Asahi Group Holdings Ltd. will ramp up sales of its top-selling Super Dry beer in Europe with local production aided by faster integration of last year’s $11 billion purchase of brands from Anheuser-Busch InBev NV.
Japan’s largest brewer will produce Super Dry in Padua, Italy, starting this month and sell the premium brand in Italy and the U.K. by January, President Akiyoshi Koji said in an interview on Thursday. Koji had previously expected sales to begin in 2019.
Asahi sees overseas sales of Super Dry in Europe and other markets outside of China, Hong Kong and the U.S. almost doubling to 11 million cases within five years on distribution efficiencies. Koji said the brewer is also hoping to use its Super Dry brand to build a stronger presence in the U.S. as it seeks ways of expanding its sales channels there.
Asahi is reaping benefits after strengthening its foothold in the European beer market with last year’s purchase of brands that catapulted it to be among the four biggest brewers on the continent. The Japanese company has been stepping up expansion overseas as demand at home wanes and local competition with rivals like Kirin Holdings Co. intensifies.
The Padua factory that is producing Super Dry is part of the European assets acquired last year.
“I tried the beer there before production began, and the taste was the same as in Japan,” Koji, 65, said at the brewer’s headquarters in Tokyo.
The company is targeting 35 percent to 36 percent of its total operating profit to come from overseas within five to six years, up from a forecast of 31 percent for 2017. In August, Asahi raised its full-year profit forecast by 15 percent based on contributions from its European acquisitions as well as better-than-expected performance in its soft drinks and food businesses.
Asahi’s goals for Europe are ambitious and the U.K. presents the biggest opportunity for Super Dry, said Euan McLeish, a Bernstein & Co. analyst in Hong Kong. “Asahi has set some extremely bold growth targets for the European business,” he said. “Producing Super Dry in Italy is a small step in the right direction.”
Buying into Europe is part of Asahi’s plan to become a global premium beer company alongside Heineken NV and Anheuser-Busch InBev. Asahi in March completed the purchase of the beer business previously owned by SABMiller, including the popular Czech beer Pilsner Urquell. Last year, Asahi closed on a deal to buy Peroni Nastro Azzurro and other beer brands from Anheuser-Busch InBev, which took over SABMiller.
Koji said Asahi would start selling Pilsner Urquell and Peroni in Japan next year.
Asahi’s Super Dry, Japan’s first dry draft beer, was unveiled in 1987 and sold 200,000 cases in the first two weeks. In 1997, the brew was introduced in 12 European countries via imports.
Although Asahi has little presence in the U.S., Koji said he would like to find new outlets to sell Super Dry in the world’s largest economy besides Japanese restaurants, where the beer is most commonly proffered. Koji said he wants to focus on Asahi’s own premium brand rather than craft beer in the U.S. He added he believes there is room in the global market for the taste of Japanese beer.
“Growing Super Dry has the highest priority in North America for us,” Koji said.
Meanwhile, its rivals have been busy making deals in craft brews. Sapporo Holdings Ltd. agreed earlier this year to acquire Anchor Brewing Co., a century-old San Francisco brewer that helped pioneer the craft-beer movement. Kirin, Japan’s second-biggest brewer, acquired about 25 percent of closely held Brooklyn Brewery for an undisclosed sum last year.
Asahi has been shedding some assets to pay for its acquisitions. In June, the Japanese company said it’s selling its remaining stake in a joint venture with Tianjin-based Tingyi Cayman Islands Holding Corp. Asahi also hired Morgan Stanley to advise on the potential sale of its 20 percent holding in Tsingtao Brewery Co. Koji reiterated the company will decide what to do about the stake by the end of this year.
IN FIVE EASY PIECES WITH TAKE 5