21st Century Business Herald reporter Wen Jing reports from Chongqing
Tsingtao Brewery (600600.SH) used a strong internal structural improvement to explain how the first year of high-end beer was born: last year, the sales of the two major brands Tsingtao and Laoshan rose and fell. Driven, Tsingtao Brewery’s revenue exceeded 30 billion yuan for the first time, an increase of 8.7% year-on-year, and the net profit attributable to the company’s shareholders increased by 43% year-on-year to 3.15 billion yuan.
At the end of last year, He Yong, secretary-general of the China Alcoholic Drinks Association and chairman of the Beer Branch, said at the annual supplier conference held by China Resources Beer that 2021 is the first year of high-end beer in China, and a good day for the beer industry to make money has come.
On March 28, Tsingtao Brewery announced its 2021 annual report, showing that the base camp Shandong market is the biggest beneficiary of structural improvement, and its net profit of 1.8 billion yuan also hit a new high, an increase of 40% year-on-year.
Under the epidemic, the sales volume of beer enterprises above designated size in my country (referring to the beer industry legal person enterprises with annual main business income of more than 20 million yuan) has not recovered to the industry level before the epidemic. The five beer giants still control the vast majority of the Chinese beer market. The respective base markets have been effectively consolidated.
After all, the base market is the best testing ground for new products and new projects.
Sales of the two major brands rose and fell
The cliff-like impact of the pandemic on beer sales is waning.
According to data from the National Bureau of Statistics, from January to February, China’s beer enterprises above designated size achieved a cumulative beer output of 5.309 million kiloliters, a year-on-year increase of 3.6%. However, in the same period in 2020, the first year of the epidemic, the output of beer enterprises above designated size in China was 3.159 million kiloliters, a year-on-year decrease of as much as 40%.
Data from various aspects in 2021 shows that the negative impact of the epidemic on the sales of the main beer brands is less obvious.
Comparing the annual report of Tsingtao Brewery, it can be found that the sales volume of the main brand Tsingtao Brewery will decrease by 4% year-on-year in 2020, but in 2021, the sales volume will increase by nearly 12% year-on-year to 4.33 million tons, and the revenue will be nearly 20 billion yuan, a year-on-year increase of about 14%. . Tsingtao Brewery will account for 51% of total sales in 2020 to 55% in 2021.
The annual report shows that among Tsingtao beer, the sales of high-end and above products are growing faster. In 2021, Tsingtao Brewery’s high-end products will achieve a total sales volume of 520,000 kiloliters, a year-on-year increase of 14%. In recent years, the company has launched new products such as Tsingtao Brewery’s “Legend of the World, Centennial Tour, Amber Lager, August, Fortune Dangtou, Classic 1903, Barrel Puree Beer, Pearson, Tsingtao Beer IPA”, especially this year The “Legend of the World” gift box launched, with a retail guide price of 1,099 yuan for a single 1.5-liter beer, has become China’s ultra-high-end beer.
In addition to rising sales of high-end products, declining sales of mass brands are the other side of the coin, thus collectively lifting the structure faster.
The annual report shows that in 2021, Laoshan, the second largest brand of Tsingtao Brewery, will undergo dramatic changes.
In 2020, the sales volume of Laoshan brand and Tsingtao Beer are almost equal, and the sales volume fell by only 1% year-on-year due to the impact of the epidemic. In this regard, the relevant person in charge of Tsingtao Brewery once explained to the 21st Century Business Herald reporter that in the year of the epidemic, the beer drinking market was most affected by the catering channel, and this is the classic main sales market of Tsingtao Beer. With the gradual easing of the epidemic in April and May 2020, roadside dining at food stalls was the first to resume, popular beer consumption recovered, and mid-to-high-end brands and high-end Tsingtao Brewery lag behind.
But in the post-epidemic era, the sales of Laoshan and Qingdao brands have changed in reverse.
In 2021, Laoshan’s sales volume will drop by more than 8% year-on-year to 3.6 million tons, and sales revenue will be less than 10 billion yuan, a year-on-year decrease of 2%. It is precisely because of the sharp decline in Laoshan brand sales that Tsingtao Brewery’s overall sales in 2021 will be 7.93 million kiloliters, a slight increase of 1.4% year-on-year, which is lower than the industry growth level of 5.6%.
