On March 18, China Resources Beer released its 2024 annual results. Against a backdrop of industry downturn and intensifying competition, the report drew significant industry attention due to the company's pivotal market position and strong performance.

The results showed that China Resources Beer achieved revenue of RMB 38.635 billion in 2024, with gross margin climbing to 42.6%—the highest in five years—and EBITDA reaching RMB 8.694 billion.

Under the dual pressures of stock competition in the beer industry and deep adjustment in the baijiu sector, China Resources Beer, with its premiumization strategy at the core, achieved high-quality operations through the 'beer-baijiu dual empowerment' model. Following the results release on March 18 and 19, China Resources Beer's share price rose sharply, with a cumulative two-day gain of 10.43%.

Thirty Years of Entrepreneurship China Resources Beer: From Scale Expansion to Value Leap

2024 marked the 30th anniversary of China Resources Beer. Its 30-year development history is a story of transformation that has resonated with China's economic growth.

After acquiring Shenyang Brewery in 1993, China Resources Beer rapidly completed its national layout through the 'Mushroom Strategy' and 'Along the River and Coast Strategy.' In 2013, it became the world's largest single-brand seller by volume, with sales exceeding 20 million kiloliters.

However, China Resources Beer did not stop at scale expansion. In 2017, it launched the '3+3+3' premiumization strategy. As the 2024 results show, China Resources Beer's profit levels have surpassed its main competitors, completing the transformation from 'scale king' to 'profit king' in eight years.

Premiumization Breakthrough: In 2024, sales of premium and above beer grew 9% year-on-year, with the Heineken brand achieving nearly 20% growth on a high base, and the 'Li' series of high-end products growing 35% in sales volume.

At the same time, the proportion of sales from mid-range and above products exceeded 50% for the first time, marking a major success in the company's overall strategic upgrade.

Capacity Optimization: While closing inefficient plants, new smart factories in Jinan and Xiamen have been put into operation. The 62 factories now have an annual capacity of 18.7 million kiloliters, significantly improving smart manufacturing efficiency.

  • Digital and Intelligent Transformation: In 2024, online GMV grew 30% year-on-year, and costs were significantly reduced through QR code traceability and digital supply chain management.
  • Financial Performance: Gross margin rose from 33.7% in 2016 to 42.6% in 2024, a five-year high; net operating cash flow reached RMB 6.928 billion, a sharp 67% increase year-on-year, indicating significantly enhanced earnings quality. Additionally, China Resources Beer's ESG rating was upgraded to MSCI A, and six factories were recognized as national 'green factories,' fully demonstrating the power of high-quality operations in the new world of the alcoholic beverage industry.

Overall, China Resources Beer's 2024 operating results fully demonstrate that its '3+3+3' premiumization strategy has been successfully achieved one year ahead of schedule.

Beer Business: Premiumization Momentum Released, Structural Advantages Highlighted

Against the backdrop of a plateau in total beer industry volume (according to China Alcoholic Drinks Association data, China's beer production fell 5.2% year-on-year in 2024), China Resources Beer, with the strategic conviction that 'premiumization is not an option but a must-answer question,' has restructured its value chain and opened new growth space.

In recent years, China Resources Beer has continuously intensified its efforts in premium products, achieving notable premiumization results.

  • Product Matrix Innovation: Leveraging international brands such as Heineken and Sol, it has formed a 'Chinese brands + international brands' portfolio with 'top-tier heritage, mid-tier innovation, and bottom-tier quality,' covering the full price range from mass to super-premium.
  • National Trend Culture Empowerment: Launched the super-premium product 'Nongli,' centered on 'Chinese barley, Chinese brewing,' reshaping the image of domestic premium beer; 'Brave the World SuperX' was refreshed and upgraded, with film and TV placements in 'South to North' strengthening young consumer awareness, reaching over 200 million consumers (source: Tencent Ads '2024 New Brand Marketing Insights').
  • Scenario-Based Innovation: Launched Heineken Rose Red fruit beer for female consumers and Red爵 Light Beer for outdoor enthusiasts, significantly increasing penetration in niche markets.
  • Channel and Marketing Innovation: Achieved omni-channel breakthroughs in 2024, with online business GMV growing 30% year-on-year and leading market share in instant retail channels.
  • IP Co-Branding Marketing: Partnered with F1 China Grand Prix, UEFA Champions League, and other events to launch themed campaigns such as 'New Year with Star Joy' and 'Heineken Star Electronic Music,' reaching over 200 million young consumers.

