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Asahi wants to destroy a market that has proven surprisingly resilient during the coronavirus pandemic: non-alcoholic beverages.
Asahi’s decision followed Waste of $ 20 billion in beer brands such as Peroni, Pilsner Urquell and Carlton Draft in recent years. But Covid-19 has strengthened the consumer focus on all things “well-being”. Low sales and non-alcoholic beverages increased during the pandemic even pub closures they have led to a worldwide decline in beer sales.
“Non-alcohol is a good wholemeal product,” Atsushi Katsuki, Ashihi’s chief executive since March, said in an interview. “It helps solve social problems, connects us with new users and leads us to our profitability.”
Low, non-alcoholic beer sales have benefited as people spend more on drinks consumed at home during closures, which fits Asahi’s broader strategy of focusing on a margin higher Premium drinks.
The change has also been backed by pressure in Japan, where beer volumes have fallen for more than two decades and the government has tightened its crackdown on heavy alcohol consumption.
In Europe, Asahi’s non-alcoholic beer sales grew 10% in 2020 compared to the previous year, driven by the popularity of brands like Birell and Peroni Libera, even those of beer fell 6% by volume. Asahi has said it wanted to quadruple its non-alcoholic beverage sales ratio in Europe by 2030, from 5.1% last year.
The company, known in Japan for its flagship brand Super Dry, launched in March a low-alcohol product called Beery, which used the European beverage technology it acquired to recreate a beer drink with a low alcohol content. Its goal is to triple its proportion of beverages with 3.5% alcohol or less to 20% of its product mix by 2025.
“It’s not just about changes in consumption among young people,” Katsuki said. “Until now we couldn’t offer options for different circumstances to target people who can drink but can’t or people who want to drink but can’t.”
The volume of sales of low-alcohol and non-alcoholic beverages is expected to grow by 10.7% annually in the United States, 6.6% in the United Kingdom and 6.5% in Japan between 2020 and 2024, according to the group of beverage analysis. IWSR.
Rivals such as Anheuser-Busch InBev and Heineken have also been building non-alcoholic wallets. But analysts have taken a position to wait on how much these products will contribute to the gains, as the low, alcohol-free market accounts for less than 2% of intoxicating beverage consumption. Asahi’s operating profit fell a third last year as it depended heavily on sales to restaurants and pubs.
Katsuki, 61, took over the world’s seventh-largest brewer in a drastically more difficult business environment than the previous five years, when Asahi spent billions collecting AB InBev’s European and Australian assets. including Grolsch and Carlton & United Breweries.
The company has ruled out any major acquisitions until 2024, when it expects to reduce its net debt to three times profit before interest, taxes, depreciation and amortization, compared to its current level of six times.
“We are discussing internally whether our current portfolio and our footprint are sufficient. There’s also the question of whether it’s okay to drink just beer, ”Katsuki said.
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