The peak season is coming



Entering the middle of May, beer will usher in the peak season of sales, and the consumer market will gradually enter a good situation. Recently, a reporter from Beijing business daily visited the offline market to investigate the high-end beer market in Beijing. Through the interview, we found that the high-end trend of beer market has appeared, and the market channels also cater to the high-end trend to cooperate with sales.

Recently, beer enterprises have successively released the annual report of 2020 and the first quarter report of 2021. According to the report, China Resources beer, Tsingtao beer and other beer enterprises will all make efforts in the high-end market in 2020, while the sales proportion and revenue of high-end products will increase significantly. Yuan Yue, Secretary General of the beer branch of China Liquor Industry Association, believes that high-end is not only the rise of prices, but also the rise of high-end products is an important embodiment of the high-quality development of the beer industry. The high-end products should have high-quality and extreme product expression, and meet some personalized needs. The high-end development of beer industry still has a long way to go.

Sales go up

Summer is coming, beer will also enter the peak consumption season. This year, beer sales are showing a high-end “popular” trend, no matter in the supermarket channel or the e-commerce platform.

A reporter from Beijing Business Daily found that Beijing Carrefour Shuangjing store launched a “Wine Festival” in May. In the beer area, Carrefour’s display is designed in the shape of a beer house, which is placed separately according to ordinary beer, craft beer, fruit wine and sparkling wine. A person in charge of the drinking area explained that the arrangement of beer is to meet the diversified needs of consumers. In addition, some imported high-end beer products have been introduced into supermarkets this year to adapt to the trend of high-end beer.

According to the white paper on online consumption of 2021 liquor released by Jingdong supermarket in April, in terms of beer sales, the market of black beer and raw milk has increased significantly, and consumers tend to “taste wine in depth”. In addition, female users and generation Z users have become new growth points in the liquor market. Another set of data shows that during the “double 11” period of Jingdong supermarket in 2020, the turnover of craft beer on the “double 11” day increased 20 times year on year.

In addition to the market performance, from the annual report of 2020 and the first quarter report of 2021, we can also find a good trend of high-end sales of beer. A reporter from Beijing business daily sorted out the above financial reports and found that in the first quarter of 2021, Chongqing beer achieved an operating revenue of 1.108 billion yuan from high-end products, with a year-on-year growth of 98.91%; Budweiser’s revenue of fine brewing products doubled in the first quarter of 2021; In the first quarter of 2021, the proportion of high-end beer sales increased by more than 3%, of which the sales of high-end fine brewing increased by 34% year on year; In 2020, the sales volume of sub high-end and above products of China Resources beer increased by 11.1% year on year.

In addition, a number of beer companies in the annual report focused on the high-end aspects of power. It is understood that last year, Tsingtao beer, China Resources beer and other liquor companies launched high-end and super high-end products to the market, and formed a high-end product matrix. In March and April, Zhujiang Beer accepted the investor survey and disclosed that it will continue to upgrade its products this year, and the high-end products are still continuing.

Seeking profit growth point

There are various reasons behind the “high vision” of wine enterprises, including the background of consumption upgrading, diversified consumer demand, etc. but for beer enterprises, when the sales volume reaches the ceiling, seeking new profit growth points has become an important reason for high-end.

Jahnke, chief executive of Budweiser Asia Pacific, said in a performance meeting held by analysts for the day, that Budweiser’s exclusive distribution agreement with Chinese mainland Red Bull, dragon, cinnamon whisky and other high-end spirits signed from Austria will come into effect next month. The two categories have greater profit margins and will help push the high-end transformation.

Fang Gang, an expert in beer marketing, said that since 2011, the beer industry has experienced a decline in volume, a rise in price, and a rise in profits, which has gradually become a normalization. Because the scale of beer production has been capped, the growth of product quality and sales profit has become the goal of the industry. In addition, the wave of consumption upgrading has also led to wine companies continue to seek profit growth.

Under the situation of volume decline and price rise, high-end has become an important starting point for liquor enterprises to pursue profit growth. After the release of financial reports by beer enterprises, many institutions also regarded the high-end beer as an important basis for optimistic performance growth in research and analysis, and said that with the change of product matrix in the beer industry, high-end beer brands may continue to benefit. CITIC Securities pointed out in the research report that in the medium and long term, all beer enterprises have further clarified the tactics under the high-end mode, and are optimistic about the accelerated realization of leading profit improvement under the high-end mode.

High end is more than price increase

Just after the May Day holiday, Yang Ke said at the performance meeting held by Budweiser to analysts that the prices of its Budweiser and other brands have increased, and the specific increases of different brands are different. It is worth noting that Budweiser Asia Pacific prospectus shows that in the Chinese market, Budweiser is a high-end brand.

This is the first company in the beer market to raise its price officially this year. However, in the view of some people in the industry, Budweiser will not be the only one to raise its price. The proportion of high-end products and the price increase are the strong support for the performance. With the release of pressure on earnings flexibility in the second quarter, leading companies may consider raising prices.

The transformation of high-end beer enterprises is very noisy, but what is intriguing is, does the so-called “high-end” mean only occupying the price highland?

Fang Gang said that the high-end of beer is not only the price rise, but also three main actions. Price increase is only one aspect, but also need to optimize production capacity, reduce costs and adjust product structure. Price increase is not a continuous action. For wine companies, every price increase has a window period of three to five years. The optimization of production capacity is also a phased work, not all production capacity need to be optimized. However, the adjustment of product structure is a continuous action. In the next three to five years, the focus of the industry will shift to the adjustment of product structure, and the profit level will double.

January believes that the development of high-end beer industry is a long-term process, rather than a short-term industry goal. Especially at the moment when the per capita consumption is not on the rise, in addition to channel upgrading, it should be extended to the cultivation of consumers and brands. It is necessary to establish contact with consumers and consolidate the loyalty and identity of consumer groups.

“The cost of this process is very high, but it is worth paying and exploring by the industry and enterprises.” January said.

Beijing Business Daily reporter Zhao Dan

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