Publicly available information shows that in January-February 2020, China's beer enterprises above scale produced 3.159 million kiloliters.
With the epidemic gradually under control, all industries in China are beginning to return to normal, and China's beer industry is also beginning to recover.
Under the environment of consumption upgrading, the business model of the beer industry has also changed, and channel reform has become an important driving force for the industry's high-end.
At present, the channel upgrading of beer manufacturers has shown two major trends: dealer empowerment and online and offline synergistic development.
High-end trend, the position of the dealer is more and more important
High-end products are concentrated in the ready-to-drink channel, the upgrading trend is more clear. According to the different sales terminals, the beer channel is mainly divided into two categories of ready-to-drink and non-ready-to-drink, and the sales volume of China's beer ready-to-drink/non-ready-to-drink channel accounted for 51.4%/48.6% in 2019, and the proportion of the ready-to-drink channel declined due to the impact of the epidemic in 2020, and the proportion of ready-to-drink/non-ready-to-drink is expected to be 48.6%/51.4%.
The ready-to-drink channel sells high-end products, with a high threshold and premium level, while the non-ready-to-drink channel mainly sells low-end products. Therefore, the structural upgrading of the beer industry's premiumization will mainly focus on the ready-to-drink channel.
Empowering distributors to enlarge the high-end market. Due to the strong bargaining power of restaurants, nightclubs and other sales terminals, and the longer settlement cycle of the dealer's capital turnover ability to put forward a challenge, the dealer resource endowment and the importance of the management ability is particularly prominent.
High-end channels, the relationship between manufacturers and dealers by the loose relationship of interest into a close strategic partnership, on this basis, manufacturers need to empower dealers, dealers to give the appropriate training and support, and the development of a rigorous assessment program to guide dealers to cooperate with the enterprise's strategy of high-end products, and hand in hand to *** to expand the high-end market.
Online synergy offline, e-commerce to help the development
Electricity to promote the product high-end, brand image is expected to improve. With the development of beer channels from traditional catering and retail to more diversified scenarios, e-commerce is also gradually becoming a major hotspot for channel reform.
Despite the fact that beer products have high requirements for freshness, and the main drinking scene of beer in China is eating out, the development of online channels in the beer industry is relatively slow, but the e-commerce channel can still be used as a supplement to other channels.
In addition, e-commerce is also the product display platform of major beer manufacturers, the online channel is mainly to promote high-end products, which is conducive to the company to promote the high-end products and enhance the brand image.
Budweiser, Tsingtao and China Resources lead the online development. According to the 2019 Ali online channel sales data, Budweiser, Tsingtao and China Resources lead the development of other peer companies in the online channel, with a market share of 32.9% (of which 13.81% for Harbin, 13.67% for Budweiser and 5.42% for Corona), 14.76% and 8.53% respectively.
Budweiser InBev: After meticulous market research, Budweiser cut its way into China's e-commerce market in 2014, reaching a deep cooperation with Tmall to open an online beer flagship store.
In 2015, Budweiser set up an e-commerce division to specialize in the online market. Budweiser's online flagship store focuses on high-end products and continues to reshape its brand image, optimize customer experience, and enhance customer stickiness through new retail means such as the Tmall Global Liquor Festival and Tmall Super Brand Day.
Qingdao Beer: Tsingdao Beer builds and continuously expands the "Internet+" channel system, and amplifies the three-dimensional "official flagship store + official mall + online retailers + distribution franchise" through the establishment of a professional organization for e-commerce channels. E-commerce channel leading edge, and actively cooperate with third-party platforms, multi-channel to meet the purchase needs of consumers in the Internet era and consumer experience.
Chinese Resources Beer: In July 2018, China Resources Snow Brewery officially signed a comprehensive strategic cooperation agreement with Jingdong to carry out new e-commerce marketing.
This all-round in-depth cooperation mainly includes four aspects:
1) Continuously create the ultimate experience for users.
2) Enhance the brand image of CR Snow in all aspects.
3) Assist in the development and marketing of new products.
4) To do a good job in market development and layout.
The data from the professional version of the Eyeball App shows that there are nearly 4.3 million e-commerce related enterprises in China***, with Guangdong Province ranking first in the country with nearly 840,000 related enterprises, followed by Zhejiang Province and Fujian Province, which both have more than 500,000 related enterprises.
As of October 19, 2020, China has added more than 1.2 million e-commerce related enterprises (all enterprise status) last year.
