Source: Yunjiu Toutiao (ID: YJTT2016) The first quarter is the off-season for beer consumption, but Tsingtao Beer sold even better. The beer industry is no longer the one with continuous high growth, but the strong Tsingtao Beer is still that strong beer. On the evening of April 28, Tsingtao Beer released its first-quarter report. Data showed that during the reporting period, the company achieved operating revenue of 7.04 billion yuan, a year-on-year increase of 2.60%; net profit attributable to shareholders of the listed company was 579 million yuan, a year-on-year increase of 8.51%, both higher than the growth rates in the same period last year, maintaining a steady and improving business trend. As we all know, the first quarter is the off-season for beer consumption, but why did Tsingtao Beer sell better?
1 "Beer is not selling well," but Tsingtao Beer sells even better! In 2016, "beer and instant noodles are not selling well" - this change in the Chinese consumer market even attracted the attention of German media and ultimately reflected in industry development data. When the industry analyzed the reasons for "beer not selling well," an important reason was the decline in traditional beer sales due to consumption upgrades. According to data from the National Bureau of Statistics, in the first quarter of 2017, the beer industry produced 9.74 million kiloliters, a year-on-year decrease of 0.9%. Various signs indicate that in the first quarter, which was already the off-season, beer seemed to be selling even worse! In contrast, Tsingtao Beer completely "grew against the trend" during the same period: the first-quarter report showed that Tsingtao Beer's cumulative beer sales in the first quarter reached 2.01 million kiloliters, a year-on-year increase of 3%; among which, the main brand "Tsingtao Beer" sold 1.06 million kiloliters, and high-end products such as "August, Hongyun Dangtou, Classic 1903, and Pure Draft Beer" sold a total of 490,000 kiloliters. In addition to performance growth, Tsingtao Beer's advantage over its competitors in the industry was further deepened in the first quarter. Compared with Yanjing Beer, another of the five giants, Yanjing Beer's first-quarter operating revenue was 3.173 billion yuan, a year-on-year increase of 2.12%. Tsingtao Beer, with a volume twice that of the former, still won with a higher growth rate, laying the foundation for future competition and integration among industry giants.
2 Product + culture support Tsingtao Beer's "acceleration" Domestic beer faces two major tests: one is product upgrading, and the other is cultural enhancement. In these two aspects, Tsingtao Beer happens to be one step ahead. From the first-quarter data, the steady progress of mass-market Tsingtao Beer and high-end beer sales further demonstrates Tsingtao Beer's significant achievements in the above two areas. During the 2017 Spring Festival, it was impressive that Tsingtao Beer cooperated with KFC to sell personalized and creative customized "Hongyun Dangtou" Tsingtao Beer in KFC chain restaurants. This Tsingtao Beer, which had both appearance and temperament, attracted widespread market attention as soon as it was launched. In many KFC stores, it was "hard to get a bottle." In areas where the product was launched, Tsingtao Beer's market atmosphere improved significantly. Behind "beer + fried chicken" is a microcosm of Tsingtao Beer's consumer thinking, paying more attention to consumers' personalized needs. On the one hand, it makes the brand younger to adapt to young consumer groups; on the other hand, it is committed to promoting the development of personalized and high-end beer, adapting to the trend of beer quality and taste consumption upgrades. Cultural enhancement is an important step for domestic beer to develop upward. In this regard, Tsingtao Beer has already made arrangements, from the Tsingtao Beer Culture Festival to the Tsingtao Beer Museum, both having profound impacts. Just one day before the release of the first-quarter report, the Tsingtao Beer Culture Museum was officially awarded the title of "Qingdao Science Education Base." This base is a platform for beer knowledge popularization and cultural display built by leveraging beer culture resources. It will help local citizens and tourists deepen their understanding of beer culture, transforming from "drinking beer" to "enjoying beer," while having a profound impact on Tsingtao Beer's brand and cultural influence. Through product and cultural upgrades, "moving closer to consumers" has given Tsingtao Beer greater development momentum, and the development of "down-to-earth" Tsingtao Beer is increasingly showing an "accelerating" trend.
3 Future market brewing "surprises," brokers praise Tsingtao Beer There are more surprises in Tsingtao Beer's future development: the introduction of long-term incentive mechanisms, the arrival of the beer sales peak season, and the integration of imported beer. Tsingtao Beer's development is gradually improving. In the first-quarter report, Tsingtao Beer specifically responded to the progress of the long-term incentive mechanism, pointing out that Tsingtao Beer Group will, in accordance with relevant laws and regulations, promote the listed company to propose a management long-term incentive plan before the end of June 2020. After approval by relevant departments, it will be submitted to the company's shareholders' meeting for review and implementation. For any enterprise, management directly determines the company's performance. The introduction of a long-term incentive mechanism will greatly drive Tsingtao Beer's future growth momentum. On the same day the first-quarter report was released, the 9-day Second Hainan Danzhou Tsingtao Beer Culture Festival opened grandly. Through the setting of service areas such as stage area, interactive experience area, and sales area, Tsingtao Beer provided consumers with a beer feast integrating eating, drinking, playing, performances, and entertainment, strengthening brand influence among local consumers. Such annual regular activities are being held across the country. As the beer consumption peak season approaches, Tsingtao Beer festivals are starting one after another, and Tsingtao Beer's production and sales will enter an inertial growth channel, with sales expected to further deepen in the second quarter. In addition, Tsingtao Beer has continuously expanded its overseas markets and sales network in recent years. It now sells to 94 countries and regions worldwide, with sales volume increasing 11.6% year-on-year in 2016. Among them, the development of new markets is providing conditions for Tsingtao Beer's capacity release. For example, Tsingtao Beer previously exported to Russia via Heilongjiang, which is beneficial for the capacity release of local factories and the expansion of export scale. Tsingtao Beer's accumulated momentum for future development has also attracted the attention of brokers. Daiwa Securities released a research report stating that Tsingtao Beer's 2017 sales target growth is expected to be 2% higher than peers, and raised its target price to 33.9 yuan. For domestic beer, this is the worst of times and the best of times. Beer consumption upgrades and the impact of imported beer are causing domestic beer companies to suffer, but what is brought is the long-awaited upgrade of the beer industry and enterprises. After all, no one wants to continue in the era of "not earning a penny from a bottle of beer" or even "selling beer at a loss." For national beer brands represented by Tsingtao Beer, under pressure, this is an era to show their capabilities. Tsingtao Beer's "reverse growth," what do you think? Leave a comment below to share! -END-