Carlsberg Malaysia recently announced its FY2023 full-year financial results, reporting a decrease of -6.3% in revenue to RM2.26bn (US$474.1mn) and a rise of 5.1% in net profits to RM333.2mn (US$69.9mn).
The drop in revenue was attributed to both the shorter timing of Chinese New Year in 2023, which is generally considered by Carlsberg to be one of its most profitable periods, whereas the increased profits were attributed to the removal of the Prosperity Tax that had to be paid back in 2022.
Significantly though, the firm’s Managing Director Stefano Clini highlighted that Malaysia and Singapore in general are seeing consumers looking more to tighten their pursestrings, leading to less discretionary spending which has had impacts on the beer category.
“This weaker consumer sentiment has led to a softer market and consumption slowdown, and this has been reflected in the sales of beer,” Clini told the floor during a recent press event announcing the financial results.
“Our premium products saw a -15% decline in sales, whereas mainstream items saw -8% decline – this is indicative of consumers looking for ways to pinch their pennies, hence choosing to make more affordable purchasing decisions.
“That said, we are standing firm with our premium products strategy, and are even looking to step up our investment in this sector – this has included a brand new packaging design for our entire Kronenbourg 1664 range, our new partnership with Sapporo, as well as the launch of the Brooklyn Pilsner in Singapore.
“One of the most recent activations has been the limited edition 1664 PRESTIGE which is packaged in a champagne bottle, and is a packaging we designed to really embody lifestyle and luxury.”
One other area that has seen a dip in the past year has been e-commerce, which experienced a slowdown after COVID-19.
“There can be no doubt that there has been a decline in e-commerce sales in general, particularly in Malaysia,” Clini said.
“There was a big difference compared to the e-commerce performance during the pandemic, and this is likely due to consumers having gone back to brick-and-mortar retail for their shopping.
“That said, Carlsberg has managed to retain top five spots on major e-commerce platforms in both Singapore in Malaysia – for instance, we were the second best-selling brand on Lazada Singapore for its 12.12 sales, and the fourth best-selling brand on Shopee Malaysia for its 10.10 sales.
“As such, we will continue our momentum in these markets and continue to invest further in digital online sales.”
Alcohol-free and canning developments
The firm also has plans to further strengthen its alcohol-free offerings after seeing a 2% sales increase in this category following the launch of its Somersby Apple 0.0 in Singapore as well as its CNY limited edition Somersby Mandarin Orange 0.0 in the last quarter of the year.
This is in addition to another RM92mn (US$19.3mn) worth of investments planned for CAPEX upgrades in the coming year.
“Carlsberg has allocated RM92mn in CAPEX for the development of a new canning line and beer filtration plant in our Shah Alam facility, to be completed in 2024,” Clini added.
“This will allow for higher production flexibility, lower energy consumption and lower water consumption, all in line with our ESG strategy Roadmap to Net Zero.
“This is in addition to the previous RM108mn (US$41.5mn) brewery upgrade, which has already seen benefits such as higher quality products, capacity improvement and the reduction of our environmental footprint.”