Among them, more than 1.11 million e-commerce-related enterprises were added in the first three quarters, up 65.98% year-on-year from 2019. Nearly 500,000 new related businesses were added in the third quarter, up 16.77% YoY.
The national market is divided into groups, and the leading enterprises show their skills
The industry pattern is oligopoly, and the five major manufacturers are each based in several cities.2010-2019, China's beer industry CR5 from 60.4% to 73.5%, but compared to the United States in 1990 reached the level of 90% of the CR5, the concentration of China's beer market is still a certain amount of room for improvement.
Specifically, the market share of the top five beer makers occupy the advantage of different regions, China Resources, Tsingtao, Budweiser three basically realized the national layout, of which: China Resources corresponds to Guizhou, Sichuan, Anhui and other regions, Tsingtao corresponds to Shaanxi, Shandong and other regions, Budweiser corresponds to Jiangxi, Hubei, Fujian and other regions;
Yanjing, Carlsberg's regionalization attributes are more obvious, of which: Yanjing corresponding to Guangxi, Beijing, Beijing and other regions. Among them: Yanjing corresponds to Guangxi, Beijing and other regions, and Carlsberg corresponds to Xinjiang, Ningxia, Chongqing and other regions.
CRC + Heineken: channel-enabled brand, high-end market
CRC and Heineken are a match made in heaven. As early as 1983, Heineken entered the Chinese market, but the taste of Heineken is on the thick side, it is difficult to get the recognition of Chinese consumers who are accustomed to drinking light beer, and the effect of Heineken's self-built sales channels is not ideal, resulting in its slower development in China, and Budweiser came to the fore.
In 2018, China Resources Breweries and Heineken agreed to a long-term strategic partnership, in which the two will complement each other's channels and brands, and work together to ****promote China's high-end beer market.
Riding on the CR channel express, Heineken is expected to realize the nationalized development. China Resources has basically formed a national layout, Guizhou, Sichuan, Anhui, Liaoning are its base market, market share of more than 60%, in Jiangsu, Jilin, Heilongjiang and other places in the market share of more than 40%.
Heineken will leverage CRC's market strengths to build a high-end sales system and realize nationwide marketing and sales, while CRC will be able to leverage Heineken's established brand influence and mid- to high-end channel operation experience to develop the domestic high-end beer market.
Strengthening terminal control, the second reform shows determination. CRC's first channel reform occurred in 2002, snow beer in the beer industry's traditional "manufacturers - wholesalers - secondary wholesalers - - terminal" distribution model. -Terminal" distribution model, began to serve the terminal as the core of the depth of the distribution model, that is, China Resources direct terminal channel maintenance, in order to enhance the control of the channel.
In June 2018, CR Snow announced the launch of the second transformation of the national channel, and its core concept CDDS model includes the construction and management model of the channel, which consists of the channel model, the distribution management model, the distributor operation model and the salesman work model.CDDS model can further strengthen the company's control over the terminal, and establish a strong barrier at the terminal.
Qingdao: Flexible channel model for different markets
Strengthening terminal control and consolidating market position. As one of the giants in the domestic beer industry, Tsingtao Brewery continues to deepen its marketing and sales network, strengthen its ability to maintain and control its terminal customers, and consolidate and improve its dominant position in the base market and the share of emerging markets.
At present, Tsingtao Beer's market share in Shaanxi, Shandong, Shanghai, Shanxi and Hainan has reached over 50%, and also occupies a high market share in Hebei, Gansu and Guangdong;
According to the channel research data, the company's share in catering/nightclubs/circulation/KA channels is 50%/10%/30%/10% respectively.
Qingdao Beer adopts a unique "key account + micro operation" channel model. The key account model refers to selecting and cultivating distributors, improving their marketing capabilities, and enabling them to grow into key accounts in a specific region, thus supporting the company's business growth.
The micro-operation model refers to the use of regional platforms to strengthen the execution of Tsingtao Brewery's business teams and their ability to control the end-user premises through strict management of the business teams' framing, objectives, behavior, traceability and performance, and ultimately to achieve a rapid increase in the overall profitability and market share of the value chain.
Channel operations are tailored to local conditions, with a division of labor between manufacturers and distributors. Tsingtao Brewery chooses different operation modes in different regions according to regional market share and distributor capabilities.
In markets with a market share of less than 10%, Tsingtao Brewery chooses an "intensive model"; in markets with a market share of 10%-50%, Tsingtao Brewery chooses a "hybrid model"; and in markets with a market share of more than 50%, Tsingtao Brewery chooses an "exclusive model". The company's business model is the "Exclusive Model" for markets with a market share of more than 50 percent.
