AB In­Bev op­ti­mistic about growth

China Daily (Hong Kong) - - BUSINESS - By XU JINGXI in Guangzhou xujingxi@chi­nadaily.com.cn

An­heuser-Busch In­Bev SA/ NV, the world’s big­gest brewer by sales, is op­ti­mistic about main­tain­ing dou­ble-digit growth in sales of its su­per pre­mium brands in China this year, given that strong de­mand for its prod­ucts con­tin­ues to in­crease, a top ex­ec­u­tive said in an in­ter­view.

“We see an ob­vi­ous trend for con­sumers who want more from the beer mar­ket in China, es­pe­cially in the south and in the first-tier cities. Con­sumers are de­mand­ing dif­fer­ent types of beer and are will­ing to pay more for a swig of the im­ported stuff,” said John Hsu, vi­cepres­i­dent of su­per pre­mium brands of AB In­Bev China.

“Although the growth of China’s over­all beer in­dus­try is slow­ing down, we have seen dou­ble-digit an­nual growth in the im­port vol­umes of su­per pre­mium beer in the past three years,” Hsu told China Daily.

Pre­mium and su­per pre­mium beer is the sec­tor beer mak­ers be­lieve shows the most prom­ise to break through the cur­rent bot­tle­neck in beer sales in the Chi­nese mar­ket, to gen­er­ate rapid growth.

Although to­tal sales vol­umes of the beer sec­tor in 2015 fell 4.9 per­cent year-on-year, sales of pre­mium beer and su­per pre­mium beer in­creased by 9 per­cent and 17 per­cent re­spec­tively, ac­cord­ing to Fang Gang, a Bei­jing-based beer mar­ket­ing spe­cial­ist.

“The midrange and low­priced beer still com­mands at least 80 per­cent of the beer mar­ket in China, but sup­ply ex­ceeds de­mand in that seg­ment,” he said.

In re­sponse, lo­cal brew­eries like Ts­ing­tao Beer, Yan­jing Beer and China Re­sources’ Snow Beer, launched a num­ber of pre­mium prod­ucts in the past two years to com­pete against im­ported brands that now sit at the top of the sales pyra­mid.

But the pre­mium and su­per pre­mium mar­ket in China is ac­tu­ally still un­der de­vel­op­ment, ac­cord­ing to Zhu Dan­peng, a re­searcher at the China Brand Re­search In­sti­tute, spe­cial­iz­ing in food and bev­er­age business.

“To de­velop the mar­ket, cul- ti­vat­ing a beer cul­ture is the key,” said Hsu from AB In­Bev China, which sells 20-odd pre­mium and su­per pre­mium brands in China, in­clud­ing Corona and Stella Ar­tois.

For ex­am­ple, AB In­Bev brought the Corona Sun­sets Mu­sic Fes­ti­val to Guangzhou in south­ern China’s Guang­dong prov­ince last week­end. It built a 7,000 square me­ter ar­ti­fi­cial beach there, where young peo­ple danced to mu­sic, while hold­ing Corona beer served with lime in their hands.

“We will in­tro­duce more pre­mium beer and the top brand of each type to Chi­nese con­sumers,” Hsu said.

“By link­ing a brand to a par­tic­u­lar drink­ing rit­ual and life­style, we hope to build up spe­cial con­nec­tions be­tween con­sumers and dif­fer­ent prod­ucts.”

PRO­VIDED TO CHINA DAILY

A young man dances to African drum beats at the Corona Sun­sets Mu­sic Fes­ti­val held in Guangzhou, Guang­dong prov­ince re­cently.

John Hsu, vi­cepres­i­dent of su­per pre­mium brands of AB In­Bev China

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