Asahi Group says it expects its profits in Oceania to grow 32% in 2021, due to sales increases in core brands, innovations in low and no-alcohol beer and its CUB business.
While the company’s overall revenues declined by 3% in 2020 to $24billion, revenue for Oceania was up 92% to $4.2 billion, driven by the acquisition of CUB and growth in RTDs and carbonated drinks.
Its results presentation last week revealed CUB sales grew 7% in the June to December period, as the on premise recovered from pandemic restrictions.
In 2021, Asahi said it is targeting 13% revenue growth and 30% core operating profit growth “driven by recovery of existing businesses” and the consolidation of the CUB business.
“[We will be] expanding our presence, especially in the super-premium market through accelerating the growth of Super Dry and Peroni by expanding sales channels,” the brewer noted when discussing its plans for Australia. “Creating new growth opportunities, such as expanding sales channels for alcoholic beverages and soft drinks other than beer.
Asahi said it will make lower-alcohol beer a priority in 2021, as it focuses on eliminating harmful drinking and generating new drinking opportunities.
“By launching non-alcohol beers from core brands such as Great Northern and Carlton, [we are] aiming for a sales volume ratio of 25% for products with an ABV of 3.5% or lower by 2025,” the brewer said.
More than 1 million cartons of Carlton Zero have been produced since it was launched in Australia. The no-alcohol beer segment in Australia has more than doubled in sales – albeit from a low base – at Dan Murphy’s and BWS in the past year.
Billy Ryan, category manager for Craft Beer at Endeavour Drinks, told the Australian Financial Review there had been a spike in sales December and January, as people opted for other alternatives at more subdued celebrations over the festive season and New Year’s Eve.
“More people were looking to start the year on the right foot,” Ryan said.
Australia’s first billion dollar drinks brand
Great Northern became Australia’s first billion dollar alcohol brand last year. IRI Market Edge data shows sales of the CUB-owned beer are up nearly $150million in the past year, exceeding $1 billion for the first time (MAT to 6/09/2010).
Asahi revealed last year that the success of Great Northern was one of the big reasons it decided to buy CUB.
Former executive chairman of Asahi Beverages Peter Margin told the Australian Financial Review he was impressed by CUB’s product innovation and marketing sizzle in elevating Great Northern to one of the biggest-selling beers in the country.
The booming sales of Great Northern, combined with regaining distribution of Corona from Lion, lifted CUB’s market share to 48.8%.
He said it gave Asahi confidence by showing there was life in the beer category.
“I’m not sure the rest of the market has woken up to what has happened,” Margin said.
Asahi Australia appoints new Chairman
Earlier this month, Asahi Beverages has announced that Roland van Bommel has been appointed as the new Chairman of Asahi Holdings Australia (AHA) Pty Ltd.
Van Bommel joined the AHA Board in 2013 and has been Acting Chairman of AHA since December 2020, following the retirement of Margin from the role. Margin decided it was the right time to retire as Chairman of AHA following the successful integration of Carlton & United Breweries (CUB) into the business in June this year.
Asahi described von Bommel as “one of Australia and New Zealand’s foremost beverage industry leaders, with significant international experience in senior executive roles”. He is a former CEO of William Grant & Sons and Maxxium Worldwide.
He becomes the new Chairman of AHA at what the company describes as a “very exciting time”, with Asahi Beverages now the leading beverages company in Australia and New Zealand.
“I’m honoured by the opportunity, and energised by the challenge, of leading the AHA Board and ensuring we continue to achieve our ambitious growth targets and provide great jobs for our people,” van Bommel said.
“Under the leadership of Group CEO Robert Iervasi and his Executive Leadership Team we’re in a very strong position.
“The breadth of the Asahi Beverages business, manufacturing footprint and beverages portfolio gives us a great opportunity to deliver extraordinary results for our people, our partners, our customers, consumers and community.”
Asahi Beverages Group CEO Robert Iervasi added: “Roland’s deep understanding of our business and the broader beverages industry will ensure that we are positioned well to meet the challenges of the future.”