A-B will boost Budweiser’s availability to 200 county-level cities in China starting this year, doubling its presence from 100 now, the company said in an
e-mailed statement. Counties are China’s smallest cities.

A-B also is extending its Harbin beer to 33 new cities in China, along with its imported Corona beer from Mexico, to attract drinkers willing to pay more for overseas brands. A-B is focused on China to reduce its dependence on the U.S., where it gets 65 percent of volume and growth has slowed to about 1 percent a year.
The St. Louis brewer and other companies “are trying to move into the emerging markets and really establish their brands,” said Tom Leritz, a portfolio manager at Argent Capital Management in Clayton. A-B is anticipating “the time when people in those regions become wealthy enough … to buy more beer.”

China contributed 45 percent of the growth in international beer volume over the last five years, according to A-B, which operates 14 breweries in China. Last year, A-B’s volume and profits grew at double-digit rates in China.

International brewers are again targeting China’s high-end market after efforts to sell more expensive beers failed in the 1990s, when most drinkers preferred cheaper local brands. SABMiller PLC, the world’s sixth-biggest brewer, plans to introduce its Miller brand in China.

China is the world’s largest beer market with 244 million barrels in 2005, according to data by Canadean Ltd. The U.S. is the second-largest at 208 million barrels.

China’s beer sales jumped 16 percent to $10.8 billion in 2006, as rising affluence and increased marketing spurred consumption. Per capita consumption of the beverage will double to 50 liters a year in the next decade from 25 now, Anheuser-Busch forecast. Legal Chinese beer drinkers consume only about one-fourth the quantities U.S. drinkers consume, according to London-based Euromonitor International.

A-B will integrate its Budweiser and Harbin brands, combining promotional budgets, sales and research efforts to make them nationwide brands.

The company acquired century-old Harbin, China’s fifth-biggest brewer, in 2005, and has a 27 percent stake in Tsingtao Brewery Co., China’s biggest brewer.

A-B’s competitors also are moving into China. SABMiller, which makes Pilsner Urquell and Peroni Nastro Azzurro, has been buying companies in China and India to expand. Its China Resources Snow Breweries Co. venture last year beat Tsingtao to become the nation’s biggest brewer by sales.

Carlsberg A/S, the Danish brewer planning to invest as much as $880 million in Asia in the next three years, is seeking acquisitions in China’s eastern regions to help it expand 15 percent annually in the country, Senior Vice President Jesper Madsen said in November.

SABMiller, the brewer behind Pilsner Urquell and Peroni Nastro Azzurro, has grabbed a bigger share of the fast-growing Chinese beer market by acquiring four more breweries for a total of $79 million (£40 million).

China Resources Snow Breweries, in which SABMiller has a 49 per cent stake, has bought controlling interests in two breweries in Liaoning province, one in Anhui and one in Hunan, in separate transactions.

The joint venture is already China’s biggest brewer, with more than 50 breweries. The latest additions, described as “infill acquisitions”, will lift Snow’s volumes by about five million hectolitres to almost 95 million hectolitres.

SABMiller has made no secret of its ambitions to build a greater presence in the country, where beer consumption has risen from 21.4 litres per head to 26.7 litres in the past three years. The total market grew from 280 million hectolitres in 2004 to 351 million in 2006.

In 2006 alone, Chinese firms produced 35 million kilolitres, up 14.7 percent from the previous year and accounting for some one fifth of global beer production, according to Japanese brewer Kirin Holdings.

The amount reflected a 109-percent increase over the past 10 years, while global beer production rose 33,6 percent to 170 million kilolitres in the same period, said a Kirin study.

“Since overtaking the United States as the top beer producer in 2002, China has maintained its position and showed double-digit growth in 2006,” the study said.

“In addition to the improving quality of life in China, resulting from the strong eonomy, the culture of beer drinking has spread from the coastal areas to inner regions,” the study said.

While much of the world is alarmed by global warming, Kirin suggested that climate change may be helping global beer consumption.

“The general recovery of the global economy as well as increasing temperatures are believed to be the main drivers of the increasing production,” it said.

