A World Cup without beer is like cricket without Pimm’s.
Or a night out in Essex without an alcopop.
But how much does hosting a World Cup football tournament actually boost local beer sales?
According to Sanford Bernstein analysts Trevor Stirling, Joao Valli and Melissa Yates, the World Cup-beer-boosting effect can be quantified to exactly 180 basis points on average:
What’s more, if a host nation performs well during the Cup (think France in 1998, South Korea in 2002 or Germany in 2006) beer sales do even better. As Bernstein succinctly puts it, more matches = more beer. Here’s the graph that says so:
If you’re wondering what all this means specifically for South Africa, which will host this year’s Football tournament, the answer is not quite that much.
Bernstein says that growth in South African beer consumption is likely to be lower than that 180bps average for a couple of reasons. Firstly, the African nation is further away than more recent Cups, which means fewer foreign tourists will attend. And secondly, the competition is being held in the depths of the country’s winter, when demand for a cool lager is likely to be lower.
All in all then, Bernstein expects SA to post 2.6 per cent beer volume growth in 2010 — or a World Cup boost of 60bps. That’s still higher than some other expectations, however. South Africa’s own SAB Miller, for instance, is forecasting a 40bps-bump.
And finally, as a bonus, Bernstein has gone where other financial analysts have yet to tread, and taken a stab at predicting the actual winner of the competition. Here’s the methodology:
FIFA statistics are poor predictors of likely Cup winners, but bookies seem to have the better odds. Number 1-ranked squads in FIFA rankings and the previous year’s ‘World Player of the Year’ have all failed to lift the ensuing Cup, but no lowly-ranked side has ever won it either. FIFA statistics show that home advantage is an important factor that could benefit the South African team. However, betting odds favourites tend to win more often and advance further in tournaments. South Africa’s current 81st position in FIFA rankings and 24th position in World Cup betting odds are likely to trump home court advantage and limit the hosts’ participation in the tournament to the minimum three matches of the Group Stage.
And using those odds, Bernstein concludes:
If betting odds are to be trusted this time, the final of the 2010 FIFA World Cup will be played by Spain and Brazil (Exhibit 16). South Africa is currently expected to finish 24th in the tournament, which implies the host squad is likely to fall in the 1st round group stage (see attachment Exhibit 19 for odds on all 32 nations).
Bring on the beer!
Whoops, we mean Cup!
Related links:
South Africa braces for World Cup beer battle – CNN Business 360
