Asahi recently announced its Q3FY2024 financial results, reporting a 2.2% year-on-year growth in revenue to JPY2.17bn (US$13.9mn) and a 2.3% year-on-year growth in core operating profit to JPY214.2mn (US$1.37mn).
These numbers were attributed to both price hikes justified by a premiumisation strategy, as well as positive performance by Asahi’s beer business around the globe.
“Despite facing challenging business conditions, businesses in different regions complemented each other’s performance, and we achieved steady growth in earnings across the Asahi Group as a whole,” Asahi President and Group CEO Atsushi Katsuki said via the latest report.
“This was driven by sustained increase in unit sales prices owing to prudent pricing strategies and premiumisation.
“In Japan, the shift in demand towards the beer category following liquor tax revisions continued to contribute to higher earnings [and] increased sales in the ready-to-drink (RTD) alcohol beverage and non-alcohol beer categories also played a significant role.
“Outside of Japan, Asahi Super Dry which is a top priority in our global brand portfolio, saw sales volume growth of +14% year-on-year, with strong sales maintained in South Korea, the UK, and other markets.”
Asahi also reported a stronger-than-average performance in its Europe market operations on the back of its local initiatives.
“Revenue (+5%) and profit (+12.5%) both rose year-on-year on the back of factors such as stable demand, higher unit sales prices driven by premiumisation, and the impact of the newly consolidated Octopi Brewing contract beverage facility,” it said.
“Some markets such as the United Kingdom came in below expectations, but performance exceeded expectations in the Czech Republic and Romania which [helped to pull up] sales volumes and revenue overall.”
Things were less rosy in its Oceania operations though, with profits falling significantly by -13.3% year-on-year due to poor demand.
“Sales volumes of alcohol beverages [in Oceania] declined following a deterioration in the market environment among other, [but] revenue increased 2.7% due to successful price revisions,” Asahi said.
“However, profits [still took a hit] and declined on the back of lower volumes of beer sales and higher variable costs.
“Overall [in this region we face a] weaker-than-expected performance from alcohol beverages in the face of continued uncertainty over the economy and an increasingly tough competitive environment.”
Adjacent focus
Whilst continuing to build on current regulations-driven beer growth, Asahi is pushing to further grow what it deems its Beer Adjacent categories in order to ensure sustained profits moving forward.
“We see that our global brands along with Beer Adjacent Categories - particularly RTD and non-alcoholic beer - are progressing on a steady trajectory, in line with the Asahi Group’s business portfolio strategy,” Katsuki said.
“Moving forward, we will continue to channel investments into our brands and innovation to solidify our core business foundations, [whilst] monitoring market and industry trends across each region.”