Growth within the beer industry depends on an "equation" of factors which are more present in developing markets than in Europe and the US, Heineken CEO Jean Francois van Boxmeer told CNBC after the beer firm posted disappointing first half results, slamming the company's shares.
First half net and operating profits rose 5.7 percent and 3.9 percent respectively but were below market expectations.
Heineken shares fell by as much as 15 percent following the company's results. Click here for the latest Heineken quote in Dutch trading.
The Dutch brewer remains the market leader in Europe, but bad summer weather was blamed for a fall in European sales.
"Just look out of the window, we had an awful summer, but I have to refer to trading conditions and consumer confidence, particularly in the northern hemisphere, that's no secret and that dents," van Boxmeer said.
However, van Boxmeer said there was plenty to be optimistic about in newer markets, particularly in Africa; Heineken dominates in Nigeria and he pointed to Ethiopia as a recent target for the firm.
An equation of demographics, political and economic stability tends to dictate the fortunes of the beer industry on the African continent where the company first invested in the 1920s, he added.
"Our industry tends to be dependent on that equation of demographic growth, economic growth and political stability – that last part of the equation has improved a lot, it's still a difficult part, but it's improved a lot over the last decade and that is at the heart of our development in that continent ," van Boxmeer explained.
Focus on BRICS
The Heineken CEO rejected suggestions that the growth in emerging markets was insufficient to counteract losses in Europe and the US and he pointed to a significant shift in the company's investments over the last decade.
"If you look back five years ago, more than half was invested in mature markets, today 66 percent, two thirds of our group volume comes from emerging markets, so that's a big shift," van Boxmeer told CNBC.
"As you all know, demographics are not particularly exciting in Europe and they are very much exciting in Asia, in Africa and in Latin America, therefore the whole industry rebalances into these [regions]," he added.
Russia the Exception Van Boxmeer conceded that Russia remains a difficult market for Heineken where it is the third-placed beer maker behind European competitor Carlsberg, who have also lowered their forecast in the region despite being market leaders there.
"Russia is clearly one of the cases where we are struggling, we've been struggling now for eight years in a row, we have had a rollercoaster with good years and some minor years, but overall we're still there and we bounced back from a very difficult year in 2010, we gained market share this year, so all indicators for us in Russia are pointing in the right direction, but it's a long term haul," he said.
Foster's Overvalued?
Van Boxmeer refused to be drawn on whether SAB Miller's hostile $10 billion takeover bid for Australian beer firm Foster's was too high, but he hinted that Heineken were unlikely to offer that kind of amount given a fall in profits for Foster's and a general decline in the Australian beer market.
"We always look at all kinds of opportunities, but again we look at how is the equation of demographic growth, economic growth, economic stability working?"
"What is the growth potential in any given market and every given market comes at a price, that's broadly the kind of very simple estimation we make and you can draw the conclusions for yourself," van Boxmeer said.