Beer consumption rose particularly in nations with rapid economic growth, while industrial nations saw either moderate growth or shrinking production, it said.

In the United States, the second largest beer brewer, production grew only 0,2 percent to 23,2 million kiloliters, while third-ranked German production fell 0,5 percent year on year to 10,7 million kiloliters.

Production in seventh-ranked Japan also fell by 0,4 percent, amid a falling birthrate, ageing population and increasing choices of beverages, Kirin said.

On the other hand, in the past decade, beer production in Russia and Ukraine nearly quadrupled, while Thai and Vietnamese production jumped by 158 percent and 212 percent respectively, Kirin said. – Sapa-AFP

SHENYANG, July 29 — Chinese people consumed more than 35 million tons of beer in 2006, with per capita consumption of 27 liters, according to the China Alcoholic Drinks Industry Association (CADIA).

China produced 14.4 million tons of beer in the first five months this year, up 16.7 percent from last year’s same period, according to Xiao Derun, an official with CADIA.

China’s total beer output hit 35.15 million tons last year, an increase of 14.7 percent over that of the previous year.

China overran the United States to become the world’s largest beer producer in 2002, and since then its beer output has kept growing by 10 percent annually.

Xiao said the rural and western regions, which see relatively low consumption of beer currently, would be potential driving force of China’s beer industry development in the future.

The London-based brewer’s Chinese venture with China Resources Enterprise Ltd., known as CR Snow, will see the deal add to its leadership position in the two provinces of Liaoning and Anhui, and mark its first move into Hunan province.

The venture is buying two breweries in Liaoning, northeast of Beijing, to add to its existing eight breweries and help to relieve capacity constraints, and one in Anhui, just west of Shanghai, to add to its seven breweries already in the province, SABMiller said in a statement.

It is also buying its first brewery in Hunan, southwest of Shanghai, though its Snow beer is sold in the province.

SABMiller, the world’s second-largest brewer, with brands like Miller Lite, Peroni and Pilsner Urquell, first entered China in 1994 through CR Snow and recently become the nation’s biggest brewer, with over 50 breweries with China’s top beer brand Snow.

Shanghai

Author:www.beertown.org

From May 10 – 12, the Brewers Association (BA) participated in the SIAL China trade show in Shanghai. This marked the BA’s first visit to China and first Export Development Program (EDP) activity within Asia. In addition to a booth at the show, the BA held a beer and food paired dinner for trade and media at the Finestre restaurant on Shanghai’s famous Bund. These efforts were all designed to support US craft beer brands that recently gained entry to the Shanghai market through American Craft Beer Partners, an import company specializing in China market development for US craft beers.

In three short years, the BA’s export development efforts in China have achieved outstanding results. From a market research study in year one, the BA’s efforts have resulted in nearly $60,000 in exports this year from five US craft breweries and distribution to eight establishments in Shanghai. A substantial increase in exports to this market is anticipated as demand for US craft beers in Shanghai and elsewhere in China far outpaces supply. Major retail chains such as Carrefour and Lian Hua are even now expressing interest in adding brands introduced to the market.

The trade show and dinner certainly helped support these efforts. During the trade show, the BA, along with representatives from American Craft Beer Partners, Rogue Ales and FX Matt poured samples for hundreds of interested importers and distributors from throughout the country. After the event, additional samples were sent to a few specific traders seriously looking to add US craft beers to their portfolios. The BA and American Craft Beer Partners continue to follow up on these leads.

The BA’s dinner was co-sponsored by the US Department of Agriculture’s
Agricultural Trade Office in Shanghai and by Taylor Shellfish Farms, a leading Washington State supplier of farmed shellfish. Taylor provided clams, mussels, geoduck and oysters for the dinner, which were paired with an assortment of US craft beers. The dinner attracted over 70 guests including importers, distributors, and media. A small review of the dinner was already published in the Shanghai Daily, the city’s leading English-language newspaper. Additional media coverage of the event and the EDP have appeared in That’s Shanghai magazine. The BA continues to monitor for other press mentions.

