The rise of the brand-savvy beer consumer

Recent news that two of the ‘big four’ international beer brewing companies - Carlsberg and Heineken - have announced an increase in profits is perhaps unsurprising, particularly as both have made major inroads into the ever-growing Asian beer market in recent years. 

Danish brewing giant Carlsberg has raised its 2010 outlook after reporting a 30 per cent rise in second-quarter profits, while Heineken declared a net profit increase of 29 per cent for the first half of the year. Both brands have partly attributed the rise to sales growth in Asia, fuelled by both the acquisition of local breweries and brands and the rise in popularity of their flagship labels. 

Last year, Asia overtook Europe in beer production levels for the first time, according to a study by the research department of Kirin Holdings Co, the Japanese beer giant. A major increase in beer production in Vietnam helped to fuel the surge with an increase of more than 24 per cent in beer manufacturing over 2009. India followed closely behind with an increase of 12 per cent, while China’s beer manufacturers also collectively increased seven per cent over the past year. 

With the average Asian still consuming less beer than his or her European counterpart, there is still further scope for Asia to continue growing,  good news for the ‘big four’ -  the other two being Anheuser-Busch InBev and  SABMiller - which between them supply nearly half the needs of the world’s beer drinkers. 

Over the past two decades, China’s exponential increase in beer consumption has seen it rise to become the world’s biggest beer market, now a considerable distance ahead of the US. And beer drinking in China is growing fast, by nearly 10 per cent a year, according to Crédit Suisse, meaning it still remains a market with huge potential. 

Across the region, Euromonitor figures show that Snow continued to be the most popular beer in 2009, followed by Tsingtao. 

Vietnam is the country predicted to have the highest growth potential, at 5.6 per cent in the next few years. Some of the world’s largest beer brands, such as Budweiser, Sapporo, San Miguel and Fosters are all now available in Vietnam. Japanese brewer Sapporo Holdings declared its intention to enter the country from early 2012 in a joint venture with Vietnam National Tobacco Corp, while VBL Danang has upped production of its Larue brand, making it available in most Vietnam provinces after healthy volume growth of 25 per cent last year and 50 per cent this year. Indigenous brands are enjoying a surge in popularity, both domestically and abroad where they are gaining international recognition. Hanoi Beer and Saigon Beer were recently chosen to be the official beverages at this year’s prestigious Berlin International Beer Festival. 

With competition growing in the Asian marketplace, Mitchell Tan, business director at Bates 141 Hong Kong, believes marketing approaches will soon change, with traditional brands looking to reaffirm national and legacy values to consumers to ward off new imported challengers: “Perhaps we will see more quality and heritage messages in sector advertising as brands focus on tradition and ingredients of the beer, and consumers become more taste-sensitive and choosy, given their increasing choice.”

This article was originally published in the October 2010 issue of Campaign Asia-Pacific.