According to industry data estimates, over the past eight years, China Resources Beer's market share in premium beer has risen from around 11% in 2017 to approximately 23% in 2024, making it one of the leaders in China's premium beer market.

Baijiu Business: 'Zhaiyao' Brand Builds Benchmark for Sauce-Flavor Baijiu Value

In 2024, against the backdrop of high inventory and declining sales in the baijiu industry, Jinsha Wine, a subsidiary of China Resources Beer, achieved counter-trend growth of 4% with 'Zhaiyao' as its core, posting impressive results of RMB 2.149 billion in revenue and a 68.5% gross margin, becoming a model of counter-cyclical growth during the industry's adjustment period.

In its baijiu business, China Resources Beer successfully implemented the following key initiatives in 2024:

  • Channel Synergy: Under the 'beer-baijiu dual empowerment' strategy, leveraging China Resources Beer's nationwide advantage channel network, Jinsha Wine rapidly penetrated terminals, with the number of distributors growing significantly by 40% in 2024, laying a solid foundation for medium- and long-term rapid development.
  • Product Focus: Implemented a 'big single product matrix' strategy, cutting non-core product lines and focusing on the dual brands 'Zhaiyao' and 'Jinsha Huisha.' The high-end big single product 'Zhaiyao' saw sales volume increase 35% year-on-year, contributing over 70% of baijiu business revenue, successfully positioning in the sub-premium price band.
  • Cultural Empowerment: China Resources Beer launched the brand positioning 'Strive Upstream, Drink Zhaiyao,' sponsored major events such as the 'CEO Book Club' and the 'Beijing International Film Festival,' and held the 'Jinsha Red' sorghum festival, enhancing brand influence across multiple dimensions.
  • Customer Empowerment: China Resources Beer established a tiered management platform for major baijiu customers called 'Sanrunhui,' supporting and empowering major distributors to strengthen, building a community of shared interests between the manufacturer and distributors.

Anchoring the Strategic Blueprint of 'World-Class Alcoholic Beverage Enterprise'

Raising a glass for thirty years, stepping into the new world. 2024 marks the 30th anniversary of China Resources Beer. Having traversed the era of incremental growth and stock competition, China Resources Beer has grown into a leading enterprise in China's beer industry.

China Resources Beer stated that in the face of consumption volatility, it will continue to implement the 'Win in Premium, Excel in Development' strategy, expand new opportunities, new businesses, and new growth, respond agilely to new consumption trends, and meet new consumer demands.

At the same time, building on the 'tighten the belt' approach, it will further promote the 'simplification, lean, and refinement' strategy, implementing digital intelligence, technology, innovation, green and low-carbon initiatives to enhance its competitive position, lead industry development, and become a pioneer in the era of shrinking and fluctuating volumes in the new world of the alcoholic beverage industry.

At the results presentation on March 18, China Resources Beer's Board Chairman Hou Xiaohai said: "Challenges and opportunities coexist. China Resources Beer remains confident in the long-term development of China's alcoholic beverage market."

"With steady economic growth, a low sales base in the coming months, and the firm implementation of the 'three refinements' in cost and expense management, China Resources Beer is more confident in achieving revenue growth and faster profit recovery in its beer business in 2025, maintaining a cautiously optimistic outlook overall."

"In the baijiu business, as the industry enters an adjustment period, China Resources Beer will deepen the 'beer-baijiu dual empowerment' , establish unique competitive capabilities, innovate brand products and upgrade sales models, build a community of shared interests between manufacturer and distributors, strengthen technological capabilities, achieve rapid growth of core single products, consolidate and expand bottom-tier products, drive revenue and profit growth, and lay a solid foundation for being an 'explorer of the new world of baijiu.'"

"At the same time, China Resources Beer will 'pack its bags and set off again,' adhere to long-termism, pursue high-quality development, and actively build agile response capabilities to cope with the consumption 'new world,' creating a new world of the alcoholic beverage industry that is digital, technological, innovative, lean, diversified, globalized, and ecological, becoming the 'leader of the new world of the alcoholic beverage industry,' and helping China Resources Beer move toward the vision of 'becoming a world-class alcoholic beverage enterprise.'"

China Resources Beer's 30 years is a journey interwoven with 'disruptive innovation' and 'strategic determination.' From M&A integration to premiumization breakthrough, from single beer to the 'beer-baijiu dual-wheel drive,' its success lies not only in keen insight into market trends but also in the strong execution capability to translate strategy into action.

In the volatile Chinese alcoholic beverage industry, China Resources Beer, with its sustained and steady development, is becoming a model of long-termism for Chinese enterprises navigating cycles.