As an additional outcome of the event, the BA established solid relations with USDA officials in China that are key to future grant requests for that market. The BA recently submitted a request for nearly $70,000 in funds for China for next year. USDA officials also educated the BA on the importance of trademark registration in China, even for companies not yet doing business in that market. There are many resources available to BA members wishing to register their marks. For more information on the China trip, future plans in this market, trademark registration or other issues, please contact Bob Pease, BA Vice President at bob@brewersassociation.org or Eric Rosenberg, EDP Coordinator at ericr@bryantchristie.com.

IN RUSSIA, beer is regarded as a soft drink and China is now the world’s largest market for it, evidence that brewing executives are looking further afield for sales as the West’s beer consumption declines as drinkers turn to wine and spirits. The smoking ban that starts in English pubs and clubs on Sunday is expected to further hit sales.

But business in emerging markets is booming — with Russians, Chinese and Indians among those thirsty for Western-style beer. Scottish & Newcastle, Britain’s biggest brewer, has already gone East. It formed a joint venture with the Danish giant Carlsberg in Russia — BBH in St Petersburg — and its brew, Baltika, is the market leader and inching closer to replacing Heineken as Europe’s No. 1 beer. Just five years on, BBH accounts for 40 per cent of Carlsberg’s profits and nearly 30 per cent at S&N.

The change is indicative of the shifts in the $US450 billion ($A535 billion) global beer industry. SABMiller’s Chinese beer, Snow, has become its biggest brand, ahead of Miller Lite, brewed in the US. The world’s second-largest brewer brews most of China’s beer, moving ahead of the previous market leader Tsingtao (in which SABMiller’s US rival Anheuser-Busch holds a large stake). Analysts expect Snow to shoot into the world’s top brands behind Budweiser, Skol and Corona.

S&N believes the smoking ban will hit sales by 5 per cent and cut operating profits by £10 million ($A23.7 million). Bans in Ireland and Scotland hit sales by up to 7 per cent.

Market researchers predict that more than a third of the global beer consumption will move to Russia and China. Based on population, China is the world’s largest beer market by volume after overtaking the US in 2002, according to Euromonitor data. Russia leapfrogged Germany last year with 10 per cent market growth that took it to fourth place.

In Russia, beer is regarded as a soft drink and is sold at street kiosks that do not need a licence. “People will drink a beer on the metro on the way to work,” said Nigel Fairbrass at SABMiller. Beer was lightly regulated until recently. Its growing popularity was seen as aiding government efforts in weaning Russians off vodka. Now there are restrictions on advertising, and drinking in public is about to be banned. Carlsberg executive vice-president Jorgen Buhl Rasmussen says: “Russia has a long way to go before it’s like a Western European market.”

Russians drink, on average, about 70 litres each a year. They are vastly outdrunk by the Czechs, who guzzle 160 litres each; the Irish at 124 litres and Germans’ 110 litres. Even Britain is benefiting from the Eastern European thirst for beer. The influx of Polish workers to Britain since the country’s admission to the EU in 2004 has sparked sales of Polish beer. Others are trying to revive Britain’s beer market.

There have been several brewery closures in Britain and family-owned brewers have been sold to bigger companies.

As in Russia and India, there has been a big shift from spirits to beer in China and the big brewers are battling it out. But Euromonitor alcoholic drinks manager Anne Nugent said distribution to China’s far-flung regions was problematic. She said it was going to take some time before Chinese consumption caught up with the West. In Russia, consumption per head jumped from 18 litres in 1997 to 69 litres last year while China went from 14 to 24 litres.

In India, people drink less than a litre of beer a head a year, so the potential for growth is huge. But foreign investors face problems such as electricity shortages and transport delays.

GUARDIAN

Anheuser-Busch (NYSE: BUD) has become the latest in a very long line of large U.S. public companies saying that the future is in China. To make U.S. firms a big success, the Chinese will have to eat a lot of McDonald’s (NYSE: MCD), drink a lot of Starbucks (NASDAQ: SBUX), and shop all day and all night at Wal-Mart (NYSE: WMT).

The boys at BUD say that their overseas sales are only 10% of total sales, but that the figure is growing faster than it is in the U.S.. However, that may be due to the law of large numbers. BUD’s sales outside the U.S. are so small that they should be growing.

