Beer in China
Euromonitor International's Beer in China market report offers a comprehensive guide to the size and shape of the market at a national level. It provides the latest retail sales data, allowing you to identify the sectors driving growth. It identifies the leading companies, the leading brands and offers strategic analysis of key factors influencing the market - be they new product developments, packaging innovations, economic/lifestyle influences, distribution or pricing issues. Forecasts illustrate how the market is set to change.
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Tables: 87 | Publication date: Feb 2009
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive environment
Product coverage
Dark beer; Lager by origin; Lager by price platform; Low/non- alcohol beer; Stout
Executive summary
A notable new trend in beer is increasing consumption of beer with low sugar and low calorie content. Consumers’ health and wellness concerns are increasing, which is affecting many consumer goods industries. The drinking of beer is a common cause of over-weight, because malt is a key raw material in beer production and contains a lot of starch. In order to keep fit and healthy, consumers, especially women, are tending to prefer low-sugar and low-calories beers. Trade sources indicate that low-sugar and low-calorie beer products are performing very well in the market. For example, Tsingtao Huan Dong, with low sugar and calorie content, and containing active ingredients derived from the sea, has seen a good performance in the market since its launch in May 2007. China Resources also launched a new product, Snow Bei Shuang, in April 2008, which is claimed to be low in sugar and nutritious.
China’s beer sector maintained its rapid growth in 2008, although the increase was slightly slower than in the previous year, due to growing maturity. According to the China Alcoholic Drinks Association, China’s beer sector is the largest in the world in terms of production volume. China’s growing economy and the rising incomes of the Chinese people are the main drivers of the development of China’s beer sector. According to China’s National Bureau of Statistics, average GDP growth in China was around 11% over the review period. As a result, although the sector is gradually heading towards saturation, it still saw double digit growth in 2008.
Due to consumers’ rising disposable incomes and decreasing profit margins on lower end beer products, premium and standard lager have become more popular among both consumers and manufacturers. Rising incomes have driven the consumer foodservice market, and also the development of pubs and bars. The rise in the on-trade channel has boosted the development of domestic premium lager, as consumers are typically not so price sensitive in on-trade outlets. In order to push sales of premium lager products, most of the leading manufacturers have beer sales girls who visit restaurants, and introduce premium lager products to consumers. Leading brands using this technique to promote their premium lager products include the foreign brands Budweiser and Carlsberg, and the domestic brands Tsingtao and Yanjing.
Cost increases hit China’s beer industry in 2008. On 20 June, The National Development and Reform Commission (NDRC) announced a price hike of RMB1,000 per tonne for oil. Moreover, the price of electricity increased by 2.5 cents per kilowatt-hour from 1 July. Energy price increases have led directly to increasing production and transportation costs. In addition to energy price increases, raw materials for beer production, including hops and malt, also experience sharp increases in 2008. Industry sources suggest that hops prices were 170% higher in July 2008 than in the previous. Sharp price rises have put pressure on profit margins for brewers. In order to compensate, brewers are seeking ways to increase unit prices of beer. Trade sources indicate that the unit price of Tsingtao increased by 5% in 2008, while the price of Yanjing canned beer also increased, from RMB1.90 to RMB2.20 per can. Reducing packaging sizes is another method to increase margins. The previous standard packaging was 630-640ml, but 600ml and even 500ml packaging is now more and more popular in the market. Manufacturers have also restructured their product portfolios to increase profit margins. Standard and premium beer account for only 10% of total sales volume, but generate around 50% of total profits in China’s beer sector. Therefore, new product launches and promotions activities have been largely focused on standard and premium beer.
Sales of dark beer and stout are still negligible in China. Due to the bitter taste and higher prices, dark beer and stout are still not widely accepted by Chinese consumers. Although some dark beers and stouts are available in hypermarkets such as Wal-Mart and Carrefour, most sales are through pubs and bars in major cities.
