Budweiser APAC bets on post-COVID China thirst for premium beer

China Resources Beer Holdings

02/03/2023 05:46

BEIJING, March 2 (Reuters) - Budweiser Brewing Co APAC
 1876.HK , Asia's largest beer company by sales, said on
Thursday it will 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.
    The Asia-Pacific unit of brewer Anheuser-Busch InBev
 ABI.BR  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.
    "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  0168.HK , China Resources Beer (CR)  0291.HK  and
Beijing Yanjing Brewery  000729.SZ  have launched new products
with higher prices, targeting younger consumers. 
    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 edged rose 2.4%
to $6.79 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.
      

 (Reporting by Sophie Yu and Tony Munroe; Editing by Stephen
Coates)
 ((Sophie.Yu@thomsonreuters.com; 861056692136;))