Since India is the other huge developing country outside the U.S., BUD does not want to neglect it when mentioning its plans. Reuters quotes management as saying: “We have a very long-term involvement in China, and India is the only other Asian country besides China where we have invested in a brewery.”

Whether the Chinese want to drink beer that is made by outside brewers is not something that will be known for a while, but BUD does face competition from local companies and all of the major beer firms in Europe.

If the Chinese are willing to drink a case of beer per person, the whole thing may just work.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Boulder , CO (July 5, 2007) – The Brewers Association’s mixed container export concept took off in China. In February of 2007 the first ever container of US Craft Beer was exported and since the first shipment the Chinese have liked what they’re drinking.

This inaugural ‘mixed container’ had craft beers from Brooklyn Brewery (New York), North Coast Brewing Company (California), and Rogue Ales (Oregon). These beers are now available in eight on-premise establishments in Shanghai with further distribution anticipated.

Bob Pease, Brewers Association Vice President says, “This first container sale marked the success of the Brewers Association mixed container export concept and it marked the opening of a vast new market for US craft beers. The immediate reaction in-country surpassed expectations.”

Due to the success of this first shipment, in May of 2007 additional shipments were ordered including beers from two additional companies Kona Brewing Company ( Hawaii) and Gordon Biersch Brewing Company ( California). Dan Gordon, Gordon Biersch President says, “It really is remarkable that American craft beer is one of the few American consumer goods that are desired in China. Gordon Biersch is very excited to ship beer to China and I personally plan on working the market.

The mixed container export concept began in 2005 with a research study on China’s craft beer market funded by the United States Department of Agriculture’s Emerging Markets Program, a program funded by the USDA. This study was used by Josh Weiner and Daniel Berkowitz to create the American Craft Beer Partners, a separate business unit of The Longboat Group, solely devoted to exporting US craft beers to China.

The Brewers Association also participated in the 2007 SIAL China trade show, May 7-13, the largest trade show in the world, to host a beer and food paired dinner for trade and media. The Brewers Association plans to return to China for additional promotional activities and work to further develop this emerging market.

For more information on the Brewers Association Export Development Program please visit: http://www.beertown.org/craftbrewing/edp.html.

There are plenty of sporty beer drinkers, but is there such a thing as a sporty beer?
Tsingtao Brewery Co Ltd, the official domestic beer sponsor of the Beijing Games, thinks there is.

Low in alcohol and designed by young trendies, Huan Dong Beer is the new, trim face of Tsingtao, launched on March 28 to coincide with the 500-day countdown to the 2008 Games.

“This new beer is really hi-tech in the way it’s produced,” said Zhang Xueju, vice-president of the company. “It also tastes great.”

Established in 1903, Tsingtao is the oldest brewery in China. Since linking its name to the Beijing Olympics in August 2005, sales of its signature brand have skyrocketed.

Now it plans to reach out to the world through sport while learning some new marketing tricks from other Olympic sponsors.

“Tsingtao Beer aims to become an international company and the Olympic Games is the biggest opportunity for us to achieve that,” said Zhang. “We hope to raise our brand image worldwide by communicating with international customers.”

According to its agreement with BOCOG, it will provide funds, beer products and related services to the Beijing 2008 Olympic Games, the Beijing 2008 Paralympic Games, BOCOG, the Chinese Olympic Committee and the Chinese sports delegation to the Beijing 2008 Olympic Games. It was also the sponsor of Chinese delegation to the 2006 Olympic Winter Games in Torino, Italy.

“When I went to the 2006 Winter Olympic Games in Turin, I saw a lot of activities held by major sponsors like GE and Coca Cola, so I picked up a lot of experience.

“Their Olympic marketing events helped me see things in a fresh light.”

In February, the company also signed a sponsorship deal with China’s phenomenally successful Olympic diving team.

“For us, the significance of the Olympics is that it is for everyone, not just for the well-to-do or celebrities,” said president Jin Zhiguo. “Therefore our marketing activities should stay focused on mass participation.”

The company plans to be the lead marketer at the Summer Games within three years while using the event to raise its international profile.