| Beer
goes from strength to strength
- 25 Jun 2004
Author: Natasha Cazin
The
beer industry remains in fairly good shape, with volume sales
up by 2.2% in 2003. Growth is mainly being driven by the increasing
importance of developing markets, such as China and Russia,
underpinned by increasing disposable incomes, rising living
standards and greater levels of foreign investment, mainly
in the form of strategic alliances with local manufacturers.
Indeed, China has now overtaken the US as the worlds
largest beer market, with total volume sales increasing by
41% over the review period.
In
the mature regional markets of Australasia, North America
and Western Europe, as well as parts of Asia-Pacific, brewers
have been struggling to achieve volume growth. This is due
to a combination of weakened consumer confidence (particularly
in the US and Japan) and changing consumption habits, particularly
amongst younger consumers, who are increasing opting for alternative
drinks, such as FABs, over traditional lagers and dark beers.
Most of the major breweries are therefore placing an increased
focus on premium beers, making them more visible and more
widely available in both retail and on-trade channels.
Imports
on the up
In
the UK, for example, 2003 saw the demise of Heineken Cold
Filtered to be replaced by a 5% abv genuinely imported version.
Scottish & Newcastle also announced its intention to cease
production of several of its economy lager brands, including
Hofmeister and Kestral Pilsner, as well as its McEwans
standard lager and Courage Light standard ale brands, in order
to focus on the premium segment of the market.
In
the US meanwhile, premium imported lagers such as Corona Extra
and Heineken continued to perform strongly in 2003, despite
the recent economic downturn.
Light
beers carry weight
Another
underlying trend in the beer market over the 1998/2003 period
was the rise of "light beers". This tendency was
particularly pronounced in the US, where Bud Light was the
best-selling beer in 2002, having supplanted its older sibling,
Budweiser, in the previous year.
Many
US consumers continue to eschew full-calorie beers for their
reduced calorie counterparts in an effort to control their
waistlines. The latest idea is to reinvent light beers as
"low-carbohydrate" beers, with Michelob Ultra leading
the way.
Another
developing trend is the increase in niche and speciality beers.
These essentially are the products of microbreweries with
the emphasis on the use of natural ingredients and traditional
brewing techniques, and the absence of chemicals associated
with large-scale production. Amongst speciality brews, wheat
beers were one of the fastest growing product types in 2003,
albeit from a very small base.
Consolidation
continues apace
The
global brewing industry has been going through a period of
unprecedented change in recent years, with a burst of corporate
activity in 2003. The acquisitions of BBAG by Heineken, Birra
Peroni by SABMiller and Gabriel Sedlmayr Spaten-Franziskaner
Bräu KGaA (Spaten) by Interbrew have highlighted the
apparent urgency of the leading players to build scale in
order to remain competitive.
The
most recent shake-up occurred in March 2004 when Interbrew
announced that it had agreed to merge with South American
brewing giant AmBev. The combined entity will be the largest
brewing company in the world by volume, displacing Anheuser-Busch.
The merger represents a good geographic fit, as AmBev is very
well placed throughout South America and is beginning to position
itself in the Caribbean, while Interbrew is strong in European
and North American markets - especially in Canada and Mexico
- and in Asia.
In
terms of brands, Budweiser remains the worlds biggest,
followed by Bud Light and Skol. Of these, Bud Light was the
only one to gain share in 2002, thanks to its superior brand
equity, marketing and wholesaler execution. Indeed, the brand
may well overtake Budweiser to become the leading global beer.
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