E-Malt.com News article: Belgium & China: AB InBev launches Stella Artois to tap into China’s high-end beer market

Belgium-based brewing giant AB InBev has unveiled plans to tap into China's high-end beer market with the launch of its Stella Artois brand in the country, China Daily reported on November, 11.

"We launched Stella Artois in China, for the super premier market," said John Hsu, president of BU North Business of AB InBev, which also makes Beck's, Budweiser, Corona and Harbin.

In China, Stella Artois will retail at 40 yuan ($6.3) for a 330ml bottle, while most beers in the country are under 10 yuan. Hsu said the company will offer unique marketing strategies for Stella Artois, such as targeting private sports car clubs, luxury bars and restaurants.

"We have witnessed rapid economic development in China, as well as increased demand for high-end products," Hsu said.

"AB InBev's launch of the high-end beer brand is aimed at improving the image of the company and its other products," said Gong Bo, an analyst with Beijing-based consultancy and investment firm Gold Valley Investment Co.

Last year, China's beer consumption hit 450 million hectolitres - nearly twice that of the United States. It is expected to grow 5 percent annually over the next few years.

"China is the third-largest market for AB InBev globally, after the US and Brazil," said Hsu. "And the country is the world's largest and fastest-growing beer market by volume. In the next 10 years, volume will increase 62 percent in China, compared with the 5.8 percent volume growth in the US."

Premium draught beers account for just 5 percent of China's overall beer market, compared with 50 percent in developed markets such as France and Germany, and 30 percent in the US, according to Reuters.

Analysts expect premium beer to account for a quarter of China's annual production in five to 10 years, largely driven by rising brand awareness and lifestyle changes as China's wealthy grow in number.

"But so far, high-end beer products are unlikely to make big money as the market share is so tiny," said Gong.

AB InBev entered China in 2008, and now it has more than 30 breweries with over 5 million tons of annual beer output in the country. Last year, the New York-listed company had revenue of $36.3 billion.


12 November, 2011