The off-trade is still the main channel for beer sales, accounting for 68% of volume sales in 2008. However, sales through the on-trade are growing faster, due to the strong development of the consumer foodservice market. On-trade beer consumption in major cities like Beijing, Shanghai is much larger than in lower tier cities and rural areas. People in these cities have more opportunities to go to restaurants and have entertainment in pubs and bars, and they are also less price sensitive and can afford the higher price of beer in on-trade channels. However, residents of low tier cities and rural areas significantly outnumber consumers in major cities, thus the off-trade channel still dominates beer consumption. In this channel, small independent grocery outlets account for the largest share, with 66% of total volume sales in 2008. These outlets have schemes in place for returning beer bottles to the brewers, as for many manufacturers, the cost of beer bottles may be higher than the cost of producing the beer itself. This, helps manufacturers to keep prices down, thus consumers benefit from lower prices in independent small grocers.
The most common alcoholic content of lager is 4.0-4.3% ABV, although the Chinese beer sector is tending towards lower alcoholic content beer, of 2.8-3.6% ABV, and in some cases below 0.5% ABV. An increase in consumption among female consumers has made low alcoholic content beer more popular, as they prefer the light taste and are typically not heavy drinkers. Flavoured beer products, like pineapple beer, with a low alcohol content, are popular among women, as they enjoy the fresh taste.
Production, Imports and Exports
According to statistics published by China’s National Bureau of Statistics, beer production volume in 2007 reached 39.3 billion litres. 2007 was the sixth year in which China was the number one beer producer in the world. However, production volume growth in 2007, at 12%, was lower than in 2006, at 15%, which indicates the increasing maturity of the sector.
China is still a net exporter of beer, with export volume almost nine times larger than import volume, while export growth in 2007, at 16%, was also higher than import growth, of 13%. Chinese beer brands such as Tsingtao and Yanjing are popular abroad. The large number of Chinese who study or live abroad have contributed to exports of Chinese beer. The Tsingtao International Beer Festival, which was held in September 2008 after the sailing competition at the Olympic Games, is expected to broaden the influence of Chinese brands and will drive beer exports in that year.
Imported beer sales are very tiny compared to domestic beer sales, at less than 22 million litres in 2008. Because of low beer production costs in China, most multinational brewers choose to build or acquire brewers in China instead of importing their products.
According to Euromonitor International data, total beer consumption volume was 38.8 billion litres in 2007, while apparent consumption from official figures was 39.1 billion litres. The small discrepancy between Euromonitor International’s data and apparent consumption is caused by factors such as spoiled or damaged stock.
Table of contents
ALCOHOLIC DRINKS IN CHINA : MARKET INSIGHT
EXECUTIVE SUMMARY
Slower volume growth due to global financial meltdown
Local spirits production site severely damaged by earthquake
Leading players targeting younger consumers
Specialist retailers become more important
Growth forecast to be slower
KEY TRENDS AND DEVELOPMENTS
Economic uncertainty reduces consumer confidence
Manufacturers target younger male consumers and women
Packaging innovation focuses on “green” and/or “simple”
Considerable company activity in China’s alcoholic drinks industry
Specialist Retailers
Market Merger and Acquisition Activity
Summary 1 Speculated Merger and Acquisition Activity 2007-2008
