Carlsberg, the Danish brewing company, is placing a strategic bet on China’s beer market, focusing on the premium segment to drive higher growth. With ambitious growth targets set for 2027, Carlsberg aims to increase its spending in key countries, particularly China, to capitalise on the potential of the world’s largest beer market.
Carlsberg’s new CEO, Jacob Aarup-Andersen, has reviewed the company’s strategy and set more ambitious goals, including higher marketing investments for its premium beer offerings. The company plans to push further into seltzers and cider while focusing on expanding its presence in China and Asia as a whole.
In China, the company aims to achieve growth through its portfolio of local, international, and ‘Beyond Beer’ brands. Carlsberg will focus on western parts of the country and major cities, aiming to strengthen its market share in existing urban areas and explore opportunities in recently entered and new cities.
While the consumer environment in China remains subdued, Carlsberg is betting on a rebound in the Chinese economy to drive volume growth. The company expects to expand its market share and grow volumes through strategic initiatives and route-to-market strategies.
Carlsberg plans to increase its sales and marketing investments by over 10% in 2024, with a focus on China, Vietnam, and India. In Vietnam, the company aims to accelerate momentum by increasing investments and focusing on key brands, regions, and capabilities. In India, Carlsberg intends to explore an acceleration plan when feasible.
Carlsberg’s strategic focus on China and its growth ambitions have been well-received by the market. The company’s shares rose by 5% following the announcement of its plans, indicating investor confidence in its strategy. However, some analysts have predicted organic operating profit growth of between 1% and 5% in 2024, which is below certain expectations.
RTM Watch’s Take
Carlsberg’s decision to bet on China’s expensive beer market aligns with its long-term growth objectives and the potential of the Chinese economy. While the current consumer environment may pose challenges, the company’s focus on premium offerings and strategic investments in key markets like China, Vietnam, and India demonstrate its commitment to driving growth. Carlsberg’s ability to navigate the competitive landscape and capture market share will be crucial for achieving its ambitious growth targets in the coming years.
