Carlsberg hungry for growth in China
The world’s third largest brewer will double down on expansion in Asia, honing its focus on China as part of its growth targets to 2027.
On Tuesday, Carlsberg raised its 2027 targets for operating profit growth and revenue, triggering a 5% spike in shares as the markets opened on Wednesday.
New CEO Jacob Aarup-Andersen, who replaced Cees ‘t Hart in September 2023, has reviewed his predecessor’s strategy and announced more ambitious goals for the company.
New targets include higher spending on marketing for its more expensive beers, pushing further into seltzers and cider, and focusing on expansion in China, its largest market, as well as Asia more widely.
Expansion in Asia
Asia has been and remains a key volume and value growth driver, the brewer said in a statement on its new long-term growth objectives.
In China, the company is eyeing up both value and volume growth through its portfolio of local, international and ‘Beyond Beer’ brands, it said, with focus on western parts of the country as well as big cities.
Carlsberg hopes that developing and enhancing route-to-market strategies will also help to strengthen market share in existing big cities. For the future, recently entered and new cities also offer potential, though the company gave no further details of plans there.
The brewer is taking a risk, betting on a rebound in the Chinese economy. Carlsberg said while the consumer environment in China remained subdued, it expected to grow volumes there through market share expansion.
In 2024, it expects organic operating profit growth of between 1% and 5% in 2024. However, this is below some analyst predictions.
In 2024, Carlsberg expects to increase sales and marketing investments by over 10%. Beyond China, Vietnam and India are also focus areas for the multinational. In Vietnam, Carlsberg said it would “continue the execution of our multi-year transformation strategy with its clear ambition to accelerate momentum by increasing investments and achieve growth through focus on key brands, regions and capabilities”.
In India, the company plans to “investigate an acceleration plan when possible”.
Aarup-Andersen said: “We see clear opportunities to inject investments and accelerate our long-term growth.”
Last month, Carlsberg Brewery Malaysia Berhad announced it has entered a strategic agreement with Japan’s Sapporo Group across Malaysia and Singapore. The Danish multinational brewer’s Malaysian arm has entered a Licence Agreement and Distributorship Agreement with Sapporo Breweries Limited, a renowned Japanese company listed in the Prime Market of the Tokyo Stock Exchange. Read more on that story here.