Beer giant Budweiser saw a decline in performance in the Asia-Pacific region.
On the morning of August 1, Budweiser APAC released its unaudited 2024 semi-annual results, which showed that the revenue in the first half of the year was US$3.399 billion, and the profit attributable to equity holders (net profit attributable to the parent company) was 541 million yuan, down 4.3% and 5.2% year-on-year respectively. The reporter of the new consumption index research group of this newspaper also learned that in the first half of this year, Budweiser Asia Pacific was 4.6573 million kiloliters, a year-on-year decrease of 6.2%.
The reporter noted that this is also the second decline in sales, revenue and sales volume of Budweiser APAC after the first half of 2020, and the performance data is lower than expected. In response to the opening of Hong Kong stocks, Budweiser APAC once fell nearly 7% to HK$8.81 per share, and then the decline narrowed, closing at HK$9.39 per share, down 1.26%.
When the reporter combed through the relevant data, it was noted that in the first quarter of this year, Budweiser APAC's sales, revenue and net profit had begun to decline year-on-year, with year-on-year decreases of 4.8%, 3.47% and 3.37% respectively. The downward trend was even more pronounced in the second quarter, with sales and revenue falling by 7.3% and 7.8% year-on-year respectively in the second quarter, according to the semi-annual report.
In the earnings report, Budweiser APAC believes that the reason for the decline in performance data is related to the slowdown in the growth of the Chinese market in the second quarter, and the weather is an important factor.
Budweiser APAC said in its financial report that in the second quarter of this year, due to the impact of heavy rain in China's main business markets and the high base of performance in the same period last year, the single-quarter sales volume in the Chinese market fell by 10.3%, revenue decreased by 15.2%, and revenue per hectoliter decreased by 5.4%.
In response to the situation, Yang Ke, CEO and co-chairman of Budweiser APAC, believes that the market performance in the second quarter of this year is a special case, and Guangdong, Fujian, Zhejiang and other places have been affected by continuous rainfall and typhoons since the beginning of this year, which have had a negative impact on the business.
The reporter noted that although there are still uncertainties in the weather in other parts of the country in July compared with the successive heavy rains in the second quarter, as a peak season for beer consumption within a year, the industry has maintained some confidence. Yang Ke said that he remains optimistic about the follow-up market performance, and "Budweiser APAC's related strategies, channel strategies, and sports marketing are still advancing as planned."
According to the reporter's previous interview, the continuous rainstorm weather has a direct impact on the sales of beer, and some food stalls, open-air night markets and barbecue stalls with large beer consumption have directly reduced the table turnover rate and stall rate due to rainy days, which has also caused beer sales to decline.
However, compared with Budweiser APAC's performance decline in the Chinese market "due to extreme weather", some domestic beer listed companies that have disclosed their results in advance have "performed well" in the same period.
Yen Ching Restaurant expects to achieve a net profit attributable to shareholders of listed companies of 719 million yuan to 797 million yuan in the first half of the year, a year-on-year increase of 40% to 55%; Pearl River Beer, which is also in Guangdong, a key area of Budweiser's business, is expected to have a net profit attributable to shareholders of listed companies of 476 million yuan to 531 million yuan in the first half of the year, a year-on-year increase of 30% to 45%.
It is understood that the decline in Budweiser APAC's performance in the first half of the year has caused discussion in the industry, and some industry insiders believe that the company's performance decline is more due to channel problems. Beer marketing expert Fang Gang speculated that the "three axes" of Budweiser's performance growth: night clubs, KA (i.e., large supermarkets, etc.) and catering may encounter new problems.
The reporter noticed that night clubs and catering were the main channels for Budweiser to "exert force", but a beer industry practitioner said that at present, the price of the two major domestic channels is particularly strong between the giants, and Budweiser's market share has also been greatly affected, "More importantly, now some night clubs will go to OEM by themselves, and the price (including production and retail prices) of beer under its own brand is cheaper than that of giant products such as Budweiser."
Of course, the growth of Budweiser has been hindered, which has also attracted attention from all walks of life in the high-end process of domestic beer. Fang Gang said that there are still some new changes in the domestic beer market, and the specific impact remains to be seen.
According to the reporter's understanding, as the earliest foreign brand in China to lay out high-end/ultra-high-end beer, Budweiser has opened the domestic market through a high-end product structure, and this product structure has also made domestic beer giants compete to learn and imitate, from 2017, including Tsingtao Beer, China Resources Beer and other enterprises to take price increase measures, the "beer high-end" process officially accelerated.
In the first half of this year, the cumulative beer output of enterprises above designated size in China was 19.088 million kiloliters, a year-on-year increase of 0.1%, but since March, beer production has continued to decline, a year-on-year decrease of 6.5%, 9.1% and 4.5% respectively, and the beer output of enterprises above designated size in June was 4.11 million kiloliters, a year-on-year decrease of 1.7%. In addition to the impact of weather, consumption in terminal channels may also be the main influencing factor.
However, the industry remains optimistic about the process of high-end beer, and at the beer T5 summit held by the China Alcoholic Beverages Association, all walks of life believe that the trend of high-end beer in China remains unchanged.
Compared with other developed countries in the world, China's high-end beer accounts for only 17% of the total market, while the proportion of North American and European markets is as high as 40%, so Budweiser APAC will continue to focus on the layout and investment of high-end strategy.
According to the reporter's understanding, in fact, the performance of Yen Ching Restaurant and Pearl River Beer announced a large increase in net profit, and the main factor is the further deepening of the high-end structure of products. Industry insiders believe that with the continuous optimization of China's product structure, in the future, it is expected that the proportion of high-end products will increase, and the product structure will be spindle-shaped, that is, mid-range beer is the main component, small at both ends and large in the middle, and the mid-to-high-end expansion is still sufficient.
So, has the declining sales in Budweiser APAC in China been transformed into an increase for other beer companies? How did beer giants such as China Resources Beer, Tsingtao Brewery and Carlsberg perform in the first half of the year? The reporter of the new consumption index research group of this newspaper will continue to pay attention.
Source: Southern Metropolis Daily