Recently, Tsingtao Brewery Company Limited(600600) launched the super high-end new product “Legend of the first generation”. The e-commerce platform shows that the price is 2698 yuan / 1.5L * 2 bottles.
In the face of this new product with a single bottle price of more than 1000 yuan, netizens talked about it one after another. Some questioned it as an IQ tax, while others understood it. It was also his freedom for someone to drink 10000 bottles of beer.
The reporter noted that in addition to Tsingtao Brewery Company Limited(600600) , Budweiser beer recently launched a limited edition beer called “master legend” on the e-commerce platform, with a price of 1588 yuan / bottle, even exceeding the market guidance price of 1499 yuan in Feitian Maotai. Earlier, China Resources beer launched a high-end series of beer “Li”, priced at 999 yuan / box (2 bottles).
beer giants have launched ultra-high-end new products
On January 9, Tsingtao Brewery Company Limited(600600) “Legend I” super high-end art collection was released in the Centennial cellar of Tsingtao Brewery Company Limited(600600) Centennial factory. According to reports, this is a collection of beer, whisky, wine and champagne.
He Yong, Secretary General of China Wine Association and chairman of beer branch, said in a speech that 2021 is the first year of high-end beer in China, which is not only the high-end brewing technology, but also the high-end consumption trend in the new era.
The reporter inquired about Tsingtao Brewery Company Limited(600600) tmall flagship store and found that since its launch on January 9, 6 orders of this ultra-high-end new product have been sold.
On the way to high-end, Tsingtao Brewery Company Limited(600600) is not alone. Recently, Budweiser InBev, the world’s largest beer producer, launched Budweiser’s “master legend” limited edition gift box for the year of the tiger. Budweiser tmall flagship store shows that this gift box costs 1588 yuan, and 25 orders have been sold.
China Resources Snow Beer launched a high-end series of beer “Li” in May 2021, priced at 999 yuan / box (2 bottles). Hou Xiaohai, CEO of China Resources snowflake beer, said at that time that “Li” had no benchmarking products in the beer industry, but “Li” was at the same table with Maotai. Tmall’s flagship store shows that the monthly sales volume of “Li” is 200 +.
Although high-end beer is still relatively fresh in China, it is not uncommon abroad. For example, overseas high-end brands such as Asahi and Carlsberg in Japan have also been loved by Chinese consumers.
For the beer giants have launched high-end products, Zhu danpeng, a Chinese food industry commentator, said that the profits of high-end products are higher. From the consumer side, there is no shortage of consumers of high-end beer in China. They pursue personalization, differentiation and high-end. On the channel side, the perennial price war in China’s beer market has made the channel side very tired, and they benefit from the trend of high-end.
medium and high-end products become the main force of revenue
According to Euromonitor International standards, beer is divided into three grades: high-end (≥ 14 yuan / 500ml), middle-end (7-14 yuan / 500ml) and economical (< 7 yuan / 500ml) (the specific price depends on the actual situation due to different brand positioning). Major beer manufacturers also have beer products of corresponding grades.
China’s beer production has peaked and fallen since 2013. Driven by the upgrading of consumption on the demand side and the profit pressure of enterprises on the supply side, the industry has reached a high-end consensus since 2018. At present, the product focus of various manufacturers has gradually shifted from the original low-cost homogenized economic beer to middle-end and high-end products with diverse varieties and high prices.
Beijing Yanjing Brewery Co.Ltd(000729) said in the 2020 annual report that the industry concentration of China’s beer industry is high, and the proportion of high-end beer in the beer industry is gradually increasing. The sales volume of high-end beer of five beer enterprises such as Beijing Yanjing Brewery Co.Ltd(000729) accounts for about 80% of the overall market share. According to the annual report, Beijing Yanjing Brewery Co.Ltd(000729) in 2020, the operating revenue of medium and high-grade products was about 6.028 billion yuan, accounting for nearly 60% of the total revenue, with a year-on-year increase of 2.79%.
Tsingtao Brewery Company Limited(600600) revealed in the 2020 annual report that the sales of high-end products such as Centennial journey, amber rag, ogut, Hongyun, classic 1903 and pure draft beer totaled 1.792 million kiloliters, accounting for 46% of the sales of its main brand Tsingtao Brewery Company Limited(600600) . According to the semi annual report data of 2021, the main brand Tsingtao Brewery Company Limited(600600) achieved product sales of 2.528 million kiloliters, a year-on-year increase of 20.9%, of which the sales of high-end products increased by 41.4%, maintaining its competitive advantage in China’s medium and high-end beer market.
Guangzhou Zhujiang Brewery Co.Ltd(002461) according to the 2021 semi annual report, during the reporting period, the company’s beer sales increased by 10.25% over the same period last year, of which the sales of high-end beer increased by 23.01% year-on-year, and the sales of 97 pure raw products launched in 2019 increased by 121.03% year-on-year. During the reporting period, the revenue of high-grade products accounted for 56.73% and that of medium-grade products accounted for 35.97%.
Ping An Securities said that the high-end wave of China’s beer industry is expected to speed up in the next three years. From the perspective of high-end space, it is expected that the revenue space of China’s beer industry will reach 208.1 billion yuan in the next five to 10 years, with 42% expansion space compared with 2020. At the same time, high-end will be more flexible for profit release. Assuming that the net interest rate reaches 20%, the profit space will be 41.6 billion yuan.
Citic Securities Company Limited(600030) the research report believes that the turning point of high-end beer in China has come, which is not only the inevitable stage of the development of beer industry, but also the inevitable choice of beer leading companies after repeated games. The beer market has a broad space for upgrading, and it is expected that the high-end ones will win the world in the future.
