来源 | 伯虎财经（bohuFN）
Author | Spirit
"During the years of change, I often had insomnia and was very stressed. Recalling the years of China Resources Beer's transformation to high-end, Hou Xiaohai, chairman of the board of directors of China Resources Beer, recalled.
It is gratifying that the report card handed over by China Resources Beer shows that this transformation has been successful. It's just that the beer track has a long way to go, the transformation of the past has been revealed, and new challenges are coming.
01 China Resources Beer, leading in revenue growth
On March 18, China Resources Beer disclosed its 2023 results, with a consolidated turnover of 38.932 billion yuan, a year-on-year increase of 10.4%, and a profit attributable to shareholders of the company of 5.153 billion yuan, an increase of 18.6% year-on-year.
Among the Hong Kong beer stocks, China Resources Beer, which ranks second in terms of revenue, is moving forward with double-digit growth, ahead of Budweiser APAC (5.84%), Tsingtao Brewery (5.49%), and Hong Kong San Miguel (8.88%).
In 2023, CR Beer's beer business performed steadily, with annual sales reaching 11.151 million kiloliters, up 0.5% year-on-year, the beer business segment achieving a turnover of approximately RMB36.865 billion, a year-on-year increase of 4.5%, and earnings before interest and tax of RMB6.889 billion, up 30.6% year-on-year.
Among them, the performance of high-end beer is even more impressive. CR Beer emphasized in its annual report that the company continued to promote the implementation of the "Winning High-end" strategy, and continued to cultivate and promote key high-end brands through various themed promotions and channel marketing activities.
Specifically, in 2023, China Resources Beer will launch high-end products such as snowflake whole wheat pure raw, non-alcoholic beer "Heineken 0.0", and Chinese grain as raw material "Qin Shi Huang CPA". In addition, China Resources Beer also launched a strong beer priced at up to 1,199 yuan, "Lili", to enter the ultra-high-end market.
In terms of results, the sales volume of sub-premium and above beers of China Resources Beer increased significantly to 2.5 million kiloliters, an increase of 18.9% year-on-year, and the gross profit per kiloliter increased by 8.6% year-on-year. Among them, the sales of products including Heineken, Xuehua Chunsheng, Lao Xue and Hongjue all achieved double-digit growth year-on-year.
According to the financial report, the proportion of sub-high-end and above beer sales of China Resources Beer is increasing year by year, from 13.2% in 2020 to 22.4% in 2023.
It is not difficult to see that high-end has significantly promoted the performance development of China Resources Beer.
02 The high-end journey of China Resources Beer
In fact, the development of premiumization is an issue that all brands in the beer industry cannot bypass.
In 2013, after the output of the mainland beer industry peaked, it began to turn downward. Euromonitor data shows that the total production and sales volume of beer in mainland China have shown a significant growth trend since 2005, and peaked in 2013, with total production and sales exceeding 50 million kiloliters, and then entering a decline range, falling to 34.11 million kiloliters in 2020.
Hou Xiaohai realized that the situation was not right when the development of China Resources Snow Beer encountered a bottleneck. "Snow Beer has been growing rapidly for more than 20 years and reached its peak in 2010. After that, by 2013, the development of Snow Beer began to flatten out, which is an important signal. ”
At that time, there was another anomaly that caught Hou Xiaohai's attention - AB InBev's growth was very fast. In the Chinese market, AB InBev has been inferior to Xuehua and Qingdao in the past, why is there such a rapid growth now? Hou Xiaohai analyzed: "First, AB InBev has a good brand, and the growth rate of the brand is far faster than ours; second, a good brand has driven other mid-range brands, so that other brands can also achieve national development. Clearly, what AB InBev is doing is in line with industry trends. ”
The development and changes have made China Resources Beer realize the importance of high-end beer. Since then, China Resources Beer has begun to do subtraction and addition at the same time. In terms of subtraction, CR Beer reduced more than 90 factories to more than 70 and optimized personnel. In addition, China Resources Beer and Heineken have joined forces to develop high-end brands.
The high-end results of China Resources Beer are obvious. At present, in the price band of 10-15 yuan, Budweiser APAC is still firmly in the first place. However, Hua Chuang Securities pointed out that China Resources Heineken has made up for the shortcomings of the brand and cooperated with its own channel and resource advantages to achieve rapid volume, which has also driven the growth of pure life into stores to accelerate, and the current potential energy is the strongest, which is expected to surpass Budweiser.
