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 senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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