“Consumer demand in the domestic beer market shows a trend of diversification, high-end and personalization. The proportion of high-end products represented by canned beer, craft beer and draft beer is continuously increasing, and maintains a good momentum of development.” Tsingtao Brewery analyzed , which coincides with He Yong’s view that the beer industry has “blessed in disguise” in the epidemic. “People pay more attention to health, and they want to drink something good.” He said, the market share of low-end products has naturally dropped.
Shandong market is more and more reliant
Tsingtao Brewery took the lead in placing the “experimental field” of the new factory in Shandong.
Whether it is a large factory with millions of tons or a craft beer garden project, Tsingtao Beer is placed in Shandong. In February 2021, the construction of the craft beer garden project in Jinshatan Beer City, West Coast New District, Qingdao started, with a total investment of about 250 million yuan. In January of this year, the installation and commissioning of the brewing equipment of the project was completed and the materials were fed. In February, the company’s board of directors held an extraordinary meeting to add an additional investment budget of nearly 60 million yuan to the project and increase the registered capital to Tsingtao Brewery (West Coast) Cultural Tourism Development Co., Ltd.
On March 26 this year, the board of directors of Tsingtao Brewery reviewed and approved a package of new expansion projects——
In the Blue Silicon Valley Economic Zone of Jimo City, Qingdao, Tsingtao Brewery plans to build an innovation base for beer brewing and beverage R&D, with a total investment of 380 million yuan, and establish a wholly-owned subsidiary, Tsingtao Brewery Technology R&D Center Co., Ltd. At present, the land planning, construction permit and other procedures have been completed and the land certificate has been obtained.
The feasibility report of the 1.2 million kiloliter expansion project of Tsingtao Brewery Smart Industrial Park was reviewed and approved. After completion, the new capacity will be 200,000 kiloliters/year, and the total investment of the project is 580 million yuan. Currently, the project is progressing as planned.
The feasibility report on the relocation and expansion of Shandong Lulansha Beer Co., Ltd. 400,000 kiloliters project was reviewed and approved. The total investment of the project is 440 million yuan. The project has been approved by the environmental impact assessment report, and the land formalities are pending.
It is a series of new reconstruction and expansion projects and new product blessings. The 2021 annual report shows that Shandong’s foreign transaction revenue will be 17.8 billion yuan, with a net profit of 1.8 billion yuan. Compared to 2020, last year’s revenue in the region increased by less than 8%, but net profit increased by 40%! In 2020, the net profit of Tsingtao Brewery’s base camp has declined compared with 2019. The annual report shows that in 2021, Tsingtao Brewery’s overall gross profit margin in Shandong will be 32%, a year-on-year increase of 1.64%.
In addition, in 2021, Tsingtao Brewery will achieve external transaction revenue of 5.37 billion yuan in North China and a net profit of 750 million yuan. It is the company’s second largest regional market, and its performance has increased year-on-year.
In the Southeast market, Tsingtao Brewery will turn losses in 2021.
However, in the South and East China markets, Tsingtao Brewery underperformed. In 2021, the company’s loss in East China will expand, from a loss of 30 million yuan in 2020 to a loss of 66 million yuan. In South China, Tsingtao Brewery has achieved revenue of 2.7 billion yuan without increasing profits, but its net profit is almost the same as that in 2020, hovering around 100 million yuan.
Today, Tsingtao Brewery has 58 wholly-owned and controlled beer production enterprises and 2 two associate and joint venture beer production enterprises in China, which are distributed in 20 provinces, municipalities directly under the Central Government and autonomous regions across the country. However, when the high-endization caused by the epidemic is coming ahead of schedule, overweight local and strong markets has become the primary strategy of beer giants. The penetration war in non-strong markets will be more costly and costly when the domestic economic growth slows down.
For more information, please download the 21 Finance APPReturn to Sohu, see more
Editor:
Disclaimer: The opinions of this article only represent the author himself, Sohu is an information publishing platform, and Sohu only provides information storage space services.