Beer brewers hoping to strike it big in Asia

SINGAPORE – It is the world’s third most popular drink after water and tea - and it’s growing in popularity in Asia. The beer market in this continent was worth an estimated US$156 billion (S$195 billion) in 2013 and is forecast to hit US$220 billion by 2020, according to Transparency Market Research.

That is an annual growth rate of 5 per cent in Asia, faster than the rest of the world.

Since 2007, the Asia-Pacific has out-drunk Europe and the Americas to become the biggest beer-drinking continent. According to Euromonitor, Asia downed 72 billion litres of beer in 2013, ahead of the Americas’ 58 billion litres and Europe’s 51 billion litres.

China accounts for more than 70 per cent of all the beer consumed in Asia. Japan at 9 per cent is a distant second while Vietnam (4 per cent) and India (3 per cent) are third and fourth, respectively. South Korea (2.8 per cent) is fifth.

On average, a Chinese person of legal age drank 47 litres of beer last year - less than the 59 litres the typical Japanese person consumed. But both are well below the 175 litres for a Czech person, the world’s biggest drinkers, which analysts suggest shows there is still plenty of room for growth of the market in Asia.

“Beer has yet to reach saturation point. The growth prospects are probably because we still have a large market that still does not consume beer,” said Mr Jason Wong, a research analyst at Euromonitor.

Growth in mature markets like Singapore, Thailand and the Philippines are expected to flatten or fall in the coming years. But Asia’s thirst for beer is being whetted by countries like Indonesia, Vietnam and India, where the markets are projected to grow between 8 and 10 per cent a year.

What is brewing in these countries? A combination of rising incomes, rapid urbanisation and population growth, said Mr John Botia, Managing Director of Carlsberg Singapore. “Possibly the best example is India, where in the next three to five years you’ll see another 100 million people come through to legal drinking age - in other words, coming into the alcohol market,” he said.

LOCAL LIQUOR

In the beer market, local brands are important and Asia is no different. People drink the beer they know and grew up with. In Singapore, the top selling beer is Tiger beer; in the Philippines, it is San Miguel; and in Japan, it is Asahi.

In recent years, global giants like Carlsberg and Heineken have bought or partnered with local brands to boost their market shares and, at the same time, introduce premium brands to consumers who are ready to trade up. However, there is a limit to “premiumisation” - as incomes grow and tastes change, wine and spirits are taking the fizz out of the beer market.

Another threat is regulation. Said Mr Wong: “We’re seeing a lot of pressure from the World Health Organisation - they’re pressuring governments to increase excise taxes, make advertising stricter, so there’re looking at ways to basically make consumption more difficult.”

Still, analysts said if brewers come up with the right formula, they could be tipped for an Asian beer bonanza.

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