Chinese Brewers Look Beyond their Local Market

The largest beer market in the world can be found in the People’s Republic of China, a country where two major brewers compete for the patronage of about half a billion beer drinkers. Until recently, the two national brewing giants, China Resources and the prestigious Tsingtao mostly focused on catering to the vast domestic market with reasonably priced beers; however, both breweries are now interested in expanding their catalogs with premium products, imports and beers destined for overseas markets.

According to a report recently published by the Nikkei Asian Review, both Tsingtao and China Resources are starting to react to the arrival of foreign brewers such as Carlsberg and Anheuser-Busch InBev, which have managed to snag more than 21 percent of the national market. Even though China Resources commands a 25 percent market share while Tsingtao holds 17 percent, their dominance has been slipping.

In the case of China Resources, a brewery that is widely known for cheap brands such as Snow, its first foray into the premium beer market is SuperX, which is priced 400 percent higher than its mainstream products. The company has seen positive reviews and decent sales of SuperX among younger beer drinkers in China, and it is getting ready to market the product overseas; moreover, this brewer is also planning on acquiring the assets and operations of Heineken in China.

With regard to Tsingtao, the goal is to leverage its current brand, which has a respectable presence overseas, by introducing new recipes. The Tsingtao that is widely sold at Chinese food restaurants in the United States is a pale lager; the company recently introduced an ale version that has been received well by Chinese drinkers who like to pair meals with tasty bears. Another interesting move by Tsingtao is a wheat beer that is being tested in the more upscale segments of China.

Even though Tsingtao is considered to be China’s beer ambassador; the company has lost significant market share to China Resources, but it does not intend to compete in the budget beer segment. Tsingtao has won numerous awards at international beer festivals, including the renowned Munich Trade Fair, and this is a prestige that this brewer wishes to capitalize on.

As of 2018, premium beers make up a little more than 10 percent of China’s overall market. Tsingtao is better positioned to dominate this market, but China Resources will not go down without a fight.

Source: https://asia.nikkei.com/Asia300/China-s-top-brewers-try-shake-off-image-of-cheap-beer