Carlsberg Malaysia recently released its 2023 Integrated Report combining the firm’s financial and non-financial business updates, updating on the progress and key focus areas of two of its major business development strategies namely the SAIL ’27 business plan and Together Towards Zero And Beyond (TTZAB) ESG plan.
Within the 242-page report, one of the major areas that was highlighted by Carlsberg Malaysia Managing Director Stefano Clini was the firm’s forward-looking focus on future-proofing the business from both technology and sustainability viewpoints.
“In 2023 we already completed one part of our brewery transformation project via the installation of a RM108mn (US$) state-of-the-art integrated and automated bottle filling line,” he said.
“This is in addition to the implementation of OnePlan, a software application to enhance supply chain planning and sales forecast capabilities with higher demand and supply efficiencies.
“Carlsberg Malaysia is the pilot brewery amongst the Carlsberg Group’s businesses globally to implement this [and] we undertook a 14-month change management exercise towards it – [but already] this digitalisation tool is showing numerous benefits, including time reduction in data analytics, improved insights, better data collection and enhanced risk management.
“This has all been part of the SAIL ’27 Our Execution Excellence theme, [and moving forward] in 2024 the brewery will be further supported with the installation of a new canning line and upgrade of filtration capabilities.
“We will continue to advance the next phases of our brewery transformation to future-proof product and packaging innovations [and] implement relevant and meaningful technology upgrades to be ahead in terms of digital adoption.”
SAIL ’27 is a five-year strategic corporate blueprint, and 2023 was the first year that Carlsberg Malaysia had been actively operating under this strategy. Another of the company’s major directives, portfolio premiumisation, also falls under this blueprint as part of a Step Up In Premium banner.
“Premium brands remain attractive and are key revenue growth drivers as consumers have become more discerning and alcohol beverages are getting more sophisticated,” he said.
“This initiative is our commitment to elevating consumer experience, leveraging the growth opportunities of the premium category across both the Malaysian and Singaporean markets.
“[Even though] both markets have been facing both headwinds and tailwinds in recent years, our premium brands – 1664, Connor’s Stout Porter and Somersby – recorded stable growth momentum [apart from] a 15% decline in 2023 due to softer consumer sentiment leading to lower consumption.
“Nevertheless, we continue investing in premiumisation [and] looking forward our strategy [will include] innovative marketing efforts combined with the introduction of new variants, sampling and collaboration initiatives [to] reinforce the position of these brands in the minds of consumers.
“So innovation, particularly in terms of variant expansion, is set to be a driving force for Somersby and 1664 - In the first half of 2024, we plan to launch new variants of the 1664 brand.”
ESG Efficiency
A great deal of focus was also centred around the firm’s ambitious TTZAB ESG strategy, which covers the six major goals of Zero Carbon Footprint, Zero Packaging Waste, Zero Farming Footprint, Zero Water Waste, Zero Irresponsible Drinking and Zero Accidents Culture by various individual deadlines of 2030 or 2040.
Given the ambitious nature of these targets, Carlsberg Malaysia has moved towards prioritisation of some of the most major material matters to solve practically in the short term.
“As part of our efforts to ensure that we are directing our resources efficiently and effectively to address business sustainability issues that are most material to us, we conducted a materiality validation exercise last year to refine our material matters, prioritising it to 19 from 27,” Clini said.
“With that prioritisation, we have identified and focused on top four matters that have the highest business impact and societal importance – Product Quality and Safety, Employee Safety, Health and Wellness, Talent and Talent Development and Threats to Commercial Freedom.
“This means taking steps such as ensuring the traceability, safety and quality consistency of our products through compliance with Food Safety standards and regulations as well as addressing potential threats in Malaysia arising from illicit trade of alcoholic products.
“The longer-term targets still stand such as zero carbon emissions at our breweries and a 30% reduction of our beer-in-hand footprint by 2030 [and] going beyond by working towards net zero carbon emissions across our entire value chain by 2040.”