Qingdao Beer'S Total Sales Volume Fell 3% Last Year, And Its Net Profit And Gross Profit Margin Reached A New Level

The beer industry's third report card is out. According to the 2020 annual report of Tsingtao Brewery (600600. SH), as the company with the highest brand value in China's beer industry, was affected by the epidemic last year. Although the sales volume of the main brand of Tsingtao Beer decreased by 4% year on year, the company achieved the highest profit level in history by reducing costs, optimizing product structure and raising prices, and pushed the gross profit rate to a new level.

According to the annual report, the overall beer sales volume of Qingdao beer was 7.82 million kiloliters, down nearly 3% year on year. However, the company achieved a net profit of 2.2 billion yuan, an increase of 18% year on year. The gross profit rate of Qingdao beer increased from 38.9% in 2019 to 40.61%. This is the first time that Tsingtao beer has broken through the net profit barrier of 2 billion yuan and has entered the profit space with higher gross profit rate for the first time.

At present, there are also Budweiser Asia Pacific (01876. HK), China Resources beer, Chongqing beer, Zhujiang Beer and Yanjing beer which can achieve more than 40% gross profit margin in the domestic beer market.

In an interview with the 21st century economic reporter on March 30, the responsible person of Tsingtao Beer held that although the sales volume of the beer industry decreased year on year due to the epidemic situation last year, the bipolar phenomenon of high-end consumption and popularization has become increasingly obvious. In his opinion, the price increase of high-end products and the price of low-end products of beer are more user-friendly, which will better meet the needs of consumers.

Although Tsingtao beer has not disclosed too much about the changes of product structure, it has shown obvious performance in Zhujiang Beer (002461. SZ), which has published its annual report. Last year, the revenue growth rate of popular beer with retail price of 3 yuan was as high as 16%, and that of high-end products with retail price of more than 6 yuan increased by 7%. However, the medium-sized liquor with retail price of 4-5 yuan fell more than double-digit year-on-year.

Profitability of sales decline

Last year, the whole industry was affected by the new crown pneumonia epidemic. According to the data of the National Bureau of statistics, the domestic beer industry achieved a total of 34.11 million kiloliters of beer, down 7% year on year (statistical caliber: all industrial legal entities with annual main business income of more than 20 million yuan).

Qingdao beer is not immune. According to the annual report, the overall sales volume of Qingdao beer was 7.82 million kiloliters, down 2.8% year on year. As early as 2018 and 2019, the total sales of Qingdao beer exceeded 8 million kiloliters. Last year, the company's design capacity was 13.49 million kiloliters, with a capacity utilization rate of 69%.

Among them, Tsingtao beer brand is the one with a large decline in sales. Last year, Tsingtao Beer fell 4 million kiloliters, down 4% year on year. In Qingdao beer, the sales of high-end brands such as 1903, Chunsheng, ogut and Hongyun were 1.79 million kiloliters, down 4%.

The person in charge of Tsingtao Beer explained to the reporter of the 21st century economic report that the catering channel was the most affected by the epidemic last year, and this is the main market for classic Tsingtao beer. With the gradual remission of the epidemic situation in April and may last year, it was the roadside restaurants that took the lead to recover, and the popular beer consumption recovered, but the recovery of medium and high-end brands and high-end Tsingtao Beer lagged behind.

In the face of the decline in sales, Tsingtao beer has carried out cost control.

The annual report shows that last year, the revenue of Tsingtao Beer reached 27.7 billion yuan, down 0.8% year on year, but the operating cost was 16.5 billion yuan, down 3% year on year. In the "three fees", the company's sales expenses were less than 5 billion yuan, a year-on-year decrease of 2%, and the management expenses of 1.67 billion yuan, a year-on-year decrease of 10%. The main reason is that due to the impact of the new epidemic, the government reduced the social insurance expenses and the transportation expenses of products. According to insiders of Tsingtao beer, under the influence of the epidemic, the sports events sponsored by the company were basically not carried out last year, and the scale and promotion expenses of participating in the Qingdao Beer Festival were also limited.

The cost is down year on year, but the product structure is improving.

Last year, Tsingtao Brewery developed and launched ultra-high-end new products such as art beer and amber rag, taking the lead in opening the super high-end market in domestic beer.

Under the factors of product structure optimization and price increase, the profitability of Qingdao beer has changed greatly, especially the gross profit margin of East China and Southeast China increased by 5.4 percentage points year on year.

According to the annual report, the net profit of Shandong, the base of Qingdao beer, dropped from 1.4 billion yuan in 2019 to less than 1.3 billion yuan last year. However, the profitability of North China, East China and Southeast China has been greatly improved, and the losses have been reduced rapidly, from 500 million yuan in 2019 to 700 million yuan, about 300 million yuan to 30 million yuan, 88 million yuan to 4.5 million yuan.

Last year, Tsingtao Brewery achieved 27.3 billion yuan in beer sales. The company's revenue per ton of liquor was 3491 yuan / kiloliter, and the gross profit rate of beer exceeded 40% for the first time, reaching 40.61%. At present, Budweiser Asia Pacific still has the highest gross profit margin in the domestic beer industry. Although the consumption in the evening was severely depressed by the epidemic last year, the company still maintained a high gross profit rate of 52% throughout the year.

The product structure will be further optimized

"Last year, the company's profitability index hit the best level in history, and we feel that the beer industry is starting to climb." The responsible person of Tsingtao Beer told the 21st century economic report that the trend of high-end beer was obvious even during the epidemic period. He even saw signs that super high-end beer would develop towards luxury goods in the future.

During the Spring Festival last year, the company innovated and upgraded the packaging of the 100 year journey art beer priced at more than 200 yuan a bottle, and launched a limited edition of the year of the ox. To his surprise, Qingdao beer was fried to more than 600 yuan. On March 30, the 21st century economic report reporter saw in the official flagship store of Tsingtao beer on jingdong.com that the single bottle price of the red marked art beer of the year of the ox was as high as 699 yuan, and the price of a single bottle gift box for a 100 year journey had risen to 388 yuan.

"During the epidemic period, the sales of our super high-end products did not decline, but showed an increasing trend, but the output was very small." The person in charge said that it was seeing a strong demand for high-end consumption that Tsingtao beer would focus on the main brands, cut down some low gross margin Tsingtao beer products, and move the overall price up to compete with Budweiser brand. At present, the retail price of the classic Tsing beer is about 8 yuan, the price of 1903 is 8-10 yuan, the price of pure raw beer is 10-12 yuan, the price of ogut is 12-15 yuan, and the price of amber rag is about 30 yuan.

"When there are thousands of yuan a bottle in the beer industry, it already has the luxury attribute." Sooner or later, he said, such products will appear.

What can not be ignored is that an epidemic has brought about economic downturn in most industries. Last year, mass consumption grew rapidly. According to the strategy of Tsingtao beer, Laoshan brand with a market price of 4-6 yuan will meet the consumption demand of this group of people, so as to completely distinguish it from Tsingtao beer in terms of positioning.

According to the annual report of Tsingtao Brewery, the company will continue to deepen the implementation of the brand strategy of "Qingdao beer main brand + Laoshan beer second brand", promote innovation driven and product structure optimization and upgrading. It has set up more than 200 "tsingtao1903 Tsingtao Beer Bar" throughout the country, constantly meeting the multi-level needs of consumers such as personalization, scene, convenience and high-end.