Consumer interest in beer is on the rise in China, according to recent research by Mintel. The company’s Beer - China - May 2012 report showed there was a marked increase in growth in the volume of beer sales in 2011, with 12% volume growth in 2011, compared to only 6% in 2010. Total volume reached an all-time high of 50 billion litres in 2011.
It seems that tastes are changing, too, with the average value per litre of beer sold rising by 27% since 2007, indicating that consumers are choosing higher-value beer products. This has seen the market grow 63% in value terms over the five years to 2011, reaching a total market value of RMB 454 billion.
“China is where the leading multinational brewing groups are hoping to make most growth these days, compared to relatively flat established markets elsewhere and the continued growth in sheer scale is a key factor in that interest,” said Matthew Crabbe, Director of China Research at Mintel.
“With continued rapid rises in average incomes and the general feel-good factor about China’s continued economic growth, consumers are not only drinking more beer, but are also beginning to drink more expensive beers. Consumer confidence has also translated into more people going out to eat and this caused catering sales to continue to see an increase in significance to overall beer sales compared with retail sales.”
Mintel reported that Chinese consumers select beer based equally on brand and taste, with 25% saying these factors are most important when choosing beer. Price seems to be less important, with only 8% citing this as a factor. Surprisingly, Mintel reports that advertising seems to have little impact: only 1% of consumers say advertising is most important when it comes to choice of beer.
“While the market is booming, brewers need to compete more cleverly than ever before in order to engage with key consumer groups in China who will be key purchasers in the coming years, including the youth and women’s markets, as well as connoisseur drinkers of premium beers,” said Crabbe.
“The recent drop in growth of wine and spirits sales could leave room open for high-end ‘snob-brews’ to find new interest. Indeed, the fact that wine and spirit sales have dropped, despite having enjoyed really strong recent growth, makes it the perfect time for premium beers to press the right kind of new interest buttons of the ever-fickle Chinese brand- and image-conscious consumers.”
China’s beer consumption is the largest in the world at 50 billion litres, considerably larger than the US, which comes in second at 24 billion litres. Brazil, Russia and Germany - with 14, 9 and 9 billion litres respectively - come in at third-, fourth- and fifth-largest markets for volume consumption worldwide.