China’s beer market, the world’s biggest by far, grew 29 percent by volume in the five years to the end of 2011 to reach 50 billion litres for the first time.
According to research
at Mintel, the market also grew 63 percent by value over the same period to reach RMB454 billion (US$71bn) with the average value per litre rising by 27 percent since 2007.
More significantly, says Mintel, beer volume sales growth accelerated in 2011, rising year-on-year to 2011 by 12 percent compared to only 6 percent in 2010, pointing to renewed consumer interest in the consumption of beer.
Matthew Crabbe, director of China research at Mintel, said: “China is where the leading multinational brewing groups are hoping to make the most growth these days, compared to relatively flat established markets elsewhere and the continued growth in sheer scale is a key factor in that interest.
“With continued rapid rises in average incomes and the general feel-good factor about China’s continued economic growth, consumers are not only drinking more beer, but are also beginning to drink more expensive beers. Consumer confidence has also translated into more people going out to eat, and this caused catering sales to continue to see an increase in significance to overall beer sales compared with retail sales.”
With beer consumption of 50bn litres, China is easily the world’s largest market and now more than double that of the US with 24bn litres. Brazil consumes 14bn litres, while Russia and Germany each consume 9bn litres.
In China, lager beer accounts for sales of RMB410bn ($64.5bn), draft beer for RMB42bn ($6.6bn) and other beers for RMB2bn ($314m).
As growth of beer consumption increase in 2011, so the growth of wine consumption has slowed: from 52 percent in 2010 to 12 percent last year.
Crabbe commented: “While the market is booming, brewers need to compete more cleverly than ever before in order to engage with key consumer groups in China who will be key purchasers in the coming years, including the youth and women’s markets, as well as connoisseur drinkers of premium beers. The recent drop in growth of wine and spirits sales could leave room open for high-end ‘snob-brews’ to find new interest. Indeed, the fact that wine and spirit sales have dropped, despite having enjoyed really strong recent growth, makes it the perfect time for premium beers to press the right kind of new interest buttons of the ever-fickle Chinese brand- and image-conscious consumers.”
While China leads in volume growth it is still the US that leads in new product development, with 22 percent of new launches globally in 2011, followed by Finland with 7 percent, the UK with 6 percent, China at 5 percent and France at 4 percent.
Said Crabbe: “Increasingly competed between the leading beer groups, China’s beer market still needs to see more innovation in products, packaging, regional and national branding and engagement with consumers, in order to maintain per capita growth, and encourage sales of more premium beers.
“Although beer companies have recently been more actively pursuing the youth market, few have really engaged with female consumers as a group in their own right, and who represent a key growth consumer group. Older and wealthier consumers are increasingly becoming ‘connoisseurs’ of premium beers, but mostly for imported brands, and there is potential to premiumize local brands, especially regional favourites.”