TERRITORY KEY TRENDS AND DEVELOPMENTS
East China
Mid China
North and Northeast China
Northwest China
South China
Southwest China
MARKET BACKGROUND
Legislation
TAXATION AND DUTY LEVIES
Summary 2 Taxation and Duty Levies on Alcoholic Drinks 2008
Table 1 Typical Wholesaler and Retailer Off-trade Mark-ups by Selected Sectors 2008
Table 2 Selling Margin of a Typical Domestically Produced Beer Brand 2008
Table 3 Selling Margin of a Typical Domestically Produced Wine Brand 2008
Table 4 Selling Margin of a Typical Imported Wine Brand 2008
Table 5 Selling Margin of a Typical Domestically Produced Spirits Brand 2008
Table 6 Selling Margin of a Typical Imported Spirits Brand 2008
OPERATING ENVIRONMENT
MARKET INDICATORS
Table 7 Retail Consumer Expenditure on Alcoholic Drinks 2003-2008
MARKET DATA
Table 8 Sales of Alcoholic Drinks by Sector: Total Volume 2003-2008
Table 9 Sales of Alcoholic Drinks by Sector: Total Value 2003-2008
Table 10 Sales of Alcoholic Drinks by Sector: % Total Volume Growth 2003-2008
Table 11 Sales of Alcoholic Drinks by Sector: % Total Value Growth 2003-2008
Table 12 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: Volume 2008
Table 13 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: Value 2008
Table 14 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: % Volume 2008
Table 15 Sales of Alcoholic Drinks by Sector by On-trade vs Off-trade Split: % Value 2008
Table 16 Sales of Alcoholic Drinks by Region: Total Volume 2003-2008
Table 17 Sales of Alcoholic Drinks by Region: Total Value 2003-2008
Table 18 Sales of Alcoholic Drinks by Region: % Total Volume Growth 2003-2008
Table 19 Sales of Alcoholic Drinks by Region: % Total Value Growth 2003-2008
Table 20 Company Shares of Alcoholic Drinks by Global Brand Owner 2004-2007
Table 21 Off-trade Sales of Alcoholic Drinks by Distribution Format: % Value Analysis 2008
Table 22 Off-trade Sales of Alcoholic Drinks by Sector and Distribution Format: % Volume Analysis 2008
Table 23 Forecast Sales of Alcoholic Drinks by Sector: Total Volume 2008-2013
Table 24 Forecast Sales of Alcoholic Drinks by Sector: Total Value 2008-2013
Table 25 Forecast Sales of Alcoholic Drinks by Sector: % Total Volume Growth 2008-2013
Table 26 Forecast Sales of Alcoholic Drinks by Sector: % Total Value Growth 2008-2013
Table 27 Forecast Sales of Alcoholic Drinks by Region: Total Volume 2008-2013
Table 28 Forecast Sales of Alcoholic Drinks by Region: Total Value 2008-2013
Table 29 Forecast Sales of Alcoholic Drinks by Region: % Total Volume Growth 2008-2013
Table 30 Forecast Sales of Alcoholic Drinks by Region: % Total Value Growth 2008-2013
DEFINITIONS
Sources
Summary 3 Research Sources
LOCAL COMPANY PROFILES - CHINA
BEIJING YANJING BREWERY CO LTD - ALCOHOLIC DRINKS - CHINA
STRATEGIC DIRECTION
KEY FACTS
Summary 4 Beijing Yanjing Brewery Co Ltd: Key Facts
Summary 5 Beijing Yanjing Brewery Co Ltd: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 6 Beijing Yanjing Brewery Co Ltd: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 7 Beijing Yanjing Brewery Co Ltd: Competitive Position 2007
CHINA RESOURCES ENTERPRISE CO LTD - ALCOHOLIC DRINKS - CHINA
STRATEGIC DIRECTION
KEY FACTS
Summary 8 China Resources Enterprise Co Ltd: Key Facts
Summary 9 China Resources Enterprise Co Ltd: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 10 China Resources Enterprise Co Ltd: Competitive Position 2007
COFCO WINES & SPIRITS CO - ALCOHOLIC DRINKS - CHINA
STRATEGIC DIRECTION
KEY FACTS
Summary 11 COFCO Wines & Spirits Co Ltd: Key Facts
Summary 12 COFCO Wines & Spirits Co Ltd: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 13 COFCO Wines & Spirits Co Ltd: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 14 COFCO Wines & Spirits Co Ltd: Competitive Position 2007
HARBIN BREWERY GROUP LTD - ALCOHOLIC DRINKS - CHINA
STRATEGIC DIRECTION
KEY FACTS
Summary 15 Harbin Brewery Group Ltd: Key Facts
