IF a combination of Anheuser Busch InBev and SABMiller could prompt the mega-brewer to focus on its bigger brands and see a massive worldwide distribution, then it should also be the case for Malaysian-listed Guinness Anchor Bhd (GAB), whose major shareholder now is the second largest beer group in the world by volume, Heineken NV.
With GAB changing its name to Heineken Malaysia Bhd come April 20 upon shareholders’ approval, GAB managing director Hans Essaadi assures that the brewery will maintain its leading market position as a premium drinks company even with the change in shareholding.
Dutch brewer Heineken NV now controls GAB after it acquired 100% stake in GAPL Pte Ltd last October from Diageo Plc. GAPL held 51% interest in GAB.
Market observers fear the leading local brewery will not be making better profit margins this year amidst the soft consumer sentiment. GAB’s profit margins narrowed in 2015 after the goods and services tax kicked in last April. In FY14, its net profit and revenue dipped for the first time after 12 years.
No doubt with a higher inflation rate expected in the second half of the year, Essaadi says that with the strong brand presence and a wider distribution network after Heineken’s takeover, it will perhaps see better profit growth this year.
“With the long-term agreement with Diego Plc, we will continue to carry Guinness as a key brand.
“Also Heineken NV has more than 250 best-selling brands around the world and we are open to these brand portfolios now,” says Essaadi in an interview recently, adding that with the additional brands coming in and Heineken’s name, it can increase its market share.
As GAB celebrates its 50th anniversary this year, Essaadi believes its experience in brewing with good brands will give the company the competitive edge.
“It’s just a corporate brand change, but it’s business as usual for us and we are consumer-inspired, customer-oriented and brand-led.
“We lead in the premium category and Heineken is the No. 1 international premium brand,” he says.
Also, with world-class marketing strategies and execution, he says GAB has the proven ability in capturing the imagination of consumers and has been prioritising innovation to meet the changing consumer needs.
“Malaysian consumers are becoming more discerning, developing a taste for more cosmopolitan offerings and a preference for exciting experiences,” explains Essaadi, adding that it had launched four new variants in the past nine months, including Tiger White, Smirnoff Ice Black, Tiger Radler Mandarin Orange and Strongbow Red Berries. Apart from these, a new limited edition packaging Heikenen Spectre was also introduced last year.
In terms of cost-saving measures, since GAB is now part of Heineken’s global supply chain, it will enjoy huge cost-savings through strategic procurement that will improve its efficiency, he notes, adding that being part of Heineken’s “Brewing a Better World” initiative is also towards building a sustainable future and growth, says the Dutch.
Despite GAB’s subdued performance last year, Essaadi says the company achieved strong results in reducing consumption of water by 19.2%, thermal energy 9.6% and electricity 6.2%.
Essaadi aims for the brewery to continue operating at optimum levels with minimal wastage of resources.
Notwithstanding, GAB has always believed in people being the core of its business.
“People are the lifeblood of our business and our people-focused culture is built on strategic areas of focus that help shape and develop our most valuable asset.
“Our employees have a passion for quality that is unmatched, enabling the company to grow in the right direction,” he says.