Business Dull
According to the 2023 financial report, Sabeco’s net revenue reached VND 30,461 billion, a 13% decrease compared to the previous year and even lower than 2016. Meanwhile, the company’s profit is still maintained at over VND 4,000 billion, but it has decreased by 23% compared to 2022.
The situation is no better for Sabeco’s competitor in the industry, Habeco. Throughout 2023, Habeco achieved a net revenue of VND 7,757 billion and a post-tax profit of VND 355 billion, a decrease of 7.7% and 30% respectively compared to 2022. In fact, Habeco’s revenue last year only slightly surpassed that of 2020.
For the beer giant Heineken, Vietnam is one of the key markets in the world. In the 2023 financial report, Heineken’s global revenue for the whole year reached 36.4 billion euros, an increase of 4.9% compared to the previous year. However, the total output for the year declined by 4.7%, with Vietnam and Nigeria accounting for more than 60% of this decline.
Looking at the overall market, the beer industry’s total revenue in 2023 decreased by 11% to nearly VND 45,700 billion. Post-tax profit plummeted at a faster rate, decreasing by more than 23% to less than VND 5,100 billion.
One frequently mentioned reason for the beer industry’s downturn is the strict enforcement of drunk driving regulations over the past year, with severe fines ranging from VND 6-8 million for motorcyclists and VND 30-40 million for car drivers (Decree 100/2019/NĐ-CP, amended by Decree 123/2021/NĐ-CP by the Government).
In addition, the general economic difficulties have led to tighter consumer spending and global supply chain disruptions, causing raw material prices in the beer industry to soar. Furthermore, according to Forbes, young people are increasingly restricting their alcohol consumption, leading to a sharp decline in alcoholic beverage demand not only in Vietnam but worldwide.
How are beer businesses coping?
In the difficult circumstances faced by the entire industry, Habeco has been taking multiple actions in the second half of 2023.
In December 2023, Habeco held an opening ceremony to introduce Hanoi Beer products officially imported through MIB Morris International Beverage Company in the US. Expanding the export market is one of Habeco’s strategic development priorities.
Habeco emphasizes the value of preserving over 130 years of history, embodying traditional essence. This was clearly demonstrated through a brand identity change in September 2023. Besides the goal of “preserving tradition”, Habeco also wants to “enhance its position” with a modern design, targeting young consumers.
In terms of product, the premium Hanoi Premium line was launched in December 2023 to provide a new experience for consumers.
The designs of Hanoi Beer cans.
Following the formula of product innovation and focusing on Vietnamese culture, in September 2023, Heineken introduced a new version of Vietnamese Beer from the brand Bia Viet. This brand appeared in 2020, targeting the mainstream beer segment with a design featuring the image of the Lac bird and East Asian bronze drum, exuding Vietnamese characteristics. In the new version, the packaging of Bia Viet looks more modern, and the taste is described as richer.
Heineken also conveys the message of responsible drinking, promoting low-alcohol or alcohol-free beer – products that Sabeco is also aiming for. The potential of the non-alcoholic beer segment was mentioned by Sabeco’s management at the Shareholders’ General Meeting in April 2023.
At this event, Sabeco also announced that, in addition to the mid-range consumer segment, they will attack the high-end segment. To achieve this, Sabeco may develop on its own or cooperate with other partners.
Furthermore, Sabeco plans to shift from on-premise consumption to off-premise sales. The Shopee channel of the company was launched in October 2023. Although only a small number of products were sold through e-commerce platforms in 2023, Sabeco hopes to achieve higher sales volume in 2024.