Lin Wenjia, an analyst at SPDB International, pointed out that beer production in November and December 2023 recorded double-digit declines for three consecutive months compared with the same period in 2019. It is worried that the original trend of consumption upgrading in the beer industry will further evolve into consumption classification, that is, only a small number of high-end consumers are still pursuing higher-end and high-quality beer products, while most mass consumers pay more attention to the cost performance of beer products.
However, China Resources Beer's financial report shows an optimistic trend, that is, high-end products sell better than mid-to-low-end products. According to statistics, in the second half of 2023, the sales volume of China Resources Beer's sub-high-end and above products increased by 10% year-on-year, while the sales of low-end products accelerated to decline, down 8% year-on-year.
Hou Xiaohai also mentioned that "although the economic situation in 2023 is not optimistic, we have not observed a significant impact on the beer market. Even after the end of the pandemic, there are concerns about the trend of consumption downgrade, but in fact it is not clearly reflected in the beer industry. Although the consumer group is affected by the change in the scene, few people have switched from high-end beer to lower-end products. ”
03 Enter Baijiu and explore new directions
In 2023, China Resources Beer will officially consolidate the acquired Jinsha Liquor. Whether liquor can become a new growth pole for China Resources Beer has also been closely watched by the outside world.
In 2023, Jinsha Liquor contributed revenue of RMB2.067 billion and profit before interest and tax of RMB130 million to China Resources Beer. Wei Qiang, vice president of China Resources Beer and general manager of China Resources Wine, said that in the first two months of 2024, Jinsha Liquor increased by 50% year-on-year, the sub-high-end product "Abstract Treasures" increased by 16% year-on-year, and the corkage rate increased by 10 percentage points to 24%.
It is worth noting that high inventory and price inversion are the two major problems currently existing in Jinsha Liquor. Wei Qiang said, "China Resources faced great challenges after taking over Sands last year, one is the high inventory caused by the original management team's blind pressure and product pushing, and the other is that the price is seriously inverted, with the lowest price being about 400 yuan. ”
The industry believes that in order to improve the existing problems of Jinsha Liquor, it is necessary for China Resources Beer to continuously empower Jinsha Liquor and enhance the brand power and channel power of its products in the terminal market.
However, the market competition environment faced by Jinsha Wine is not "friendly". Xiao Zhuqing, a wine marketing expert, believes that when Jinsha Liquor started, it competed with small workshops and OEM liquor in Moutai Town, and achieved good investment performance in the national staking area. At present, Jinsha Liquor is competing with Moutai Group, Xijiu, Langjiu, Zhenjiu and Guotai and other leading giant enterprises to grab channels and terminals to grab people's hearts, and it will be more and more difficult for Jinsha Liquor in the future.
In Hou Xiaohai's view, opening a diversified layout and entering the liquor industry is a self-innovation of China Resources to break through its own boundaries.
"CR Beer's entry into the liquor industry is based on a mission. The beer industry is highly market-oriented and has a higher market concentration, while the liquor industry is relatively less concentrated and more traditional. We hope to graft some of the successful experience of CR Beer in the past and the market competitiveness it has exercised, so that beer and liquor can have more chemical reactions, and explore more possibilities of 'beer and white fusion'." ”
Following the high-end, it is worth continuing to observe whether baijiu can become a new springboard for China Resources Beer.
Resources:
1. Zhitong Finance and Economics: The financial report view of the beer industry: high-end continues to "fight", but it sits on the "cold bench" in the capital market
2. Wall Street news: Financial report 2024|Sales of high-end liquor increased by 60%, and China Resources Beer said that it did not see the impact of consumption downgrade
3. China Entrepreneur Magazine: Hou Xiaohai of China Resources Beer and Geng Chao of Yanjing Beer talked about the pain of enterprise change
4. Xinhuanet: Dialogue with Hou Xiaohai of China Resources Beer: "Beer and White Fusion" has not been done before, let's do it
5. Beijing Business Daily: How to play a good sauce and wine chess with China Resources Liquor for 2 billion yuan for 10 billion acquisitions
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