Benzinga - One of the most well-known and richest people in the world could be betting big on the growth of beer and non-alcoholic beer.
Here’s the brewer that Bill Gates is now investing heavily in.
What Happened: Gates, the renowned entrepreneur who co-founded Microsoft, has acquired a 3.8% stake in Heineken, the holding company that owns brewer Heineken (OTC: HEINY).
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Gates acquired 6.6 million shares through his own investment portfolio and an additional 4.2 million shares through his Bill & Melinda Gates Foundation Trust, according to a report from the European news site RTL.
The acquisition comes as Fomento Economico Mexicano (NYSE: FMX), also known as Femsa, is divesting its shareholding in Heineken to focus on its Coca-Cola Femsa (NYSE: KOF) and retail segments.
Gates previously invested in both Fomento Economico Mexicano and Coca-Cola Femsa as well, with investments from 2007 and 2011 respectively. The Bill & Melinda Gates Foundation are said to be one of the largest shareholders of Coca-Cola Femsa.
Femsa had a 12.3% stake in Heineken after selling its beer division to the company in 2010.
Why It’s Important: Heineken is the second-largest brewer in the world and the largest brewer in Europe.
The company has over 300 brands, including Red Stripe, Sol, Tecate, Tiger, Amstel, Dos Equis, Lagunitas and its flagship Heineken brand.
It sells in some 190 countries worldwide.
In a 2018 'ask me anything' on Reddit, Gates said he wasn’t much of a beer drinker, which means this is likely investing in something he thinks will go up in value, not a product he loves and uses himself.
“I am not a big beer drinker. When I end up at something like a baseball game I drink light beer to get with the vibe of all the other beer drinkers. Sorry to disappoint real beer drinkers,” Gates said at the time.
With investments in Femsa over the years, Gates likely saw firsthand the growth through organic and acquisitions that Heineken had. With Femsa exiting the beer business, Gates looks to make sure he has a portion allocated for his investment portfolio.
Heineken posted revenue growth of 30.4% in 2022. The company was led by premium beer growth of 11.4% year-over-year and Heineken brand growth of 12.3%. Management said the company’s volume has recovered compared to 2019 levels.
Going forward, Heineken expects modest growth of beer volume and operating profit growth in the mid to high-single-digit range for 2023.
One of the company’s key growth items is its Heineken 0.0, a non-alcoholic beverage. The drink was part of a Super Bowl LVII commercial done in partnership with Disney and its “Ant-Man and the Wasp: Quantumania” film.
Heineken claims it has the number one market share for non-alcoholic beer in the U.S., a region it is looking to grow its market share in.
No word on if Gates is a fan of the non-alcoholic beer from Heineken and if that is the reason why he’s investing in the company.
HEINY Price Action: Heineken shares are up 1% to $51.58 versus a 52-week trading range of $39.94 to $53.68.
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