Global beer brewers looking for growth and profit take advantage of the demand for premium beer by cosmopolitan Chinese consumers. (Photo : REUTERS)
Global brewers are taking advantage of the growing demand of cosmopolitan Chinese consumers for high-end beers, a trend which could give global brewing giants more profits in the world’s largest beer market, Shanghai Daily report.
According to the report, international beer brands could find growth in China, which account for half of the industry's global volume increase last year.
Deutsche Bank analysts, however, said that although China drinks a quarter of the world's beer, brewers profit only 3 percent from the sales.
"The premium segment will be an important battleground for brewers going forward because it will be the main growth driver," Shanghai-based Rabobank analyst Katharine Song said. "Brewers are adjusting their strategy to focus more on high-end products."
The report said that volume and distribution networks have been recently driving global industry consolidation through larger deals and crushing margins.
Industry data showed that in 2004, about half the world market by volume was controlled by the biggest 10 brewers, with 47 percent of volumes and three-quarters of profits controlled by just four brewers: AB InBev, SABMiller, Heineken and Carlsberg.
However, with the planned $100-billion-plus takeover of SABMiller by AB Inbev, the number of major brewers in control of the world market is soon to drop to three, the report said.
The report said that the country's 1.4 billion consumers now want more tailored and individual products from fast food to travel, which explains the focus to premium products.
By the end of 2020, premium beers are expected to make up over a third of the $80 billion Chinese market, compared with under 10 percent in 2010.
Last year, imported high-end beers saw a 60-percent jump as consumers splashed out on brews such as Hop Zombie and Armageddon IPA.
A growing number of Chinese beer drinkers are looking for unique taste in beer, the report said.
"I think more and more Chinese customers are about the flavor of the beer itself, and if the beer is unique and rare then they will choose it," said bar owner Chen Jiaqi, who flew to Shanghai from Wuhan to sample a New Zealand craft ale. He added that beer choice is also about individuality.
The report said that the willingness of Chinese customers to spend has attracted small craft brewers such as Scotland BrewDog and New York's Brooklyn Brewery, which have started aiming for the Chinese market.
Euromonitor data showed that premium beer sales grew under 25 percent last year versus 7.5 percent in the overall market.
