Czech Republic Beer Per Capita Consumption - SABMiller
Czech Republic Beer Per Capita Consumption - SABMiller
Czech Republic Beer Per Capita Consumption - SABMiller
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<strong>Czech</strong> <strong>Republic</strong><br />
“Building value”<br />
Tony van Kralingen<br />
March 2000<br />
Plzensky Prazdroj AS<br />
1<br />
<strong>Beer</strong> <strong>Per</strong> <strong>Capita</strong> <strong>Consumption</strong><br />
166.8<br />
161.1<br />
159.1 160.0<br />
161.6<br />
160.1 159.6<br />
153.6<br />
155.3<br />
1991 1992 1993 1994 1995 1996 1997 1998 1999<br />
High and stable<br />
Litres per capita per annum<br />
2
<strong>Beer</strong> Share of Total <strong>Consumption</strong> of<br />
Alcoholic Drinks<br />
Spirits<br />
28 25 32<br />
32<br />
<strong>Beer</strong><br />
62<br />
63<br />
56 56<br />
Wine<br />
10 12 12 12<br />
1992 1994 1996 1998<br />
High and stable<br />
% Absolute alcohol per capita per annum<br />
3<br />
<strong>Beer</strong> Prices Relative to other<br />
Countries are Low<br />
<strong>Czech</strong> <strong>Republic</strong><br />
0.43<br />
Eastern Europe:<br />
Hungary<br />
Romania<br />
0.72<br />
0.78<br />
Poland<br />
1.34<br />
Western Europe:<br />
Belgium<br />
0.7<br />
Spain<br />
1.07<br />
Germany<br />
1<br />
France<br />
1.41<br />
Presenting an opportunity to build value<br />
Average retail beer price comparison US$/l<br />
4
<strong>Beer</strong> Affordability Relative to Other<br />
Beverages is High<br />
<strong>Beer</strong> 0.5l<br />
42<br />
Wine 0.2l<br />
20<br />
Vodka 0.5l<br />
31<br />
Soft drinks 0.5l<br />
42<br />
Presenting an opportunity to build value<br />
Units of products affordable for 1 day’s work<br />
5<br />
Segmentation on Price<br />
Segment Size %<br />
Relative price<br />
Super Premium 4.5 153%<br />
Premium 6.0 133%<br />
Standard 29.9 100%<br />
Popular 49.3 73%<br />
Discount 10.2 40%<br />
6
But There is Surplus Capacity<br />
24<br />
23<br />
Million hlh<br />
22<br />
21<br />
20<br />
19<br />
18<br />
17<br />
16<br />
15<br />
1990 1991 1992 1993 1994 1995 1996 1997 1998<br />
Capacity<br />
Production<br />
7<br />
Retailing is Consolidating<br />
Year<br />
Key account sales hl’sh<br />
1997 920 302<br />
1998 1 740 693<br />
1999 2 073 664<br />
Doubled in volume in five years<br />
8
<strong>Beer</strong> is Clearly a Male Product<br />
13<br />
87<br />
Female<br />
Male<br />
Share of consumption by sex<br />
9<br />
Share of <strong>Consumption</strong> by Age<br />
3.5<br />
3<br />
2.5<br />
2<br />
1.5<br />
1<br />
0.5<br />
0<br />
Total 18-24 25-34 35-44 45-54 55-65<br />
35 - 44 year olds consume the most<br />
10
7%<br />
11%<br />
Branded <strong>Beer</strong>s have 52% Volume<br />
Share<br />
10%<br />
6% 4%<br />
Kozel<br />
20% Radegast<br />
Pilsen<br />
42%<br />
Krusovice<br />
Starobmo<br />
Bass<br />
Budvar<br />
Plzensky Prazdroj has 44% market share but 66% share of<br />
branded segment<br />
11<br />
Value Share Significantly Higher than<br />
Volume Share<br />
Volume Share<br />
Value<br />
Plzensky Prazdroj<br />
Prazske Pivovary<br />
Krusovice<br />
Budvar<br />
Starobrno<br />
Jihoceske<br />
Other<br />
1.4 %<br />
3.7 %<br />
4 %<br />
3 %<br />
3.2 %<br />
2.5 %<br />
5.3 %<br />
4 %<br />
16.6 %<br />
15.5 %<br />
21.5 %<br />
24.9 %<br />
44,9 %<br />
49,5 %<br />
12
