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China’s booming beer market set to grow

China consumes 40 billion liters of beer annually or about ¼ of the global beer consumption and it is set to grow. Market research firm Spire says, China’s beer consumption will expand at a compounded rate of 5-10% over the next 3-5 years. How will consumption continue to grow?
Channel NewsAsia Business Tonight

Synopsis of television interview with Spire’s Chief Executive Officer, Leon Perera

China consumes 40 billion liters of beer annually or about ¼ of the global beer consumption and it is set to grow. Market research firm Spire says, China’s beer consumption will expand at a compounded rate of 5-10% over the next 3-5 years.

China’s economic growth is overflowing into a booming beer industry. Analysts say it is the biggest consumer of beer in Asia, and the fastest rising due to its growing middle class and increasing discretionary income – companies are taking note.

Spire commented on the importance of seeing China as a highly localized beer market where conditions differ very much by locality, and distribution differs according to locality as well. For example, very often access to distribution outlets and retail outlets tends to be influenced by local authorities or local companies, and that is why the preferred entry route of many foreign companies tends to be through acquisition. As the feature went on to discuss, it is through mergers and acquisitions that Danish brewery Carlsberg has built up its portfolio there to 15 different brands.

But, it is now looking to grow its flagship Carlsberg branded beer, which belongs to the premium imported segment in China. Carlsberg believes that while that segment only accounts 1-2% of the broader beer market, the absolute number is nothing to sniff at.

With the global relaunch of its Carlsberg brand, it hopes Asia will account for up to a quarter of its group global revenue in 5 years time. That is up from the 5-10% that Asia contributed last year to the company $11 billion sales.

by S. C.
16 june 2012, World News > Asia

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