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Budweiser APAC Bets On Post-COVID China Thirst For Premium Beer

By Reuters
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Budweiser APAC Bets On Post-COVID China Thirst For Premium Beer

Budweiser Brewing Co APAC, Asia's largest beer company by sales, said that it plans to expand into more Chinese cities with its premium products as it sees a rebound in demand after the country lifted its COVID-19 curbs.

In December, China suddenly dropped its strict three-year-old zero-COVID policy, which had battered business at bars and restaurants, where Budweiser does a disproportionate share of its sales. Budweiser said its overall China volumes fell 3% last year, and its market share shrank by 44 bps.

"(In China) this quarter we really see strong signals for recovery in the market which is fully opening," Jan Craps, co-chair and chief executive of Budweiser APAC, said in an interview after the company reported annual results.

Premium Beer Brands

The Asia-Pacific unit of brewer Anheuser-Busch InBev aims to increase the number of Chinese cities where it sells at least one million litres of its premium Budweiser brand to 220 this year, up from 201 last year, with the number for its "super-premium" brands, which include Hoegaarden, Blue Girl and Corona, rising to 60 this year, up from 51, Craps said.

Budweiser APAC, which has more than 50 brands, is pinning its hopes for growth in China on the premium segment, which accounts for 16%-17% of the overall beer market, a share the company expects will double.

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"We believe in the next ten years there is big growth potential here," Craps said, citing the 40%-45% market share of premium beer in developed markets.

Budweiser APAC's sales of high-end and above products have more than 40% of the China market, according to a research report by SPDB International.

In recent years major Chinese rivals such as Tsingtao Brewery, China Resources Beer (CR) and Beijing Yanjing Brewery have launched new products with higher prices, targeting younger consumers.

Read More: AB InBev Beats Profit Expectations Despite Selling Less Beer In Q4

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Growth Agenda

A report by Citi on Thursday said the company's growth in 2023 is highly dependent on recovery of premium-segment growth in China.

Zhu Danpeng, a food and beverage analyst and deputy head of the Guangdong Provincial Food Safety Promotion Alliance, said the beer industry in China has entered a fast-growth phase in the premium segment.

"The whole market is growing larger in scale and Budweiser APAC will grow as the leader of this segment," Zhu said.

Revenue for Hong Kong-listed Budweiser APAC rose 2.4% to $6.48 billion in 2022, helped by strong post-COVID consumption recovery in South Korea and India, which offset the impact of widespread restaurant and bar closures in China.

News by Reuters, edited by by ESM – your source for the latest drinks news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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