Our Brands Dominate Consumer<br />
Preferences Nationally<br />
Pilsner Urquell 74.3%<br />
Gambrinus 84.8%<br />
Plzen<br />
PRAGUE<br />
Gambrinus 72.6%<br />
Pilsner Urquell 60.4%<br />
Radegast 89.3%<br />
Budvar 78.9%<br />
Radegast 61.4%<br />
13<br />
Our Brands also Dominate<br />
Awareness / Affinity<br />
Top of Second Other Prompted Last<br />
mind brand spontaneous awareness bought<br />
mention mentioned<br />
1. Gambrinus<br />
Pilsner<br />
Pilsner<br />
Pilsner<br />
Gambrinus<br />
Urquell<br />
Urquell<br />
Urquell<br />
2. Pilsner Urquell<br />
Kozel<br />
Kozel<br />
Kozel<br />
Radegast<br />
3. Budvar<br />
Krusovice<br />
Gambrinus<br />
Gambrinus<br />
Budvar<br />
4. Radegast<br />
Budvar /<br />
Budvar /<br />
Budvar /<br />
Pilsner<br />
Radegast<br />
Radegast<br />
Krusovice<br />
Urquell<br />
14
Exploiting the Opportunity<br />
1. Merging the company<br />
2. Creating synergies<br />
3. Optimising the brand portfolio<br />
15<br />
1. Merging the Company<br />
✦ Standardised trading terms<br />
✦ Consolidate procurement<br />
The benefits<br />
✦ Create single finance department<br />
! Shared services centre<br />
! SAB management accounting<br />
! Common performance measures<br />
! Simplified administration processes<br />
! Create common IT infrastructure<br />
16
2. Creating Synergies<br />
✦ Production optimisation<br />
! Brewing and packaging closer to the market<br />
! Standardising and optimising efficiency<br />
✦ Distribution as a competitive advantage<br />
! Grow regional into national brands<br />
! Increased cases per drop delivers improved efficiency<br />
! Freight savings through interdepot - brewery logistics<br />
17<br />
Optimise Production Capacity<br />
and Utilisation<br />
Pilsner Urquell<br />
5.5m hlh<br />
Capacity<br />
Utilisation 87%<br />
Plzen<br />
PRAGUE<br />
Velke Popovice<br />
Brewery 0.9m hlh<br />
Capacity<br />
Utilisation 67%<br />
OSTRAVA<br />
Radegast Brewery<br />
2.4m hl. h<br />
Capacity<br />
Utilisation 96%<br />
18
Exploit National Distribution<br />
GERMANY<br />
Karlovy<br />
Vary<br />
Plzen<br />
Teplice<br />
PRAGUE<br />
Turnov<br />
Hradec<br />
Kralove<br />
POLAND<br />
OSTRAVA<br />
Olomouc<br />
GERMANY<br />
Domazlice<br />
Distribution Centres<br />
Ceske Budejovice<br />
AUSTRIA<br />
Jihlava<br />
BRNO<br />
Zlín<br />
SLOVAKIA<br />
19<br />
National Availability<br />
70<br />
50<br />
35<br />
40<br />
25<br />
Pilsner<br />
Urquell<br />
Group<br />
Average weighted distribution<br />
Bass<br />
Krusovice<br />
Budvar<br />
South<br />
Bohemian<br />
20
Optimise and Build Brand Portfolio<br />
Creating sustainable value<br />
Super<br />
premium<br />
Premium<br />
Standard<br />
Pilsner<br />
Urquell<br />
Radegast<br />
Gambrinus<br />
Kozel<br />
- Reinforce stature<br />
- Differentiate positioning<br />
- Develop underlying potential<br />
Popular<br />
Primus\<br />
Klasik<br />
- Rationalise and lift price<br />
21<br />
Conclusion<br />
Improved shareholder value will be achieved through<br />
✦ The merger of three companies together with implementation of<br />
standardised best operating practices will reduce the overall<br />
cost base<br />
✦ Driving synergies through national production and distribution<br />
✦ Managing the market for value rather than volume<br />
22
Q and A<br />
23
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