BU China Introduction Jean Jereissati China President
Personal Introduction
Connection with Strategy
Two-Engine Growth Strategy to Win in China Win nationally in premium while expanding and increasing leadership, province by province PREMIUMIZATION Hitchhiker High Road Stronghold High Low Expansion China Average Low High DISTRIBUTION
Two-Engine Growth Strategy to Win in China Win nationally in premium while expanding and increasing leadership, province by province PREMIUMIZATION Hitchhiker High Road Stronghold High Low Expansion China Average Low High DISTRIBUTION
PREMIUMIZATION High Road High Road Stronghold Hitchhi ker Careful selection of cities with the highest Middle/Affluent Class Population Expansion China Average concentration… DISTRIBUTION Source: BCG, MAC = Middle/Affluent Class Population
PREMIUMIZATION High Road High Road Stronghold Hitchhi ker Premiumization as the biggest driver of revenue per HL…. Expansion China Average % of volume by segment % of volume growth DISTRIBUTION 0.2% 6.3% Industry growth 26.2% 2012 2013 2014 2015 1H Super Premium 69.7% 23.1% 35.0% 30.5% Premium 11.5% 11.5% 10.6% 10.0% Core+ 10.8% 12.1% 6.0% 4.8% 67.3% Core & Value -4.3% 0.0% -8.8% -9.0% Total -0.6% 3.2% -4.2% -4.5% 2014 Industry Premium Segment is more than 6% of the industry, and growing consistently above 10% Source: BCG, Internal Report
PREMIUMIZATION High Road High Road Stronghold Hitchhi ker ABI over-indexes in Premium (22%), Expansion China Average and outperforms the industry segment growth by 2x DISTRIBUTION % of volume growth % of volume by segment 0.2% 0.2% 6.3% 22.3% 26.2% Industry growth ABI growth * vs industry 2012 2013 2014 2015 1H 24.6% Super Premium 69.7% 23.1% 35.0% 30.5% >3.0x Premium 11.5% 11.5% 10.6% 10.0% >2.0x 67.3% Core+ 10.8% 12.1% 6.0% 4.8% >1.5x 52.9% Core & Value -4.3% 0.0% -8.8% -9.0% ~1.0x Total -0.6% 3.2% -4.2% -4.5% 2014 Industry 2014 ABI Source: BCG, Internal Report * ABI Volume refers to 1H15 vs. 1H14
PREMIUMIZATION High Road High Road Stronghold Hitchhi ker 1HL of Super Premium = 9 HL of Core/Value Expansion China Average DISTRIBUTION % of volume by segment 0.2% 0.2% GROSS MARGIN 6.3% INDEX 22.3% 26.2% 9.0 X Super Premium 24.6% 5.0 X Premium 67.3% 52.9% 1.6 X Core+ 100% Core & Value 2014 Industry 2014 ABI Source: BCG, Internal Report
Budweiser being a clear winner in Premium….. BUDWEISER VOLUME KHL 15,400 12,283 9,426 7,159 +29.1% 11-14 CAGR 2011 2012 2013 2014 BUDWEISER SHARE OF PREMIUM 57.2% 50.5% 43.2% +20.6 pp 36.6% 14 vs. 11 2011 2012 2013 2014 Source: Internal Report
Two-Engine Growth Strategy to Win in China Win nationally in premium while expanding and increasing leadership, province by province PREMIUMIZATION Hitchhiker High Road Stronghold High Low Expansion China Average Low High DISTRIBUTION
PREMIUMIZATION Expansion High Road Stronghold Hitchhi ker Leap-frog growth in areas around our new breweries… Expansion China Average DISTRIBUTION 2010 2011 2012 2013 2014 2015 Liaoning Liaoning Hebei Jiangsu Henan Henan Sichuan Sichuan Sichuan Yunnan Yunnan Yunnan GD GX GD Source: Internal Report
Harbin being a strong engine to fuel expansion… HARBIN VOLUME KHL 25,829 23,888 20,083 18,748 +11.3% 11-14 CAGR 2011 2012 2013 2014 HARBIN T3F among LDA Drinkers 45.9 39.1 31.2 27.6 +10.4 19.6 1H15 vs. 1H14 2011 2012 2013 2014 2015 YTD Source: Equity Tracker, Internal Report
Two-Engine Growth Strategy to Win in China Win nationally in premium while expanding and increasing leadership province by province PREMIUMIZATION Hitchhiker High Road Stronghold High Low Expansion China Average Low High DISTRIBUTION
What a Stronghold looks like… Population (000’) Beer Industry (000 hl) Consumption Per Capita (liter) % of Premium & Core+ Industry ABI Market Share (Yr 2014 ) Fujian ABI Relative Market Share Stronghold High Road Expansion China Average Source: SEEMA, Internal Report
PREMIUMIZATION Strongholds outperforming China Average High Road Stronghold Hitchhi ker Our Stronghold footprint is well positioned with two-engine growth strategy Expansion China Average ( 2014 vs. 2011)…. DISTRIBUTION % of Premium and Core+ Industry (2014) (2011) 1 Stronghold High Road 1 HIGH 8 MHL Size of Bubble = ABI volume LOW Expansion China Average LOW HIGH 2014) 2011) Relative Market Share (Size x Biggest Competitor Source: Bain Analysis, SEEMA, Annual Report, Internal Report
