Brands help drive beer sales in China

19 June 2012

BEIJING: Brands play a more important role than pricing or advertising in fuelling sales of beer in China, a report has suggested.

A survey by Mintel, the research group, found brand and taste were the primary purchase drivers among drinkers, both scoring 25%. Price, by contrast, generated 8%, and advertising posted 1%.

Some 72% of category consumers reported drinking draft beer, with pasteurized beer on 53%, fresh beer or 37%, iced beer on 30%, Weissbier on 28%, fruit beer on 23% and stout on 21%. Low alcohol and alcohol free alternatives received 14% apiece.

The main drinking occasion was socialising with friends and family on 73%, followed by banquets and parties on 62%, entertaining at home on 61%, having a meal on 44% and going out after work on 43%.

Elsewhere, Mintel reported that beer volume sales in the country surpassed 50bn litres for the first time in 2011, a 29% increase during the last five years.

Overall, demand expanded by 12% annually in 2011, bettering the 6% improvement that was recorded in 2010.

As a result of this process, China is now easily the largest beer market in the world, with the US in second on 24bn litres, ahead of Brazil on 14bn litres. Russia and Germany registered 9bn litres each.

Value sales of beer also hit RMB454bn in China last year, a 63% leap since 2007. In this same period, the average value per litre of beer increased by 27%, suggesting a shift towards premium lines.

Lager remains very much the leading segment, currently yielding RMB410bn in annual sales, with draft on RMB42bn and other beers on RMB2bn.

The strength of the beer industry was shown by the fact value sales rose by 13% in 2011, almost double the 7% lift in 2010. By contrast, wine saw its growth rate slow from 52% to 12%, and spirits witnessed a drop off from 24% to 16%.

Innovation is one area for potential progress for brewers, with China accounting for 5% of global product launches in 2011. The US led on 22%, with Finland on 7%, the UK on 6% and France on 4%.

"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," Matthew Crabbe, Mintel's director, China research, said.

Data sourced from Mintel; additional content by Warc staff