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Strategies

Growth

Efficient growth is key for business expansion and for yielding sustainable returns to stakeholders. ThaiBev is Southeast Asia’s biggest beverage company, and we maintain our leadership position by placing a strong focus on developing innovative products, diversifying our portfolio, leveraging our efficient distribution network in core markets, and expanding our business in Southeast Asia. We have strengthened our foundation for future sustainable growth through our collaborations with Fraser and Neave, Limited (“F&N”), Singapore’s leading beverage producer and distributor, as well as publisher; Myanmar Supply Chain and Marketing Services Co., Ltd. and Myanmar Distillery Co., Ltd. (“Grand Royal Group”), the biggest player in Myanmar’s whisky market; and Saigon Beer - Alcohol – Beverage Corporation (“Sabeco”), Vietnam’s biggest beer producer and distributor. In 2019, F&N opened Emerald Brewery in Yangon, Myanmar, to brew and market Chang beer. The expansion of our operations in Southeast Asia marks another milestone for us in strengthening ThaiBev’s position as the leading regional beverage producer and laying the foundation for our sustainable growth in the future.

Diversity

Attaining business sustainability from diversified revenue streams is core to our plan. This involves increasing income contribution from our non-alcoholic beverage segment and overseas sales. Our expansion into the non-alcoholic beverage market is an important part of our strategy to become the leading total beverage producer and distributor in the region. We focus on offering a more diversified product portfolio and optimizing our distribution network. ThaiBev’s expansion into the non-alcoholic beverage segment commenced with the acquisition of Oishi Group Public Company Limited (“Oishi”) – the No. 1 green tea beverage producer in Thailand – in 2008. Thereafter, we acquired Sermsuk Public Company Limited (“Sermsuk”) – the beverage producer with the most extensive distribution network in Thailand – in 2011, and F&N in 2012. We have also continued to further expand our food business beyond Oishi’s Japanese restaurants by establishing Food of Asia Co., Ltd. (“Food of Asia”) in 2015 and acquiring assets fromYum Restaurants International (Thailand) Co., Ltd.– the operator of KFC’s business in Thailand – in 2017 to fully expand into the food business segment. In 2019, we started recognizing profits from Starbucks Coffee (Thailand) Co., Ltd., which operates Starbucks stores in Thailand.

As part of our Vision 2020 strategic road map, we are diversifying our revenue streams and pursuing overseas expansion, especially in ASEAN countries, which we view as high-growth primary markets. Purchasing power in these markets, which have a total population and tourist count numbering over 700 million, is increasing amid the growth of their economies and the rise in the number of tourists visiting ASEAN countries. In addition, we are looking at collaboration opportunities with the 10 ASEAN countries plus China, Japan, South Korea, Australia, New Zealand, and India (or ASEAN +6), which altogether account for more than half the world’s population. This will expand a capabilities in investment and trading, and provide the potential to compete with other regions.

The first step to our success in Southeast Asia was the acquisition of F&N in 2012. In 2017, we acquired a 75% stake in the biggest player in Myanmar’s whisky market, Grand Royal Group, which has production facilities in Yangon and Mandalay. That same year, we also won the bid for 53.59% of the shares in Vietnam’s biggest beer producer and distributor, Sabeco, which is best known for its Saigon Beer. These acquisitions have bolstered our efforts to expand into international markets and driven ThaiBev to attain the leading position in Southeast Asia.

Brands

In 2014, we re-organized ThaiBev’s management structure and streamlined our core businesses into product groups – spirits, beer, and non-alcoholic beverage. We also identified the core products of each business, namely “Ruang Khao”, “Hong Thong”, “BLEND 285”, “Chang” beer, “Oishi” green tea, “est” soft drinks, and “100PLUS”.

