Beer in Hong Kong, China

PRE-COVID-19 PERFORMANCE

Beer sales plummet in response to widespread social unrest

Recent social unrest and protests have hit beer sales hard in Hong Kong. Sales of mid-priced lager were particularly affected due to their widespread popularity and large consumption in Hong Kong.

Changing consumer behaviour negatively impacting demand

While beer is likely to naturally rebound in the second half of 2020 following the impact of protests in 2019, the overall decline within the category is expected to continue. The customer base for beer has been shrinking, with less consumers from younger generations drinking beer nowadays as they perceive it as an ‘old-fashioned’ beverage with a heavy taste and are therefore switching to other types of drinks like wine and spirits, and which are trendier and lighter like cider.

Strong brand awareness and marketing key to success of international players

International producer Carlsberg remains strongly positioned within beer in Hong Kong. Over the last few years, Carlsberg group adopted its SAIL’22 strategy which prioritises growth in Asia, Traditionally, the company has offered a wide portfolio of famous brands in different price segments suiting the tastes of different consumer groups in Hong Kong (eg Carlsberg, Asahi, Guinness and Skol).

2020 AND BEYOND

COVID-19 impact

On-trade volume sales within beer are now expected to plummet by 44% in 2020 in light of the impact of COVID-19. This represents a major decline from the 2% increase forecast for 2020 during our research conducted in May 2019, before the spread of the virus.

Affected products within beer

While price sensitive consumers are likely to trade down in spirits and wine, as these categories have higher unit prices, they will not necessarily stop buying craft beers or premium lagers, despite any potential economic knock-on effects of the COVID-19 pandemic. Consumers are likely to either opt for quality over quantity or to balance their “beer budgets” by buying some quality beers, as they have developed more sophisticated tastes in recent years with the rise of the craft beer trend, while also consuming some cheaper mainstream lager brands.

Recovery and opportunities

At the height of the lockdown, e-commerce saw a surge in overall sales in general, including for alcoholic drinks, especially via the well-established delivery services of grocery retailers.

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