Management Strategy:
Alcohol Beverages Business2023 Review and Future Direction
March 19, 2024
Asahi Breweries, Ltd.

Asahi Breweries, the Value-seeking Firm
Economic stagnation(3 lost decades)C O VI D -1 9 p a n d em i c

Economic growth
period (bubble)

Shrinking market, hobbies
become more diverse
and individual

Uncertain times (VUCA)
100-year lifespan, changing lifestyles

Create new markets
through innovation

Launched
Super Dry

1980

New value:
Fresher taste

Entered new categories,
general alcohol beverages

1990

2000

Volume-chasing firm

2010

2020

2024

Value-seeking firm2

Ongoing Change in Organizational Culture
A company making
delicious beer andalcohol beverages

A company that makes life good,

Centered around the company

Centered aroundand company products

customers (consumers)

Competes on volume

Competes on brand valueCompetes with similar products,

competes on pricewith its great beer and alcohol beverages

Pursues new, unique value

Battles on product quality

Seeks to move people(functional value)(surprise, impress, excite)

ASAHI BREWERIES.LTD.

3

A New Management Strategy Focused on
Sustainable Profit GrowthKGI

Pursuing volume sharein zero-sum markets
Never lose on sales
in a zero-sum market
Less investment
in enhancing
brand value

Company
Stop selling,
remove products driven
due tosluggish sales

Conditional
expenditure,
discount sales
ASAHI BREWERIES.LTD.

Push products
by appealing
low prices

Developproducts
ready for sale

KGI

Customer-driven
sustainable profit growth
Customer creation
Expand demand, markets

Sustainableprofit growth,
greaterbusiness
efficiency

Use businessresources toimprovecustomer value

CustomerAcquire/retain creation

loyal customers

Investin enhancing
brand value

Innovativeproductdevelopment
4

Innovation Chain (New Value Creation)

ASAHI BREWERIES.LTD.

5

Outcome of Structural Reform Initiatives
New profit structure to surpass
pre-Covid levels

Various structural reforms
・Price revisions

Unit price/L to sales/JPY

Offset cost increases

・No. of CC brands*2

down 45%

・Disposal

down 45%

・Products requiring
special processing

down 20%

・Factory operation*3

up 10%

・Improved, streamlined advertising

Revenue and Core Operating Profit（JPY Billion）

1,000

see subsequent slides
・Efforts to improve on-premise
profitability

Growthrate
+15％

17.4%

ⒸASAHI GROUP HOLDINGS. All rights reserved.

COP ratio (excl. liquor tax)
18.4%

16.0%

400

20.0%

16.5%
15.0%

11.9%
10.6%

11.5%
9.8%

10.1%

10.0%

886.9
758.3

200
*1 All of the above figures are 2023 results (vs. 2019)*2 Cold category (beer, RTD & non-alcohol beverages)*3 Includes the impact of two factory closures(Kanagawa and Shikoku)

COP ratio

800
600

─

Revenue
19.9%

786.2

811.3

2022

2023

5.0%

722.1

00.0%
2019

2020

2021

6More Sophisticated and Efficient Marketing/Advertising
Brand strategy
Brand purpose

Communication design
Kantar - NeedScope™ survey

Productvalidation
Kantar - Link™ survey

Informationbenefits
Promised delicious
taste (Functionalbenefits)

Reason tobelieve (RTB)
Brand insightsⒸASAHI GROUP HOLDINGS. All rights reserved.

7

More Sophisticated and Efficient Marketing/Advertising
CM popularity ranking(All industries)

Digital ratio (as proportionof TV advertising spend)

Source: CM Research Institute Data

Reference: Recent advertising awards■Nippon TV CM Award (Maru F), Nippon TV CM Awards 2023 *2022 CM Award■Media Mid Excellence Award (Smart Drinking) and Excellence Award in the Under 60 Second TV CM category(Maru F), 53rd Fuji Sankei Group Advertising Awards *Maru F won an award for 3rd consecutive year
■Spot Gold Award (Film Division), Series Silver Award (Film Division), 76 th Dentsu Advertising Awards*First win in the TV category since 2005 (Maru F)■Commendation, Series Division, 17th Nippon Broadcasting System CM Grand Prix (Super Dry)
■Medalist, Digital Category, 61st JAA Advertising Awards (Smart Drinking)■Mainichi Shimbun Special Prize, 91st Mainichi Advertising Design Awards (Maru F)ⒸASAHI GROUP HOLDINGS. All rights reserved.

8Key Strategic Stories for 2024 and Beyond
Increase competitiveness
Expand momentum

Implement
structural reforms

More advanced
administration, improved
productivity, greater
investment capacity■ Monetize Groupwide KGI■ Refresh sales and HR systems

Strengthenbeer products■ Expand Super Dry fans

Sustainableprofit growth■ Establish Maru F beer

ASAHI BREWERIES.LTD.

■ New High-value brands■ New smart brands■ Expand awareness, affinity■ Dry Crystal

Inspireinnovation

Expand High-value,smart category

toward smart drinking

Expand investment
in new value
for the future

Increasedprofitability, greater
investment capacity

92024 Business DirectionMore andmoreexciting,Asahi Beer

Spark customer anticipation
Pursue new, unique value
Strategy 1

Strategy 2

Enhance valueof existing
businesses

Carve newmarkets andnew value