We continue to focus on improving our brands through product innovation and the introduction of more modern packaging in line with our premiumization strategy. Our efforts in the spirits product group have been focused on the development of “Ruang Khao”, the No. 1 brand in the white spirits category, through the launch of “Ruang Khao Silver” with a modern image and new packaging. This helped to enhance the brand image of Ruang Khao, Thailand’s first spirits brand, in order to build a premium white spirits market and penetrate the Southeast Asian market. We also revamped the packaging of our “BLEND 285” and “BLEND 285 Signature” products in the brown spirits segment, enhancing their image in line with that of premium international spirits. In addition, we have further extended ThaiBev’s portfolio in the premium market by positioning our Scotch whiskies such as “Old Pulteney” and “anCnoc”, as well as our “Caorunn” gin in luxury hotels and restaurants in Thailand since 2015.

In November 2018, Grand Royal Group launched “MacArthur’s Blended Scotch Whisky”, the first Scotch whisky to be imported from Scotland and bottled in Myanmar.

In 2019, ThaiBev added another distinctive feature to “Ruang Khao” white spirits – new bottles with the embossed “Ruang Khao” name – to give the product a unique look.

As for brown spirits, we launched “Hong Thong 1 Liter”, bolstering its status as one of the top-of-mind brown spirits brands. We also launched “Kulov Lemon Pop”, a new flavor of ready-to-drink vodka in a can, while expanding our vodka presence with “Kulov Vodka”– an Inver House brand made in Thailand. In addition, ThaiBev launched herbal spirits “Phayanak” to cater to consumers who prefer the taste of spirit mixed with traditional Thai herbs.

In addition to “Chang” beer – a flagship product of our beer business which has been imprinted in the minds of consumers for over two decades – ThaiBev now also has a wide range of other beer products for different occasions. These include “Federbräu”, a premium beer made of German single malt; “Archa”, a value-for-money beer; “Tapper Original X-Tra”, a lager beer with high alcohol content in modern packaging targeting younger generations who prefer strong beer; as well as “Huntsman” and “Black Dragon” craft beers for younger generations who seek unique products.

Following this year, Chang approaches its 25th anniversary and we celebrated this occasion with the launch of “Chang 25th Anniversary Cold Brew Lager”. The 100% malt beer is produced using an innovative sub-zero filtration method to fully bring out the taste and aroma of the malt. In 2019, Sabeco, the biggest beer producer in Vietnam, relaunched “Bia Saigon” and unveiled a new look for the beer, modernizing its image and reflecting its position as the leading brand in the hearts and minds of the Vietnamese people.

To further realize our potential and secure our market leadership position in the non-alcoholic beverage segment, we constantly introduce innovative and healthy products that are suitable for all moments in everyday life to cater to different tastes and preferences of consumers of all ages. In 2019, we launched “Oishi Apple Honey” green tea, which is infused with the flavor and aroma of Aomori apple and Hyakkamitsu honey from Japan, along with “Oishi Apple Honey Light”, its zero-calorie and sugar-free variant. For “est”, we launched “est Play Honey Lemon” to boost our product offering in the carbonated soft drink (“CSD”) market. We have also increased the production capacity for “Crystal” drinking water, which received a standard certification for drinking water from NSF International in the United States.

Reach

Our robust and extensive distribution network is one of our major strengths and a key factor that has elevated ThaiBev to its leadership position in Thailand’s beverage market. We currently have more than 7,000 delivery trucks that reach over 400,000 outlets across the country, as well as long-standing relationships with agents, distributors and restaurants. We have also established over 1,100 direct sales teams to provide sales services and manage the visibility of our products on store shelves.

We reinforced our domestic distribution network by establishing Modern Trade Management Co., Ltd. to distribute ThaiBev’s alcoholic and non-alcoholic beverages to modern trade operators. We also founded HORECA Management Co., Ltd. to close gaps in our distribution channels to luxury hotels and restaurants. This will provide us with the benefits of complete coverage of the segment and will allow us to introduce our overseas premium products to the upmarket on-premise segment in Thailand. In addition, we established Cash Van Management Co., Ltd. to manage our direct sales teams, which support around 270,000 retailers across Thailand. As for our non-alcoholic beverage business group, we have expanded our route-to-market channels and further developed Sermsuk’s non-alcoholic beverage business. As a result, we now have business units that manage five distribution channels in total – namely, traditional trade, modern trade, cash vans, HORECA and Sermsuk.

