34 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2020

CEO Business Review

Beverages (Soft Drinks and Beer)

CORE MARKETS • • • POWER OF OUR ENDURING BRANDS 35 36 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2020

CEO Business Review

BEVERAGES (Soft Drinks and Beer) The new, zero sugar CORE MARKETS variant of 100PLUS F&N launches direct-to-customer • Malaysia • Singapore 100PLUS Zero online site • Myanmar F&N LIFE

Beverages F&N ICE MOUNTAIN Malaysia Sparkling Water now in Malaysia FY2020 PERFORMANCE Amidst difficult market conditions in Malaysia, our largest market for Beverages recorded weaker performance this year. While we delivered on product 100PLUS innovation and invested in effective remains Malaysia’s No.1 in-market activities during festive periods, Carbonated Soft Drink which fuelled top line growth in the and No.1 Isotonic Drink brand first half of this fiscal year, the full-year performance has been impacted by the COVID-19 pandemic. As the pandemic spread in March, the various stages of nationwide lockdowns impacted on-trade sales in the second half of the year. Beverages Malaysia FY2020 revenue guided by our mission to enhance quality It also conducted above- and below- declined 11.8% yoy to $291.8m, from of life and contribute to a healthier future the-line activations, including holding $330.8m previously. Despite savings from as we deliver high quality products to all roadshows to spread festive cheer in its cost mitigating measures, operating profit Malaysians. annual carnivals held in four locations declined 8.8%, to $23.1m. The lower nationwide. profit was due to lower sales and higher ISOTONIC: 100PLUS advertising and promotional spending in 100PLUS, F&N’s flagship brand and The growing awareness and demand support of new products. Malaysia’s No.1 Carbonated Soft Drink for healthier products prompted the and No.1 Isotonic Drink brand, continued exclusive launch of 100PLUS Zero in By the end of the third fiscal quarter, to cement its position as the enabler of 7-Eleven, Malaysia this year to great Malaysia started easing certain restrictions, active lifestyles through its support of a response. This came after its very and we saw some retail outlets opening series of sports sponsorship deals. These successful launch in Singapore in again. Post-MCO, we have seen sponsorship included supporting our the previous fiscal year. As a result domestic and export volumes recovering. national athletes, major sports events of overwhelming demand, we have Although economic activities are gradually and several national sports bodies. This also made 100PLUS Zero available in normalising, it is still too early to conclude year, 100PLUS extended its partnership general and modern trade starting if such demand is sustainable. with the Football Association of Malaysia August 2020. (“FAM”) for another year until 31 Despite a challenging year, the Group’s December 2020. 100PLUS is a long-time In November 2019, 100PLUS was able to leading positions of its core brands supporter of football development in get over 10,000 Malaysians on their feet 100PLUS, F&N SEASONS, OYOSHI Malaysia, and is the official hydration with an active lifestyle event, 100PLUS and F&N NUTRISOY in Malaysia were provider for major football and futsal AKTIFKAN MALAYSIAKU. The three- maintained, as Beverages Malaysia kept events across Malaysia. A fervent part nationwide call to an active lifestyle up marketing and branding initiatives, advocate of sports development and started in Kota Kinabalu, followed by focusing on promoting active and healthy active lifestyles, 100PLUS will continue Kuala Terengganu, with its finale flag- living. The Group is confident that our its support and involvement in sports, off taking place in at robust plan for sustainable growth will including FAM-related competitions, Bukit Jalil National Stadium. 100PLUS enable us to meet the challenges ahead. programmes and activities in the country. AKTIFKAN MALAYSIAKU was a call for We will continue to lift efficiency across an active lifestyle among Malaysians our entire value chain and reinvest our To generate excitement, 100PLUS also and aimed to encourage more to start realised improvements into growing our rolled out limited-edition packaging in living an active lifestyle and giving their business sustainably. We will remain celebration of the 2020 Chinese New Year. 100% in everything they do, fuelled by POWER OF OUR ENDURING BRANDS 37

