Deepening the roots of Vietnam’s No.1 beer company (SAB) SABECO is now harvesting the fruits of responding to a changing business landscape and adapting to shifting consumer attitudes.
Deepening the roots of Vietnam’s No.1 beer company (SAB) SABECO is now harvesting the fruits of responding to a changing business landscape and adapting to shifting consumer attitudes.
According to Bao Viet Securities JSC, Saigon Beer-Alcohol-Beverage Corporation (SABECO) has been doubling down on its efforts to gain ground in major local markets like Danang and Ho Chi Minh City, cutting down production and logistics expenses, and increasing the firm’s total production capacity. The company hopes that all these initiatives can help it beat its 2019 full-year earnings target.
In the first half of 2019, SABECO’s revenue reached VND18,424 billion ($801 million), an 8.5 per cent increase on-year. Its profit after tax, meanwhile, stood at VND 2,820 billion ($122.6 million), a 15.2 per cent increase on-year.
“Like every year before this, 2019 has brought many challenges for SABECO. However, I am confident that with guidance of our leadership team, along with our clear business strategy and highly experienced staff, SABECO can overcome anything the market can throw at us. We will continue to go from success to success, increase our domestic market share, widen our international reach and maximise the benefits we bring to our shareholders,” stated Bennet Neo, general director, SABECO.
The company’s continued success is a result of the efforts of the whole Board of Management, which has six members, including three Vietnamese and foreign members each, and who are collectively perceived as “a dream team”. During its previous year of transformation, the leaders of SABECO focused on seven strategic pillars: sales, brand, production, supply chain, cost, human resources, and its boards.
Restructuring for the future
SABECO recently announced the rejuvenation of its flagship Bia Saigon brand as part of its long-term strategy to cement its leadership position in the market. Together with its refreshed logo, the Bia Saigon family – Bia Saigon Special, Bia Saigon Export, and Bia Saigon Lager – has been given a consistent new look while reflecting the distinct features of each variant and retaining their respective signature formula, ingredients, and alcohol levels.
The company said the brand rejuvenation campaign is the company’s latest initiative to develop its business. Following recent enhancements to its production capabilities, supply chain management, and sales and marketing approach which have positively affected the company’s performance, this new campaign is the next step in the company’s growth plans.
“We are focused on strengthening our capabilities to ensure that we have a good foundation on which we can sustainably expand our business,” said Hoang Dao Hiep, deputy general director of Marketing, SABECO.
Meanwhile, as part of its human resources initiatives, SABECO also introduced a new performance-based salary structure to help motivate employees to do outstanding work every day.
“We strive to create a fair and competitive working environment for our people to thrive,” he said. “The new salary structure was benchmarked with the industry to ensure it is competitive. With this, we can retain our existing employees as well as attract new talent,” Neo added.
SABECO has also implemented several initiatives to improve productivity and business efficiency throughout its operations. For instance, it introduced product packaging innovations such as the downgauging of cans and reducing the basic weight of cartons. In logistics, competitive bidding has been introduced for transportation, as well as a new control tower was launched with a trucking track-and-trace system. SABECO has also begun to plan its 4.0 digital transformation.
“We invested in the ‘track-and-trace’ system so that we can see every day which trucks go where,” Neo explained. “We have information about routing, the problems, the history, and so on. With this system, we can pinpoint the most optimal routes and estimate the time of delivery with a good level of accuracy.”
Near- and long-term focus
With the ambition of developing SABECO into the leading beverage group in Vietnam and set the stage for further regional and international expansion, the company seeks to continue leveraging on both local and international expertise to preserve the values of SABECO and its brands while constantly adapting to the evolving market and business environment.
For now, however, SABECO’s main focus is the local market. Before stepping out of Vietnam, the company believes it must first set its roots deeper – and the way it chose to do that is by slowly building up the profile of its flagship brand, Bia Saigon.
When SABECO feels utterly certain of its foothold in Vietnam, and when it is ready to bring Bia Saigon around the globe, the company will identify strategic markets where it will invest in branding and distribution.
“Currently, we are also looking at the other brands in our portfolio and planning similar initiatives to help them maintain their relevance and affinity with consumers,” Neo added. “We are able to do this because our previous initiatives helped build a strong base to support our long-term growth.”