Besides enhancing ThaiBev’s own distribution network, we also always seek opportunities to collaborate with business alliances in each Asian market. In 2018, we incorporated two joint venture companies – Asiaeuro International Beverage (Hong Kong) Limited and Asiaeuro International Beverage (Guangdong) Co., Ltd. to engage in the importation, sales and distribution of premium international wines and spirits in Greater China to create more opportunities for selling malt scotch whiskys in duty free shops.

To manage our entire distribution and logistics system, which is the backbone of our company, we set up Thai Beverage Logistics Co., Ltd. (“TBL”). Since its establishment, TBL has created strategic hub–and-spoke networks in each region, set up distribution centers in the Nakhon Ratchasima and Surat Thani provinces, and opened a new distribution center in Lampang province, which serves as the distribution base in Thailand’s northern region. As a result, ThaiBev currently has three regional distribution centers, two provincial distribution centers (in Phra Nakhon Si Ayutthaya and Kamphaeng Phet), 15 sub-distribution centers, and 1,380 trucks. We are in the midst of planning to transform all our regional distribution centers into smart centers by using technology to automate all operations and applying Big Data technology to connect all centers, and also intend to set up 18 highly efficient distribution centers to replace all of our 55 existing warehouses.

To facilitate the expansion of our food business, we acquired a stake in cold chain logistics and distribution expert, Havi Logistics (Thailand) Co., Ltd., in 2018. Its expertise in the field ensures that our products are maintained at the proper temperature when they are being transported from factories to consumers, and can also provide such services for clients in the restaurant business in Thailand.

Professionalism

Our people are key to our drive towards realizing Vision 2020. ThaiBev Group currently has more than 60,000 employees, over half of which are from Generation Y. The key to our organization’s success is therefore increasing the potential of these digital era staff. As a leading company in the region, we have set up our “Beverest” platform to promote synergy and connection between the staff in our group. This platform encourages greater collaboration between us and our employees, as well as among employees under both our domestic and international businesses.

We have made a concerted effort to focus on developing our workforce. We provide opportunities for all staff to sharpen their work-related skills and capabilities through various learning and development processes designed for each product group. A key objective of these processes is the development of our employees’ managerial competencies, functional competencies and leadership qualities. We have also established a Transformation Program to help shape their mindset and attitude to better embrace future change. Other initiatives that we have introduced to help our employees realize their full potential include scholarships for Master’s and Ph.D. programs in English at leading universities in Thailand and abroad, as well as leadership development programs to hone their leadership qualities and prepare them for higher leadership positions in the future.

ThaiBev currently has a presence in Singapore, Malaysia, Myanmar and Vietnam, and this regional network presents our staff with a number of opportunities to relocate. Our Office of Human Capital has organized “ASEAN Ready” programs in Myanmar and Vietnam. These programs consist of short training courses for our staff to learn more about the various countries, in areas such as languages, cultures and politics to help them adjust to life abroad. We have also set up a “Mobility Team” to support these employees through the whole process, from the preparation before the relocation to the time when they are working abroad. The team also actively discusses relocated employees’ career paths with their respective business units to ensure their long-term career growth.

During the year, ThaiBev has placed emphasis on creating a culture of collaboration under the “ThaiBev Global Values”. We developed a “Thank You System” application that serves as a platform to foster a culture that “appreciates and supports fellow employees whose dedication goes beyond their job roles”. Employees can award points to thank other employees and units whom they have worked with, and this in turn creates beneficial results for our business.

We are determined to continuously manage and develop the potential of our staff to build strong and highly efficient teams. Our focus on human capital management and development is in line with our “Limitless Opportunities” goal, which aims to provide employees with opportunities for career growth, relationship building, and to contribute to society at the national and regional levels. This commitment has been formally recognized on an international level – we won the “Asia’s Top Employer Brands” from 2019 Asia CEO Summit & Influential Brands Awards Ceremony and the “Best Companies to Work for in Asia 2019” award from HR Asia magazine, which analyzed different organizational cultures at the international level.