The localized channel operation mode can better meet the needs of different markets and maximize the company's channel efficiency.
Budweiser: High-end operation in a class of its own, unique channel management
The company's footprints span the globe, showing its dominant nature. Budweiser InBev is the world's largest beer maker, with more than 500 beer brands and sales in more than 150 countries.
In 2019, Budweiser InBev's global sales volume reached 56.1 billion liters and sales revenue reached $52.3 billion, of which North America/Central America/South America/Europe Middle East and Africa/Asia-Pacific sales accounted for 19.3%/23.9%/25%/15.3%/16.6%, respectively.
Budweiser entered the Chinese market in 1995 by acquiring a brewery in Hubei province, and since then, it has been acquiring local breweries for years, laying the foundation for its future strategic layout.
In 2011, Budweiser InBev launched the core city strategy in China, relying on the big business system to buy out the nightclubs, restaurants and other sales terminals in the six core cities (Beijing, Shanghai, Shenzhen, Guangzhou, Hong Kong and Chengdu) to quickly capture the high-end market.
According to Global Data, Budweiser accounted for 46.6% of China's high-end and ultra-high-end beer market in 2018, and the current combined share of Budweiser Asia-Pacific China's food and beverage + nightclub channels reaches 55%, which demonstrates its strength in high-end operations.
Focusing on the high-end market, Budweiser has rich experience in channel operation. Budweiser has been focusing on the development and expansion of the high-end market since its entry into China, and has accumulated rich experience and unique insights in the construction and management of high-end channels over the years.
From the perspective of channel construction, Budweiser has a complete set of channel construction model, usually through a comprehensive coverage of KA channels to quickly enter the blank market, and then gradually lay out the nightclubs, restaurants and other high-end channels to build the foundation of high-end, and finally to realize the full coverage of the product and channel to form the base of the market advantage.
From the perspective of channel management, Budweiser has created the High-End Company model (HEC), which specializes in serving high-end and craft beer brands in the category framework, equipping them with professional high-end and ultra-high-end core distributors and channel resources.
Carlsberg+Chongqing: Organizational restructuring to improve efficiency, channel reform to help development
Major restructuring to lead to resource integration, channel upgrading is expected to accelerate. Carlsberg first entered the Chinese market in 1978, and gradually occupied the markets of Ningxia, Tibet, Xinjiang and Yunnan through intensive acquisitions between 1981 and 2005, becoming the absolute leader in the western region. According to the company's annual report, Carlsberg's market share in western China reached 63% in 2019.
Chongqing Brewery's dominant markets, on the other hand, are in Chongqing, Sichuan and Hunan, and the company's revenue share in the three regions in 2019 will be 72%/20%/7%, respectively.
After the completion of this asset reorganization, Carlsberg and Chongqing Brewery will integrate existing channel resources and further promote channel construction and upgrading.
"Key Account System" empowers distributors, and digital upgrading boosts development. Carlsberg actively promotes brand upgrading and high-end development in the western base market, and implements a big-city strategy in the eastern coastal region, giving dealers enough say through the key account system to maximize the subjective initiative of the channel and rapidly expand the market.
As of 2019H1, the company's big city strategy has covered 36 cities, accounting for 20% of its business in China.
In addition, digital transformation is a major core of the company's "Sail 22" strategy. At present, the company has basically completed the digital upgrading of the channel, and through the back-end analysis of the behavior of sales and dealers, the company has formulated regional strategies and KPIs to further empower dealers' development.
Tianfeng Securities said that the beer industry profitability is expected to continue to improve, pay attention to the industry ring improvement opportunities. Beer catalyzed less in the fourth quarter, but the layout of next year's opportunities have gradually emerged, suggesting that the absolute return of funds to start focusing on.
It is expected that the beer industry will increase the promotion of high-end beer, constantly upgrading categories, accelerating the upgrading of the product structure of the industry.
Chuan Cai Securities said that, at present, the domestic consumption scene gradually recovered, beer moving sales continue to improve, pulling the demand for beer manufacturers.
Industry production and operation continues to improve, market concentration increases superimposed on consumption upgrade, the beer industry high-end steadily advancing, the head of the wine enterprise is expected to continue to benefit, showing the strongest and strongest Matthew effect.
Note: The content of this article is mainly extracted from the Northeast Securities, the Chinese and foreign industry research to organize and push