Time For A Tiger?

Since Charoen Sirivadhanabhakdi has gotten out of the way and instead supported Heineken’s take over bid of Asia Pacific Breweries;  all we await now is formality which will come at the extraordinary general meeting (EGM) on September 28 – of course, aside from what the future could be for them.

Let’s take a little walk down memory lane.

Asia Pacific Breweries (APB) was founded as Malayan Breweries Limited (MBL) in 1931, and in a joint venture between Heineken International and Fraser & Neave in 1990, it acquired its present name.  Dutch brewer Heineken, the world’s third-largest brewer, is APB’s largest shareholder with 41.9% shares while F&N has 40%.  Now, since Heineken wants control of APB, it has to get into a deal with F&N’s shareholders, the largest being billionaire Charoen of Thai Beverage PCL and TCC Asset Ltd.

At first, Charoen wanted control of F&N, thereby, putting Heineken’s bid for APB in jeopardy;  however, just recently, Charoen agreed to support Heineken’s drive – naturally, with a deal in place.

And so, what’s all the pother about APB’s key brand, Tiger Beer?

Well, when you acquire a business – you reduce competition, you gain its customers, its market, you get its assets and all you do now is run the business to greater profitability.  Obviously, this is what Heineken is looking forward to with APB.

Now if a certain beer brand is doing well in some countries or areas but lagging in others, what could be the problem?  Analytical shortage.  What needs to be done?

  • Do the “old” survey and taste test with discriminating beer experts and random beer drinkers from weaker markets.  Do a comparative analysis as to the areas’ preferred brands.  Depending on the differences, you could either reduce or add on to the beer brand’s formula and produce a new brand.  This should be done every five years from inception specially if your brand is not among the Top 10 Leading Brands.
  • Do cost-efficient measures.  Remove weaker brands from your portfolio, and increase marketing and positioning to your more competitive brands.  Close breweries that are close to one another, consider consumption data – make their locations more strategic.
  • Improve product packaging to signal a new coming and a better product to gain market share.  Enhance promotions.  And continue to maintain competitive pricing to attract loyal customers.
  • Expand your market (and set up breweries) particularly in countries with lesser competition, or where you have an advantage in price, or where drinking culture permeates possible market breakthroughs.

As for Fraser & Neave, your future really depends on who your ultimate owner would be; nevertheless, look at all possibilities, you got potential buyers for your other businesses in non-alcoholic beverages and real estate.  If the offer is so much more than you hoped for – go for it then invest in promising ventures.  Otherwise, consider strengthening your real estate division.  Also extend your soft drinks market, but first, study the food and drink mix as to the human “palette” to be really successful.  See, beverage consumption has something to do with food mix.  Notice why only Singapore and Malaysia made F&N drinks their preferred brand?  Because the consumers’ food flavor blends with F&N’s beverage flavor, thus, consider the taste buds of an area before manufacturing and distributing products.  Lastly, intensify tie-ups with restaurants, schools, sports organizations, and alike.

These are just a few steps to fully benefit, specially from a take over, in the beverage industry.

What’s your take?