100PLUS. The event provided sampling The Group also widened the offerings for Since the escalation of COVID-19 opportunities and successfully drove its water brand – F&N ICE MOUNTAIN. outbreak, F&N Singapore stepped up engagement and conversion. This year, it introduced three new bubbly with food and product donations to the and delightful flavoured variants to local community. Recipient organisations During the nationwide lockdown its sparkling water range – Original, included various local charities, medical due to the coronavirus, 100PLUS held Lemon and Grapefruit. These new institutions and food banks. The Group virtual workout sessions, conducted by additions offer consumers a carbonated will continue to support and provide aids, professional trainers, to help consumers water that is both affordable and healthy, donations and sponsorship as this health achieve a healthier mind and body. with no sugar and zero calories. crisis evolves. These free, online sessions, which included HIIT and dance sessions, ISOTONIC: 100PLUS were part of 100PLUS’ month-long Singapore’s No.1 isotonic brand, campaign to increase brand visibility 100PLUS, remains the isotonic drink and top-of-mind awareness. of choice for consumers. It has been Beverages supporting active lifestyles over the DIGITALISATION OF SALES years through sponsorship and AND COMMUNICATION Singapore sporting events such as the STANDARD The digital transformation at F&N CHARTERED SINGAPORE MARATHON, continues apace. To meet the evolving FY2020 PERFORMANCE OCBC CYCLE and HSBC SINGAPORE needs and purchasing habits of Despite challenging market conditions, RUGBY SEVENS. consumers, the Group unveiled its first Beverages Singapore maintained its leading direct-to-consumer e-commerce store market positions in its core categories As stringent border control and social in Malaysia, F&N Life. The rollout of – 100PLUS in Isotonic, F&N NUTRISOY distancing measures were enforced, this e-commerce store was timely as in Soya and F&N ICE MOUNTAIN in digital media consumption grew. increasing number of consumers are Water. F&N continued to focus on To encourage Singaporeans to stay opting to buy food and drink products building brands and bringing healthy and fit and lead active lifestyles, 100PLUS, online as a result of lockdowns and other innovative products to consumers as we in collaboration with the Sport Singapore social distancing measures due to the navigated the impact of COVID-19. (“SS”), launched the STAY FIT campaign. coronavirus outbreak. With the launch of this online store, consumers in Malaysia can now purchase all F&N’s products, including those launched in this fiscal year, from F&N Life. This e-commerce store is another alternative to other e-commerce sites such as Lazada and All natural, premium non-GMO beans Shopee for fast and easy access to F&N products. F&N NUTRISOY fresh soya milk with real oats & quinoa Riding on this e-commerce platform, the Group rolled out a marketing campaign – GERAI RASA RAYA (Taste of Raya) – to put Malaysians in the festive spirit of Ramadan during the MCO lockdown. This campaign aimed to bring families together to recreate popular F&N Ramadan delights at home with the ICE MOUNTAIN help of recipes accessible on F&N Life’s has a new sustainable app and website. In addition, consumers & recyclable paper could purchase their favourite F&N products and have them delivered free packaging of charge, with no minimum order. Gold NEW PRODUCTS OYOSHI This year, the Group added two new added two new sugar-free offerings to its OYOSHI Gold sugar-free variants - #STAYFIT portfolio – Kabusecha and Sencha. Kabusecha and Sencha with These 380ml green tea drinks are sugar-free, and are brewed with 100% 100PLUS imported authentic Japanese green tea leaves from Makinohara Plateau, Japan. 38 Fraser and Neave, Limited & Subsidiary Companies Annual Report 2020

