China to become largest beer market by 2017

china beer business

China is set to overtake the U.S. as the world’s largest beer market in value by 2017, according to a EuroMonitor International report.

The world’s No.2 economy is already the largest beer market globally in volume terms, serving up more than double the pints compared with the U.S. last year. But now China is heading toward the No.1 crown in value terms as well.

Last year, the Chinese beer market’s value was 79 percent the size of the U.S.’s in fixed U.S. dollar exchange rate terms. Euromonitor forecasts that this figure will grow by 45 percent by 2017, making China the world leader in terms of value sales.

The boom in China’s beer market is thanks to a number of macroeconomic and demographic factors, said Amin Alkhatib, alcoholic drinks analyst at Euromonitor.

Disposable incomes in China are forecast to grow in double-digit terms over 2013 to 2018, meaning more people will be able to afford beer, while the legal drinking age population will see more rapid growth than the U.S. during this same period, according to the report.

Beer pricing on the mainland is set to evolve, with unit prices becoming more affordable and consumers start showing preference for superior brands, Euromonitor said.

“As these new consumers’ incomes increase and macroeconomic conditions improve, brewers will also be able to encourage consumers to trade up,” he added.

In 2013, economy lager in China accounted for 82 percent of the overall beer volume sales, compared with 25 percent in the U.S, highlighting the significant potential for the premium beer segment in this country, said Euromonitor.

Euromonitor highlighted multinational brewers SABMiller and Carlsberg as being well-positioned to capitalize on the growth of the premium beer segment, but they added that brewers shouldn’t dismiss the continued potential in economy lager.

“With ever increasing affordability both within and beyond urban centers, and with the increasing penetration of retailing channels, global brewers can capture a consumer base in provincial China that was previously beyond their reach,” said Alkhatib.

Snow is the most popular beer brand in China, followed by Tsingtao, Yanjing, Harbin and Laoshan, EuroMonitor data showed.

Meanwhile, in terms of sales, China Resources is the largest beer company in the country, followed by Tsingtao Brewery, Belgium-headquartered Anheuser-Busch InBev, Beijing Yanjing and Danish brewing company Carlsberg.

 

 

 

Source : CNBC.com | August 1, 2014

Thomas D’Innocenzi

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About thomasdinnocenzi

Thomas D’Innocenzi is a highly accomplished, results-focused international consultant with extensive experience in global sourcing and business development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global marketing and sourcing operations. He has extensive experience in international business development to accommodate rapid growth. Skilled in building top-performing teams, bench-marking performance, and developing organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. Tom founded Nova Advisors with the mission of providing expert Global Business Development consulting services for companies seeking to expand their market share as an independent consultant. Tom has a network of experts and advisors throughout the Asia-Pacific region and North America. His expertise includes business development, global sourcing, manufacturing, commodities, logistics, QA/QC, FDA, regulatory compliance, sustainability, and supply chain optimization. Tom is experienced in the medical device, apparel, consumer goods and technology services verticals helping companies advance their global sourcing capabilities and develop new markets through a local and sustained approach. Located in SE Asia and the United States, Tom expands market reach to drive sales. His global sourcing strategy includes directly negotiating with commodity suppliers, supply chain networks and distributors for optimal terms based on his expertise and first-hand knowledge of the players. Contact Tom to use his consulting service to increase your global market and make global sourcing profitable for you in the Asia Pacific Region and the United States. http://www.NovaAdvisors.com thomas@NovaAdvisors.com USA Direct: +1.904.479.3600 SINGAPORE: +65.6818.6396 THAILAND: +662.207.9269
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