Trang 1 FOREIGN TRADE UNIVERSITYFACULTY OF INTERNATIONAL EDUCATIONFinal Report Topic: Analyzing strategy of Saigon Beer Alcohol andBeverage Joint Stock Corporation Sabeco Class: F – UOB
FOREIGN TRADE UNIVERSITY FACULTY OF INTERNATIONAL EDUCATION Final Report Topic: Analyzing strategy of Saigon Beer Alcohol and Beverage Joint Stock Corporation (Sabeco) Class: F – UOB – 13A Subject teacher: Nguyen Hai Ninh Student name: Pham Viet Bach Trinh Tien Viet Nguyen Minh Hieu Nguyen Bao Ngoc Cao Minh Hoang Acknowledgements First and foremost, we would like to express my sincere gratitude to our Subject Teacher – Assoc Prof Dr Nguyen Hai Ninh, for his continuous support during our report in terms of his patience, motivation and vast knowledge We have received great help through his guidance and we could not have asked for a better teacher for our report We would also like to thank my family and friends for always supporting, believing in us and actually took the time out to read this lengthy report! 1| P a g e TABLE OF CONTENT 2| P a g e INTRODUCTION Beer is one of the most potential markets and shows extremely positive changes and development after the Covid-19 pandemic Government policies as well as altering in consumer buying habits are factors which force beverage trading companies in general and alcoholic beverages in particular must come up with specific strategies to catch up with the consumer market This report will point out the internal and external influences of one of the largest beer business in Vietnam Saigon Beer Alcohol and Beverage Joint Stock Corporation (Sabeco) before and after the Covid-19 pandemic From there, some specific recommendation are proposed BEER INDUSTRY BACKGROUND 2.1 World beer market 2.1.1 Overview The global market for beer is an extremely competitive and dynamic business that is driven by a variety of variables including the preferences of consumers, the shifting demographics of the population, and the conditions of the economy The market has seen tremendous expansion over the past few years, driven by the increasing popularity of craft beer and changing consumer preferences towards premium and low-calorie beverages This growth has been driven by the increasing popularity of craft beer The market for beer may be broken down into several distinct submarkets according to the product type, packaging, distribution channel, and geographic region Lager, ale, stout, and porter, as well as other types of beers, make up the product type section Lager beer is the most common style of beer consumed all over the world and accounts for a major portion of the market Cans, bottles, and draught beer all fall under the category of packaging The on-trade and off-trade channels are also included in the category pertaining to distribution channels The global market for beer may be broken down into the following regions based on geography: North America, Europe, Asia Pacific, Latin America, and the 3| P a g e Middle East and Africa Germany is both the greatest producer and consumer of beer in Europe, making it the largest beer market in the world The beer market in Europe is the largest market overall The Asia-Pacific area is anticipated to experience the greatest rate of growth over the next few years This is due to the region's rapidly expanding population, rising per capita earnings, and shifting preferences among 2.1.2 Revenue According to Statista, revenue in the Beer segment amounts to US$610.00bn in 2023 The market is expected to grow annually by 5.44% (CAGR 2023-2027) [6] Alcoholic Beer and Non – Alcoholic Beer revenue from 2014 to Jan 2022, predicted from 2023 to 2027 (In billion USD) The Alcoholic beer revenue witnessed a downward trend in the period of 2014 to 2016 before slightly increased by 35 billion USD in the next years However, with the disadvantageous affect of the Covid 19 – pandemic which limit customer’s demand as well as mobility, the data plummeted from 613.50 to 509.90 in 2020 The sign of the beer market recovery can be seen with a gradual increase until 2022 and it is expected to rocket in the following years [7] 4| P a g e The demand for these products across the globe has increased rapidly, eliciting a corresponding increase in the overall market for flavored beer Furthermore, the emergence of new brewing technologies in developing economies has also contributed to increased consumption patterns in subsequent generations Due to this, there has been an increase in overall sales growth in the market 2.1.3 Sale channel Percentage of two beer sale channel from 2017 to 2022, predicted from 2023 to 2025 [8] As can be seen, offline channel was the always the preferable choice by the majority of customers with the account for more than 90% in the whole period However, online channel witnessed a gradual increasing trend Starting at the lowest point with 2.3% in the first year of data collection, this data reached its peak with 6.9% in 2021, which is the most affected year by Covid – 19 pandemic Due to the social distancing policies as well as