, yeah, some positive responses from customers. We are not taking this for granted. We are very much looking at what is the next stages in that development.
I do not want to use past trajectory to also project forward, because we know that the world of AI is not standing still, but at present, we are competitive, and that is also what the customers are telling us. In terms of your statement for Rafa. Look, he was quite intentional putting that on the front page of our results announcement. Frankly speaking, it is also something that I just want to emphasize, but it is not the only thing that he said.
The starting point was his first impressions are positive because he likes the strength of the brands, the commitment of the people, and the potential that he sees across the geographical footprint, and that is what he is confirming as he takes the Rafa selfies with the people around the world. What he is clearly indicating is, yeah, we have solid foundations, but there is more to do. We are not translating them into consistent growth and winning with consumers and customers as often as we should. I do not think that is a surprise to you because you have been telling us that also for the last couple of years.
What is the case is that our performance culture needs to step up, and this is really simplifying the narrative, simplifying the operating model like we just talked about Europe, and basically be very specific about where we see opportunities, how we go after them, and who is accountable for it. That is the point that he wanted to make. Greater accountability across the business is part of accelerating speed, but also impact in our organization. More of that to come in February.
Super. That is really clear. Thanks, Harold.
We now turn to Olivier Nicolaï with Goldman Sachs. Your line is open. Please go ahead.
Good morning, Harold, Tristan. Couple of questions, please. First of all, could you give us a bit more color on your performance in Africa, particularly in Nigeria, if you were expecting improvement in Q4? Then going back to South Africa, how long do you think it would take for that drag that you had from wine to disappear? Because I remember you already have rationalized the portfolio post the Stëlz acquisition. Secondly, on the acquisition of your majority stake in Stëlz, can you elaborate a bit more on the strategic rationale there? Does this represent the beginning of a more meaningful string of acquisition in RTDs or hard seltzer? Thank you.
Yeah. Very good. Different questions, Olivier. Good to hear you. First of all, yeah, let me again acknowledge the African business, because I think they are managing really the portfolio extremely well. As Tristan always likes to add, this is real euros that we are also seeing being reported. So that is important. The reality in Nigeria is exactly like you indicated, Olivier. Our performance is actually very positive, because our market shares across lager, across stout, across malts are actually increasing. So we are building a better business. As you will recall from many conversations in the past two years, we have completely repaired the balance sheet. We are managing the cash flows very well, and we are lowering the cost base. That is also necessary because the ultimate thing that is currently happening is that people just do not have the money to enter into the category.
That has to do with the macroeconomic fundamentals more than with our portfolio. The moment we can make beer affordable for more people, we will start to see significant operating leverage coming back into our system. Just as a case in point, the average consumption in Nigeria is 5-6 liters per capita per year. With 200 million people, that's a lot of opportunity that is there. We do need to ensure, and that's why we're also not fully pricing, because the currency has been stable and the inflation is coming down. Our first priority there is to invite consumers back into the category. We are the ones that hopefully will welcome them when it is possible. That really is the reality in Nigeria. Team is doing well, but we're really working very hard to bring volumes back into our business.
In South Africa, what you do see in South Africa is recovery and actually strong performance this quarter on beer across all the brands. Our RTD business is doing well, and in selected parts of the spirits business, Klipdrift is doing very well. You're right that wine continues to be still a drag on the portfolio. This is a very important part of our business, so we are not making rash decisions on what to do, but we do have it under strategic review, because we are looking at the relevance of wine in our total beverage portfolio, and how we are going to compete in certain segments of the wine, is an active discussion with our South Africa business. Once we have made a decision, we will update you on that, but we are going into the granular detail on how to win in or with wine.
What I would add to that, Olivier, it's not just the categories themselves, but also how we build cross-category advantages that create more-
Yeah
Value than stand-alone businesses and really shape the beverage profit pool. Yes, we can look in wine in isolation, but to understand how it can help us in our total portfolio as well.
