Vietnam’s constant blanket of heat and high humidity are the perfect conditions for an ice-cold beer all year round. The locals agree. Ever since the French colonial era when beer supplanted rice wine as the Vietnamese drop of choice, the golden liquid has been a winner in bars and other watering holes.
And chances are if you’re knocking back a beer in Vietnam, it’s a SABECO. Otherwise known as Saigon Beer Alcohol Beverage Corporation, SABECO is one of the country’s top producers of beer, with Bia Saigon and 333 as its flagship brands.
SABECO has, like the country itself, been through a lot since it was established as BGI Brewery in 1875. After the South Vietnamese revolution, the company was taken over by the state’s Ministry of Trade and Industry in 1977.
This was a time of great expansion for SABECO, which took Bia Saigon and 333 to the people as a promotion of Vietnam’s strong culinary culture. In doing so, it made beer one of the staples of that culture; today, the nation is the leading consumer of beer in the ASEAN region.
Gaining international recognition
Such was the success of SABECO that it attracted international attention from would-be owners. In the end, it took a 2018 offer of US$4.8 billion from Thai Beverage (ThaiBev) that led SABECO to change hands, making the Vietnamese brewer part of one of the largest beverage firms in South-East Asia.
And according to Bennett Neo, CEO of SABECO, that’s been a key indicator of growth.
“For me, one of the most important things has been seeing the company grow from a state-owned and managed enterprise to a more internationally run company,” he says.
“I say that because our processes and our people are now more international. We have international best practices infused in our operations. To me that’s a milestone, and we’re all very proud of it.”
The purchase has also further strengthened SABECO’s popular brands that much more.
“We consider ourselves the national pride of Vietnam, and people do feel proud of these brands,” Neo reveals. “During the COVID-19 pandemic, we could see that people shifted their preference toward our brands, and so rather than cutting back our brand investment during the financially tricky time, we decided to increase it and as a result we continued to gain strong growth momentum.”
The broadening of the company’s horizons has also taken it in new operational directions. One of the major accelerants of that drive to the top is the launch of SABECO 4.0, a strategic transformational initiative with an emphasis on digital technology.
“We’ve modernized significantly. We’ve launched SABECO 4.0 to improve our ways of working, through centralizing and digitizing our processes, starting from the areas of supply chain, warehousing, sales operation, and business intelligence system. We then improved our production efficiencies and at the same time drive sustainability initiatives,” Neo confirms.
“For instance, at the time of the purchase by ThaiBev, we were using almost five liters of water for every liter of beer produced. Now, we’ve cut that down to just below three liters.”
These improvements have led to a jump in quality for brands already renowned for their high standards.
“We’ve been winning gold medals,” he says with pride. “Most recently we won the Asia Beer Championship 2022 International Lager Gold Medal. Most recently we were awarded four gold medals from Beverage Testing Institute, the organizer of the World Beer Championship for top quality.”
At the time of the purchase by ThaiBev, we were using almost five liters of water for every liter of beer produced. Now, we’ve cut that down to just below three liters.
Internally, SABECO 4.0 has made life and work for those colleagues much easier.
“We’re launching a workplace system that acts as a communication network for the whole company,” he explains. “It will improve efficiency company-wide, but will be particularly beneficial to the sales team.”
All this marks SABECO’s first three years of transformation based on seven strategic pillars: sales, brand, production, supply chain, cost, people and board, which form SABECO 4.0 as its foundation. This set the springboard for SABECO to enter the second phase of its transformation, which is in its ignition stage. Neo believes it will be a turning point for the company.
“When we hit that, I can confidently say we’ll be one of the best-run companies in Vietnam, if not the region,” he says. “It will be the culmination of what we’ve become post-purchase.”
The four CS
The new SABECO is paying particular attention to ESG and CSR, both important to a company in the brewing profession.
“Sustainability has become a bit of a buzzword. Everyone’s talking about it, but we’ve been doing it for a while,” Neo points out. The SABECO difference is that its initiatives in the field are very specific and not simply bundled together under the umbrella of sustainability.
“We have the four Cs,” he adds. “The first C is consumption, where our focus is to promote responsible drinking. We conduct advocacy activities to ensure people make the right decision about alcohol consumption and drink in moderation.”
Sustainability has become a bit of a buzzword. Everyone’s talking about it, but we’ve been doing it for a while.
Next is conservation.
“We’re already actively monitoring energy and raw material usage on a monthly basis, and as I’ve mentioned we’ve already dramatically improved our water use,” he says.
The third C is culture, which is almost the jewel in the crown of a national beer.
“As Vietnam’s leading company with rich Vietnamese heritage, culture forms a natural part of our DNA,” he stresses. “During TET, the local Vietnamese new year, we supported local workers by giving them complimentary travel tickets to return to their respective hometowns and celebrate the spirit of togetherness with their families and friends. This is one of our ways to preserve our local culture and to recognize the contribution of our local workforce to the socioeconomic development of Vietnam.”
Last but not least is country, specifically its development.
“That’s a broad topic, so it can be infrastructure or even sports,” Neo explains. “In fact, we have been the top star sponsor of our national football teams for three years and also the sponsor of the 31st SEA Games.”
On the product side of the business, SABECO isn’t content to simply nurse its current drinks. Coffee is another important drink in Vietnam, so the company launched a limited-edition coffee-infused variant of its Bia Saigon.
“Beer and coffee are the two most popular beverages in the country, so by bringing them together we’re highlighting and celebrating Vietnam’s culture,” he says. “We locally sourced the coffee from the highlands, so it’s another way to inspire national pride.”
Knowing your color
The job of guiding this sweeping change seems intimidating, but Neo insists he’s kept grounded by his personality color.
“Everyone is one of four personality colors,” he explains. “A red person is very firm and decisive but can be seen as aggressive. Yellow is talkative, personable. Green people want peace and harmony, and blues are methodical and pay great attention to detail.”
Self-awareness of what camp they fall into is the hallmark of a successful leader, according to Neo, and to that end he’s quite sure of his place on the spectrum.
“I’m a bit green, very red at times, but more blue,” he admits. “Yellow is tougher – it’s a bit out of my comfort zone.”
If you’re a national brand, that’s a competitive advantage.
Beyond this, it’s important for a leader to know his or her people’s colors as well.
“You have to find the right mix, determine how your colors impact others,” he claims. “That’s effective leadership.”
And on a wider scale, it’s that knowledge of his country that will allow Neo to take SABECO even further.
“If you’re a national brand, that’s a competitive advantage,” he reflects. “We know the local culture, the nuances, the people. Just look at the awards we’ve won recently. They’re a testament that the direction in which we’re headed is the right one, and that we’re doing the right thing.”