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 16 Harbin Brewery Group Ltd: Competitive Position 2007
HENAN JINXING BREWERY GROUP - ALCOHOLIC DRINKS - CHINA
STRATEGIC DIRECTION
KEY FACTS
Summary 17 Henan Jinxing Brewery Group: Key Facts
COMPANY BACKGROUND
PRODUCTION
Summary 18 Henan Jinxing Brewery Group: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 19 Henan Jinxing Brewery Group: Competitive Position 2005
HUBEI SANXIA DAOHUAXIANG DISTILLERY - ALCOHOLIC DRINKS - CHINA
STRATEGIC DIRECTION
KEY FACTS
Summary 20 Hubei Sanxia Daohuaxiang Distillery: Key Facts
Summary 21 Hubei Sanxia Daohuaxiang Distillery: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 22 Hubei Sanxia Daohuaxiang Distillery: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 23 Hubei Sanxia Daohuaxiang Distillery: Competitive Position 2007
SICHUAN JIAN NAN CHUN (GROUP) CO LTD - ALCOHOLIC DRINKS - CHINA
STRATEGIC DIRECTION
Summary 24 Sichuan Jian Nan Chun (Group) Co Ltd: Key Facts
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 25 Sichuan Jian Nan Chun (Group) Co Ltd: Competitive Position 2007
SICHUAN YIBIN WULIANGYE DISTILLERY CO LTD - ALCOHOLIC DRINKS - CHINA
STRATEGIC DIRECTION
KEY FACTS
Summary 26 Sichuan Yibin Wuliangye Distillery Co Ltd: Key Facts
Summary 27 Sichuan Yibin Wuliangye Distillery Co Ltd: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 28 Sichuan Yibin Wuliangye Distillery Co Ltd: Competitive Position 2007
TSINGTAO BREWERY CO LTD - ALCOHOLIC DRINKS - CHINA
STRATEGIC DIRECTION
KEY FACTS
Summary 29 Tsingtao Brewery Co Ltd: Key Facts
Summary 30 Tsingtao Brewery Co Ltd: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 31 Tsingtao Brewery Co Ltd: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 32 Tsingtao Brewery Co Ltd: Competitive Position 2007
ZHEJIANG GUYUE LONGSHAN SHAOXING WINE CO LTD - ALCOHOLIC DRINKS - CHINA
STRATEGIC DIRECTION
KEY FACTS
Summary 33 Zhejiang Guyue Longshan Shaoxing Wine Co Ltd: Key Facts
Summary 34 Zhejiang Guyue Longshan Shaoxing Wine Co Ltd: Operational Indicators
COMPANY BACKGROUND
PRODUCTION
Summary 35 Zhejiang Guyue Longshan Shaoxing Wine Co Ltd: Production Statistics 2007
COMPETITIVE POSITIONING
Summary 36 Zhejiang Guyue Longshan Shaoxing Wine Co Ltd Company: Competitive Position 2007
BEER IN CHINA
HEADLINES
TRENDS
Production, Imports and Exports
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR BACKGROUND
Lager price band methodology
Summary 37 Lager by Price Band 2008
Published data comparisons
SECTOR DATA
Table 31 Sales of Beer by Subsector: Total Volume 2003-2008
Table 32 Sales of Beer by Subsector: Total Value 2003-2008
Table 33 Sales of Beer by Subsector: % Total Volume Growth 2003-2008
Table 34 Sales of Beer by Subsector: % Total Value Growth 2003-2008
Table 35 Sales of Beer by On-trade vs Off-trade Split: Volume 2003-2008
Table 36 Sales of Beer by On-trade vs Off-trade Split: Value 2003-2008
Table 37 Sales of Beer by On-trade vs Off-trade Split: % Volume Growth 2003-2008
Table 38 Sales of Beer by On-trade vs Off-trade Split: % Value Growth 2003-2008
Table 39 Beer: Production, Imports and Exports: Total Volume 2002-2007
Table 40 Beer Exports by Country of Destination: Total Volume 2002-2007
Table 41 Beer Exports by Country of Destination: Total Value 2002-2007
Table 42 Beer Imports by Country of Origin: Total Volume 2002-2007
Table 43 Beer Imports by Country of Origin: Total Value 2002-2007
Table 44 Company Shares of Beer by National Brand Owner 2003-2007
Table 45 Company Shares of Beer by Global Brand Owner 2003-2007
Table 46 Brand Shares of Beer 2004-2007
Table 47 Forecast Sales of Beer by Subsector: Total Volume 2008-2013
Table 48 Forecast Sales of Beer by Subsector: Total Value 2008-2013
Table 49 Forecast Sales of Beer by Subsector: % Total Volume Growth 2008-2013
Table 50 Forecast Sales of Beer by Subsector: % Total Value Growth 2008-2013