PREMIUMIZATION Strongholds outperforming China Average High Road Stronghold Hitchhi ker Our Stronghold footprint is well positioned with two-engine growth strategy Expansion China Average ( 2014 vs. 2011)…. DISTRIBUTION % of Premium and Core+ Industry (2011) (2014) 1 Stronghold High Road 3 HIGH 4 8 MHL Size of Bubble = ABI volume 5 4 2 3 LOW 5 2 Expansion China Average LOW HIGH 2011) 2014) Relative Market Share (Size x Biggest Competitor Source: Bain Analysis, SEEMA, Annual Report, Internal Report
Winning Journey Trade Up + Distribution in Strongholds Sales Machine Premiumization Expansion Area % of Premium and Core+ Industry (2014) 1 Revenue Trade Stronghold High Road Management Solutions 3 HIGH 4 Route to Key Market Accounts 5 2 LOW Digital Tech Sales Purchase Competitive Intelligence Expansion China Average LOW HIGH Relative Market Share (Size x Biggest Competitor 2014)
Sales Machine Trade Revenue Management Solutions Route to Key Market Accounts Digital Tech Sales Purchase Competitive Intelligence
ABI has been consistently disciplined in driving Revenue… CAGR Grow NR/HL ahead of Competition (2011-2014) +8.6% TOP 3 +2.1% COMPETITORS 2011 2012 2013 2014 Source: SEEMA
Strong wholesaler partnership is one of our most relevant competitive advantages 1 2 3 4 5 6 7 8
Building strong partnerships with top wholesalers ELITE CLUB Source: 3 rd Party Survey, Internal Report
360-ALL-IN Trade Activation focusing on Point-of-Connection EXPERIENCE, not only EXECUTION… Hotels/Western Bars Chinese Rest. CD Nightlife OffTrade Western Bars Convenience Store Western Restaurants Food Street/Hot Pots Chinese Restaurant AB Rooftop
…NIGHT LIFE
…AB Chinese Restaurant
…ROOFTOP/WESTERN CHANNELS
…CD Chinese Restaurant
Best Practice: “Supreme Circle” Trade Program Leverage the technology to build long term loyalty program with key customers to help us win Chinese restaurant channel .
Relationship + economies of Scale + Top quality
Connection with Strategy
Super Premium Company – a company inside our company Building the capabilities for the next wave….. Focus Brands Route to Market Digital / Social Media - Building the capabilities - Focus brands to target - Digital, content and sales of an enhanced and new channel as the key platform for the specialized wholesaler super premium portfolio opportunities and network. occasions
Next Channel Frontier with Hyper-Speed Growth T-MALL JD YHD 2015 2014 +723% +784% +206% 15 vs. 14 15 vs. 14 15 vs. 14 YTD YTD YTD Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Rank #1 in share (45%). Rank #1 in share (24%) Rank #1 in share (22%) • • • Source: Internal Report, all information refers to volume.
… Managing complexity…. Brand Volume Contribution by Channel KTV/Dancing Club Traditional Trade/Other Bar/Western/Travel Journey KA/E-commerce Chinese Restaurant Budweiser Harbin Imported Super Premium Source: Internal Report
… Managing complexity…. Brand Volume Contribution by Channel KTV/Dancing Club Traditional Trade/Other Bar/Western/Travel Journey KA/E-commerce Chinese Restaurant Budweiser Harbin Imported Super Premium Source: Internal Report
… Managing complexity…. Brand Volume Contribution by Channel KTV/Dancing Club Traditional Trade/Other Bar/Western/Travel Journey KA/E-commerce Chinese Restaurant Budweiser Harbin Imported Super Premium Source: Internal Report
Strengths…..Win with the winners SEGMENTS CHANNELS Source: Internal Report Source: Internal Report CONSUMERS GEOGRAPHIES BUD T1F AMONG HIGH INCOME DRINKERS 21.6 19.5 18.0 17.8 15.5 2011 2012 2013 2014 2015 YTD Source: Equity Tracker, internal Report Source: Bain Analysis, Internal Report
Opportunities SIZE OF PREMIUM/SP INDUSTRY DISTRIBUTION % of volume by segment 3,200,000 POCs ~4X Brazil still to be reached Source: BCG Source: Nielson Study, Internal Report 2014 2025 CORE PROFITABILITY SHAPE INDUSTRY WITH INNOVATION
Journey towards leadership… CHINA MARKET SHARE EVOLUTION 18.3% 17.5% 15.0% 13.4% 12.3% 12.2% 2010 2011 2012 2013 2014 2015 H1 Source: Seema and internal reports. Considers full M&A volumes in the year of acquisition
Recommend
More recommend
