Asahi’s Premiumization Strategy Remains Intact Over the Long Run; Inflation Impacts to Cycle Soon

Asahi is pinning its hopes on premiumization and global expansion to reinvigorate growth. The acquisition of SABMiller’s brands in Europe is a key stepping-stone to establishing its presence in the global premium beer market. Concurrently, the group intends to enhance profitability by rationalizing cost structure through supply chain optimization. Management has a proven record of cost-cutting. Whether it can continue a mid- to high-single-digit profit growth rate will depend on continued expansion of the premium offerings amid difficult economic conditions and the commodity prices of the key input. Unlike rival Kirin, which is looking for new revenue sources outside the shrinking beer market, Asahi is determined to stick to its core business. Asahi is targeting opportunities in the premium beer category not only because of the ongoing premiumization trend globally, but also because the strategic direction bodes well for its strengths in Asahi Super Dry, the number-one beer brand in Japan.