China Daily Global Edition (USA)
Tsingtao eyes upmarket beer sales
Tsingtao quenches world’s thirst, eyes global middle and high-end market
On Dec1, Mike Steward, a cyber engineer from Boston, the United States, tweeted about Tsingtao: “I’m in love with this beer. It’s so amazing and full of life; life is in it.”
Kammy Chahal, brand director of Pabst’s Tsingtao US, told the media later: “Yes, we have seen double-digit sales volume increases for the past few months in key markets in the United States.”
In 2016, Tsingtao’s sales grew 12 percent in overseas market, including 8 percent in western Europe, 14 percent in Latin America and 45 percent in the Asia-Pacific. The year-on-year increase inked at 80 percent in South Korea, 55 percent in Russia and 97 percent in Costa Rica respectively.
Founded in 1903 by beersavvy German and British merchants in China, Tsingtao is sold in 94 countries and regions. The company has hosted one of the world’s largest beer festivals, the Qingdao International Beer Festival, or Asian Oktoberfest, for 26 years.
In 2015, Tsingtao Brewery sold 8.48 million kiloliters of beer, with revenue reaching 27.64 billion yuan ($4.15 billion). It is now ranked fifth globally in the sector in terms of production output, according to the Barth Report, an authoritative beer industry compilation.
In a recent interview, Sun Mingbo, chairman of Tsingtao Brewery, said: “We want to actively explore overseas markets. There is consensus in China’s liquor industry that we need to build brands with international reputation.”
TheUKhas pub culture and its consumers are very picky about beer quality and taste. That Tsingtao beer sales increased at least 10 percent annually in recent years is a tribute to its resilience in the market.
According to JamesWright, a UK-based Tsingtao dealer, there are more than 2,000 beer brands in theUKmarket.
“Tsingtao has actually been one of the stand-out brands. The Chinese brand’s market share kept growing in the UK’s imported beer sales,” he said.
This is all the more impressive when you consider that beer sales have stuttered in the UK in recent years due to the exorbitant duties, Wright said.
In Germany, where fresh breweries are seen all over and a total of 5,000 brands are sold, the average price of Tsingtao beer is set at 3 euros ($3.2), compared with 0.8 euro to 1 euro of local brands. At least 150,000 boxes of Tsingtao beer have been sold in Germany every year in recent times.
“The pursuit of higher quality through innovation has been a major driver for Tsingtao’s overseas market expansion,” said Sun.
In order to ensure products are of high standard, Tsingtao brewers must stick to a strict and detailed brewing process, which has 113 years of history. Each bottle goes through 1,800 procedures before it is delivered to market.
“For a Chinese brand, it takes decades rather than years to gain recognition in the international markets, and the quality is the foundation to achieve that.
“Tsingtao does not intend to produce low-end products just to improve sales in the international market. Our products aim at global middle and high-end market.”
Tsingtao is also trying to diversify its products to meet changing market demand.
For instance, Tsingtao’s factory in Qingdao used to produce only three kinds of beer in 1980s, compared to the current 183 varieties. Tsingtao’s factories nationwide are producing 1,500 beer products across more than 20 categories.
It has launched several new products, including special packages for festival events, high-end black beer (or schwarzbier, a dark lager usually made in Germany) and football packages to upgrade its portfolio.
Zhang Yi, senior customer manager of Tsingtao Overseas Business Department, said: “We offer customized packages on festive occasions in different countries and ensure that all our design elements can embody traditional Chinese culture in depth, so that people in these countries can fully understand Chinese zodiac and festival culture.”
With a brand value estimated at about 116.9 billion yuan, Tsingtao Brewery leads China’s beer industry, according to the World Brand Lab, a leading independent consultancy of brand valuations.