CEO Business Review

BEVERAGES various uses of F&N NUTRISOY in and introduced a new range of cans to cooking and dessert preparation. its water portfolio. This was accompanied (Soft Drinks and Beer) by a flavour extension of the Peach CORE MARKETS F&N NUTRISOY continued its partnership variant. A festive campaign anchored • Malaysia • Singapore with SHF through its sponsorship of the by a month-long Orchard Road pop- foundation’s two key events – GO RED up was successfully executed to drive • Myanmar FOR WOMEN 2020 and WORLD HEART consumer awareness and trial. F&N ICE DAY 2020 – to promote heart health MOUNTAIN sparkling water maintained and educate Singaporeans to lead heart high visibility with consistent consumer The campaign involved live workout healthy lifestyles. As a pledge of our touchpoints to drive purchase and gain sessions, which included yoga, kick support, all F&N NUTRISOY Fresh Soya market share. boxing, HIIT, etc, conducted by Milk packaging bears the SHF logo. professional trainers and SS brand In August, as a champion of ambassadors. To reach a wider audience, JUICES: F&N FRUIT TREE FRESH sustainability, F&N ICE MOUNTAIN 100PLUS also worked with fitness With more consumers opting for launched a new sustainable and influencers and celebrities to create healthier and immunity boosting recyclable paper carton pack version of fitness content on 100PLUS’s social products, the Singapore Team ran a series its drinking water variant. Made with sites, including its own Facebook and of social media posts and put up point- FSC certified carton paper sourced from Instagram pages. These virtual workouts of-sale materials to reinforce the message responsibly managed forests, the new also enabled 100PLUS to stay engaged of staying healthy by consuming F&N packaging also comes with a bio-based with consumers, and emphasized to FRUIT TREE FRESH daily. F&N FRUIT TREE cap made from sugar cane. Halal- them the importance of staying hydrated. FRESH is made from 100% great tasting certified, F&N ICE MOUNTAIN’s new juice and rich in vitamin C. earth-friendly pack provides everyday SOYA: F&N NUTRISOY healthy hydration for eco-conscious F&N NUTRISOY, Singapore’s No.1 soya F&N FRUIT TREE FRESH has reformulated consumers. brand, continued to focus on raising its reduced sugar range to meet the brand visibility and awareness of its range growing demand for healthier choice TEA: F&N SEASONS of high calcium and low-glycemic index beverages. Launched in September, F&N SEASONS celebrated the Lunar soya beverages amongst consumers. F&N FRUIT TREE FRESH Reduced Sugar New Year with its Sugar Free Pu-Erh juice range – Apple, Orange, Mango and Chrysanthemum Tea festive pack – a This year, F&N NUTRISOY expanded Guava – is not only lower in sugar but guilt-free beverage to balance out the its soya range with the introduction of also high in vitamin C. festive snacking. Certified with Health F&N NUTRISOY Real Oats & Quinoa in Promotion Board’s Healthier Choice logo, November 2019 and F&N NUTRISOY A new addition to the F&N FRUIT TREE F&N SEASONS Pu-Erh Chrysanthemum Pandan in June 2020. The launch of FRESH Reduced Sugar juice range is the Tea is a perfect blend of rich tasting F&N NUTRISOY Real Oats & Quinoa new soursop variant. Made with real pu-erh and floral notes of the finest (Reduced Sugar) was supported by soursop juice, this new variant is not only chrysanthemums that continuously nationwide marketing campaign, which low in sugar, but also high in antioxidants delights all Chinese tea lovers in has successfully created awareness and – vitamins A, C and E – with generous Singapore. drove trial. F&N NUTRISOY Pandan amounts of chewy nata de coco. (Reduced Sugar) was introduced as FLAVOURED CARBONATED SOFT a limited-edition variant. Made with WATER: F&N ICE MOUNTAIN DRINKS: F&N SPARKLING DRINKS fresh soya beans and fragrant pandan F&N ICE MOUNTAIN is the No.1 water In conjunction with the Hari Raya leaves, this reduced-sugar variant is 25% brand in Singapore, led by its still festivities, F&N launched the limited- lower in sugar compared to its regular drinking water range. This year, F&N edition F&N Sparkling Bandung drink. variant. Similar to its existing fresh soya ICE MOUNTAIN further strengthened its Made with the perfect combination of bean milk range, these new variants are relevance with younger consumers fragrant rose syrup and sparkling water, vegan-friendly, high in protein, calcium with the relaunch of its sparkling water F&N Sparkling Bandung was a popular and Vitamin D4, and are certified as range. The brand also championed drink amongst locals to enjoy during “heart-friendly” by the Singapore Heart sustainability with the release of its Hari Raya. Launched in June within the Foundation (“SHF”). very first sustainable paper carton convenience channel, the new product packaging. targeted both the local and younger Riding on the increasing in-home demographic. Certified as a healthier consumption trend during CB, F&N In December, F&N ICE MOUNTAIN choice product by the Health Promotion NUTRISOY also launched a series of sparkling water updated its bottles Board, F&N Sparkling Bandung was a culinary sessions to demonstrate the to a more modern and premium look, great hit amongst Singaporeans. POWER OF OUR ENDURING BRANDS 39

