INDONESIA

 
Multi Bintang to seek market growth from non-alcoholic products

Indonesia’s largest domestic beer producer, PT Multi Bintang (Bintang) is exploring opportunities beyond beer as its top business agenda this year. Bintang aims to boost sales of its non-alcoholic drinks category in the Indonesian market, of which majority are muslims.
Presently, the company's non-alcoholic products contribute only 10% of the company's total sales while alcoholic beverages made up the remainder. Multi Bintang sees great potential in the non-alcoholic segment. “Our non-alcoholic portfolio has grown by double digits every year. Our mission is to continue this growth,” said Multi Bintang President Director Michael Chin.
Over the past few years, Multi Bintang has sought to diversify its products in order to reduce its dependency on alcoholic beverages. The company recently introduced 2 new non-alcoholic brands to Indonesia, Fayrouz and Strongbow. It also introduced new non-alcoholic variants within its existing brands, Bintang and Green Sands.
In 2017, Multi Bintang recorded Rp 1.32 trillion (US$96.36 million) in net profit, a 34.8% growth from previous period, thanks to improved revenue management and cost-efficiency measures. The sales composition of its alcohol and non-alcoholic products was Rp 3.04 trillion (US$221.9 million) and Rp 340.21 billion (US$24.83 million) respectively.
Multi Bintang Finance Director Eric Mul said weak consumer spending in Indonesia will pose major challenge to growing both its alcoholic and non-alcoholic segments. In addition, uncertainty regarding government regulations also affect future growth. The ban on sale of alcohol in minimarkets in 2015, has led Multi Bintang to shift its sales strategy from retail stores to bars and restaurants. Foreign tourist arrivals to Indonesia have also not improved much this year and recent terrorist bombings near churches will negatively affect tourist sentiments for the rest of 2018. For alcoholic products, the company sees Bali as its focal market, apart from other major tourist attractions like Labuan Bajo, Lake Toba and Manado.
Apart from the domestic market, Multi Bintang has also started exporting its Bintang beer to the UK in 2017, in addition to its existing export markets in Australia, Japan and the Netherlands. The company will continue to seek new markets although contribution from exports represent a tiny portion of its total revenue.