That is a good bridge to your Stëlz's question as well, because what we are starting to become much more cognizant of is changes in consumer behavior that are starting to happen in some markets. That is why in South Africa, in Costa Rica, we are really looking at multi-beverage part of the portfolio. In the Netherlands, we really saw that there was, with the younger consumers starting really in the university cities, a fantastic momentum being built behind the Stëlz brand, which is a hard seltzer, is how it started with. We really saw a very big momentum starting to be created. To your point, there is a strategic rationale with it. Not only younger consumer cohorts, different product formats, but also different marketing capability that we receive coming in.
Because this was really about city-by-city marketing, influencer strategy, dance events, for example, and that is what we are starting to learn. It is therefore also very important that since the initial stake that has been created in, what is it, three years ago now, we really have worked and collaborated closely with the founder fathers. But not fully integrated it into our operation, because this is something that we really want to learn and not, in a way, put our beer perspective on an adjacent category.
That is why we have really been learning and scaling this. Now, to your point, will we see more of this coming through in different markets? We hope so. It is too early to say what we are going to do, but it is a very interesting business model that we are starting to learn, and we will certainly look to replicate this across selective other markets.
Thank you very much.
Thanks, Olivier.
As another reminder, if you would like to ask a question, please press star followed by 1 on your telephone keypad. We now turn to Chris Pitcher with Rothschild & Co. Your line is open. Please go ahead.
Thank you, Harold, and morning, Tristan. Two from me. Firstly, on India. You talk about increasing penetration. Does that mean the volume growth is coming disproportionately from your contract brewing partners, obviously with a dilutive effect on revenue per hectolitre? Are you able to give a split between the licensed and the consolidated volume performance there? As a follow-up to that, how are you doing on your brewery expansion, both within existing territories and new ones? Then just a quick follow-up on the questions around Europe. Could we expect operating margins to start expanding again in Europe like they were doing before the pandemic?
Thank you, Chris. Good questions as usual. Let me first make a more general comment on India, because the split between contract brewing and our own brewery operations is really a mix between, to be honest. You heard me calling out in my readout on the quarter 3 transcript that the impact of our license volume in India was lower in quarter 3 than it was on the year to date. That really is driven by consumer demand and state mix. I would not read too much into that strategically. It really is a factor about pricing, the discussions that we have on regulatory, hey, I can say it this time, but regulatory issues that we are working our way through. You actually see quarter by quarter quite a lot of variety between which states are growing and not growing, because this is still an emerging industry.
Do not read too much into the contract brewing or the non-contract brewing. I think the overall point still stands, and that is the category is in high single digit, if not double digit growth, because we start to see the impact of normalization in the category and the opening up of the market more so state by state, and Karnataka was a good example of that. Our brewery expansion model is on track. A mix between contracts and own brewery footprint is what we are going after because you are well aware that we are the most represented player in that market. We are actually not supply constrained, and we are catered for the growth that we currently see in India with a combination of the best local brand, but also international brands that we can brew in that estate. We are very positive on the India outlook.
And we're managing the contract brewing really as a strategic asset, not as an operational asset. That perhaps is an important addition to make. On Europe, I think what Glenn and the team has shown this time around is that there can be excitement in the category. With the right activation, the right innovation, we can bring this category to growth. The consumer is still very price conscious, so we're not getting yet the price leverage or the mix leverage that we would like to see coming through in the longer term. We need to be a bit more patient on that. You also know that regulatory costs are quite a significant burden together with energy costs in the European business. So we're working very hard to create efficiencies in the European system that progressively will bring us operating margin expansion over time.
And that's what we're looking at. We do that step by step. Don't expect miracles overnight, but do expect progress to continue.
Thank you, Harold. Very clear.
Thanks, Chris.
I think that was the last question. Correct, Elliot?
Yes, we have no further questions.
Perfect. I want to thank you for your interest, and I very much look forward to seeing you at our full year results in February. Thank you all. Have a good one.
Thank you.
Ladies and gentlemen, today's call is now concluded. We would like to thank you for your participation. You may now disconnect your lines.