In addition to football, CHANG also Beer continually excites its consumers through innovative marketing and The results of our beer division take into exciting activities based on experiential account our brewery in Myanmar and marketing initiatives. This year, beer distribution in Singapore. it continued its brand building efforts with consumer engagement programmes EBML officially FY2020 PERFORMANCE focusing on Thai culinary experiences served its first F&N’s greenfield brewery, Emerald and culture to reach wider audience, brewed-in-Myanmar Brewery Myanmar Limited (“EBML”) effectively boosting brand awareness and commenced production of the award- consumption. In February, CHANG was CHANG winning CHANG beer on 1 October proud to be the Official Beer Sponsor of beer in Myanmar 2019. Licensed to EBML by F&N’s Singapore’s first-ever Chatuchak Night strategic partner, Thai Beverage Public Market. Previously a two-hour plane Company Limited, this lager uses only ride away, Bangkok’s popular Chatuchak the finest ingredients from Europe and Night Market arrived on our shores, the USA, just like CHANG in . attracting Singaporeans with over 300 #WeBrewFriendship F&B and street wear stalls. As part of the Building a strong foundation for sponsorship, CHANG featured its very CHANG was the primary focus in own CHANG Beer Garden, a pop-up bar that served its cold and crisp lager, FY2020. To that end, in Myanmar, equity we concentrated on building local as well as interactive activities such as Building brand brand equity by rolling out a year- Beer Pong for consumers. Located at in Singapore and Myanmar long campaign, TIME FOR A CHANGE, The Grand Stand, CHANG Beer Garden via various consumer TIME FOR A CHANG. Using outdoor, was the perfect place for consumers to digital and print advertising platforms soak up the effervescent atmosphere and engagement to reach consumers, this 360-degree experience the vibrancy of urban Thai marketing campaign covered both lifestyles with friends and family. programmes point-of-sale advertising and off-premise and marketing advertising which included banners and Visibility of CHANG beer was also posters located at local retailers and supported by sponsorship of business campaigns wholesalers. conferences, exhibitions and events. To further drive volume and build brand In Singapore, visibility of CHANG equity in Myanmar, we ran tactical continued to increase through its promotional campaigns. association with football. Building on #WeBrewFriendship last year’s success, CHANG Football PROTECTING THE ENVIRONMENT Moments was back for another year of We are mindful of the need to operate football action. As the Official Broadcast our business sustainably. As such, sponsor of the 2019/20 English Premier we are environmentally conscious, League (“EPL”) in Singapore, CHANG and continuously examine the efficiency organised live screenings throughout of energy and water usage, proper the entire 38-week EPL season. When treatment of effluent and reduction physical live-screening events became of packaging waste at all our brewery. a challenge due to social distancing measures, CHANG Football Moments To minimise packaging waste, EBML went virtual during the match between eliminated excess packaging from its Manchester United versus Leicester products, including downsizing paper Protecting our City. Football fans were invited to join carton boxes and removing unnecessary environment by the pre-game virtual party alongside packaging on merchandise. Its new minimising football legends and event hosts, as boiler has also significantly reduced the packaging waste they cheered on their favourite teams plant’s energy consumption and carbon over a refreshing CHANG. Supported footprint, as it relies entirely on carbon by well-executed TV advertisements and dioxide and an inverter to generate strong social media presence, we were power. These initiatives not only reduced able to generate trials and improve brand EBML’s environmental impact, it also visibility in Singapore. generated cost savings.