China to Become Largest Beer Market by 2017

Editorial Team
Editorial Team
China to Become Largest Beer Market by 2017

China is set to overtake the U.S. as the world’s largest beer market in value by 2017, according to a EuroMonitor International report.

The world’s No.2 economy is already the largest beer market globally in volume terms, serving up more than double the pints compared with the U.S. last year. But now China is heading toward the No.1 crown in value terms as well.

Last year, the Chinese beer market’s value was 79 percent the size of the U.S.’s in fixed U.S. dollar exchange rate terms. Euromonitor forecasts that this figure will grow by 45 percent by 2017, making China the world leader in terms of value sales.

The boom in China’s beer market is thanks to a number of macroeconomic and demographic factors, said Amin Alkhatib, alcoholic drinks analyst at Euromonitor.

Disposable incomes in China are forecast to grow in double-digit terms over 2013 to 2018, meaning more people will be able to afford beer, while the legal drinking age population will see more rapid growth than the U.S. during this same period, according to the report.

Beer pricing on the mainland is set to evolve, with unit prices becoming more affordable and consumers start showing preference for superior brands, Euromonitor said.

“As these new consumers’ incomes increase and macroeconomic conditions improve, brewers will also be able to encourage consumers to trade up,” he added.

In 2013, economy lager in China accounted for 82 percent of the overall beer volume sales, compared with 25 percent in the U.S, highlighting the significant potential for the premium beer segment in this country, said Euromonitor.

Euromonitor highlighted multinational brewers SABMiller and Carlsberg as being well-positioned to capitalize on the growth of the premium beer segment, but they added that brewers shouldn’t dismiss the continued potential in economy lager.

“With ever increasing affordability both within and beyond urban centres, and with the increasing penetration of retailing channels, global brewers can capture a consumer base in provincial China that was previously beyond their reach,” said Alkhatib.

Snow is the most popular beer brand in China, followed by Tsingtao, Yanjing, Harbin and Laoshan, EuroMonitor data showed.

Meanwhile, in terms of sales, China Resources is the largest beer company in the country, followed by Tsingtao Brewery, Belgium-headquartered Anheuser-Busch InBev, Beijing Yanjing and Danish brewing company Carlsberg.

SOURCE: http://www.cnbc.com/id/101874393

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The Editorial team at APAC Outlook Magazine is a team of professional in-house editors led by Jack Salter, Head of Editorial at Outlook Publishing.