Malaysia: Carlsberg Malaysia sees lasting shift in drinking habits, eyes growth beyond beer

Carlsberg Brewery Malaysia Bhd has observed a structural change in the country's drinking habits since the Covid-19 pandemic, with more consumers opting to drink at home rather than at bars or restaurants, The Edge Malaysia reported on August 12.

Managing director Stefano Clini said this shift, which began during pandemic lockdowns when on-premise outlets were closed, has continued even after restrictions were lifted. "Before Covid, on-trade accounted for more than half of our business. Now, off-trade is half or more than half. That change appears to be permanent," Clini told a media briefing.

He noted that this trend mirrors global consumption patterns, where off-trade — which refers to retail sales for home consumption — often makes up the majority of beer sales. In some European markets, off-trade can account for as much as 70% to 80% of total sales.

This change has been compounded by weaker consumer confidence over the past 18 months, which has further impacted on-trade sales. "When people go out, they go out less and maybe drink less. Consumers make trade-offs — deciding, for example, between a coffee or a beer at a café," Clini said.

On consumer demography, Clini said Carlsberg's data shows those aged 24 to 35 are still consuming beer, though they tend to drink slightly less. Consumption generally rises with age, he said, which is consistent with historical patterns. "Every generation is a bit different, but we haven’t seen a massive decrease in penetration in the beer category in Malaysia," he said.

While beer remains the company's core business, Clini said Carlsberg is gradually expanding into other beverage segments to adapt to changing consumer preferences. Carlsberg Group's significant acquisitions in the soft drinks sector globally reflect the group's ambition to become a "total beverage company."

"That beating heart in beer and brewing is never going to change, but gradually we’re going to complement that. We will be where the consumer is," Clini said. He noted that the group has diversified more rapidly into non-beer categories in Europe due to sharper declines in beer consumption, while the pace of diversification in Malaysia will depend on local market conditions.

Earlier this year, Carlsberg Group, through its wholly-owned Carlsberg UK Holdings Ltd, finalised the acquisition of Britvic plc, a leading international soft drinks company, for £3.3 billion (RM19.9 billion). The merger created a single integrated beverage entity in the UK, branded as Carlsberg Britvic. Britvic is PepsiCo's exclusive bottling partner in Britain and Ireland, with rights to manufacture and distribute brands such as Pepsi, 7UP and Lipton Ice Tea.

For now, Clini said the brewer’s strategy is to strengthen its portfolio, maintain its relevance across all age groups, and quickly respond to shifts in how and where consumers choose to drink.