the mobility limitation, it is understandable for the growing trend of using online channel for buying beer Nevertheless, the percentage of online channel after Covid – 19 are approximately two times higher than before the pandemic and it is expected to remain unchanged until 2025 The market grew exponentially post the COVID-19 pandemic due to the opening of new bars, pubs, and restaurants and increased in-home consumption Similarly, 5| P a g e Document continues below Discover more International from: business Trường Đại học Ngo… 999+ documents Go to course 40 29 196 Samsung Electronic QUN TR HC International business 100% (25) BÁO CÁO CUỐI KỲ CHUYÊN ĐỀ ĐỊNH… International business 98% (42) Pauline cullen the key to ielts writing task International business 100% (19) Insurance 32 International business 97% (38) Dinh huong chien luoc kinh doanh quoc te c… International business 100% (16) 27 Báo cáo thực tập khóa - sv Nguyễn Min… International 100% (15) cans and pint beer sales have witnessed an overwhelming business demand due to their convenience Over the medium term, changing lifestyles, the increasing consumption rate of alcoholic drinks, rapid urbanization, and high disposable incomes are expected to drive the global beer market Introducing new ingredients and innovative combinations combining salty, fruity, and tart flavors in craft beers have increased its appeal among the millennial crowd 2.2 Vietnamese beer market 2.2.1 Overview of Vietnamese beer market Beer is among the most popular beverages in Vietnam Enjoying a cold glass of “bia hoi", a type of draught beer, on the street stalls has become an iconic and communal part of the Vietnamese drinking culture, especially in summer The popularity of this beverage in Vietnam has made the country one of the largest beerconsuming nations worldwide Besides, Vietnam also is among the top ten beer producers globally Fierce competition between domestic and foreign brands Bia hoi – fresh beer, often brewed informally and privately, is a very affordable drink On the other hand, thanks to increasing disposable income, branded bottled and draft beer has become more common among Vietnamese for both out-of-home and in-home consumption despite the higher price tags The market for branded beer in Vietnam has seen fierce competition among both international and local breweries In 2021, the Dutch brewing company Heineken ousted ThaiBev’s Sabeco to become the leading beer brand by market share after years of being in second place Although Heineken’s market share was only two percent higher than that of Sabeco, its distributor, Heineken Trading, recorded significantly higher revenue than its largest competitor Noticeably, the popularity of beer brands in Vietnam varies from region to region In that year, the Ha Noi-based brewery Habeco held around 11 percent of the total share of the market, as the most popular beer choice in northern Vietnam 6| P a g e 2.2.2 The recovery of Vietnames market after Covid – 19 Growth in retail goods from January to July in 2022 (in thousand billion VND) According to the General Statistics Office [9], the total retail sales of consumer goods and services in July in 2022 was estimated at VND 486,000 billion, up 2.4% over the previous month and up 42.6% over the same period last year - 2021 This scale and growth rate is even higher than the same period in the years before the Covid-19 epidemic In the first months of 2022, total retail sales of consumer goods and services was estimated at VND 3,205 billion, up 16% over the same period According to the General Statistics Office, the accumulated domestic beer output in the first five months of 2022 has reached 2.03 billion liters, an increase of nearly 19% compared to the same period of 2021 and an increase of 6% compared to the same period in 2019 before the epidemic With the above trend, a series of enterprises in this industry have recorded high growth in revenue and profit in the first half of 2022 Even, the business results of many brewers have increased beyond the pre-epidemic period 7| P a g e 2.2.3 The Recovery of Vietnamese beer market The COVID-19 pandemic has hit the beer industry in Vietnam hard As the sales of this beverage rely heavily on out-of-home consumption, the revenue of the beer market has suffered during the imposed lockdowns in the country In the first year of the pandemic, the average beer consumption per capita went down by over seven liters compared to the year before As a result, in the second quarter of 2021, although most listed beer producers recorded positive revenues, many of them had no profit or even faced losses Due to the prolonged impact of the pandemic in the country, even some of the largest beer brewers suffered a reduction in their sales in 2021, such as in the case of Sabeco On the other hand, as Vietnam has removed most of its COVID-19 restrictions from the beginning of 2022, the food and beverages industry has been slowly returning to its pre-pandemic level, signaling recovery for the beer industry 8| P a g e