Australia has become a leading source of revenue for Asahi following its acquisition of Carlton and United Breweries. It achieved a mid-single digit increase in total alcohol sales in the first three months of 2021, and is looking to continue its acquisition spree following the purchase of Allpress Espresso in April.
Asahi’s Australian business is projected to generate annual revenues of close to $4.2 billion in 2021. Q1 saw sales volumes increase +175.1% YoY in Oceania, mainly due to core brands and the consolidation of CUB business. Asahi said it aimed to “overachieve the H1 forecast by covering the gap mainly in Australia and soft drinks businesses.”
The overall Australian beer market in the three months to March 31 was down by around 2.1% compared to the same three months in 2020, while packaged beer was 2.% lower.
In the Asahi beer category, sales volume in the Australian off-premise channel increased in the mid-single digits YoY due to strong sales of core brands Great Northern and Asahi Super Dry.
Meanwhile, in the on-premise channel, sales volume decreased in the high single digits YoY, mainly due to continued restrictions on the number of customers in restaurants despite the gradual deregulation. On-tap beer sales across the industry dropped by 30% during 2020 because of lockdowns and restrictions. However, the on-premise recovered by the end of Q1 due to deregulation in each state except Victoria.
Chief executive for Asahi Beverages Oceania region Robert Iervasi (above) told The Australian that consumers were more focused on classic beer brands that had an emotional connection, with Victoria Bitter growing faster than the mainstream beer category and Great Northern beer holding its position as the largest selling beer in Australia by value.
“The position we are in at the moment as we emerge out of the COVID pandemic, which is really encouraging, is that we are on track to deliver strong sales and profit growth across Oceania in 2020,” he said. “And there has been no pausing from a material investment perspective.
“We make up one of three regions for Asahi globally – there is Japan, Europe and Oceania – and we are considered one of the growth engines for the global organisation which is really pleasing from our perspective because that enables and encourages investment in the local market which we are really pleased about.”
Among Asahi’s major acquisitions to date have been the Schweppes soft drinks business in 2009 for $1.2billion and Carlton United Breweries in 2019 for $16billion. Other deals have included craft beer brands Cricketers Arms, Mountain Goat and 4 Pines.
“We have a very ambitious agenda,” Iervasi said. “Where we see there is a link to our strategy and where it makes sense for us to continue to invest and grow we will do so.
“We continue to explore where there are gaps in our portfolio and where we see gaps we will explore how we will fill that. That may be via an acquisition or could be by a partnership such as we have with PepsiCo … or through product innovation and there are a number of opportunities to close any portfolio gaps that we might need to address.”
However, craft beer brands are off the table in the short term.
“At this point in time we’re looking to grow our craft brands that we currently have in our portfolio,” Iervasi added to The Australian Financial Review.
Zero-alcohol beer sales boom for Asahi
Iervasi also told the AFR that the zero alcohol beer segment is growing faster than any other category and outstripping the 8-9% growth of craft beer.
He said the zero alcohol beer category is forecast to grow at above 30% annually from a low base, driven by the increasing focus on health and wellbeing by consumers.
The company has a 35% share of the non-alcoholic beer category in Australia, with brands Carlton Zero and Great Northern Zero being described as important growth drivers for the overall Asahi business in Australia. Great Northern Zero went national earlier this month, after already gaining 12% of the zero alcohol market nationally in the first quarter after a strong debut in Queensland and the Northern Territory.