Tiger Beer set to pounce on US market

SINGAPORE — The Republic’s Tiger Beer is a roaring success in the region, and it is set to pounce on the US market next.

Heineken - which owns Tiger following its S$7.9 billion acquisition of Asia Pacific Breweries (APB) in 2012 - hopes to triple sales volume in the US in five years. Analysts have said the US beer market is somewhat stagnant at the moment, and Tiger will have to position itself creatively to win market share.

The global beer market is a fragmented one, with a growing preference for craft beers amid a wide variety of offerings from macro-breweries like Heineken and Carlsberg. The US, in particular, is a key market for many brewers and Tiger Beer wants to make further inroads there.

Since being launched in 1932, Tiger Beer has grown its international footprint to more than 60 countries.

Mr Kenneth Choo, regional director of Singapore, Indochina & Exports at Heineken Asia Pacific, said: “The US is an important market, with the Asian community growing highly affluent. For example, San Francisco is an important city for us.

“We have not totally fused up our Heineken network, so the volume is small. Certainly we hope to triple our current US volume within the next five years. For China, we are looking at doubling that volume.”

TIGER’S STRONG VOLUME GROWTH IN ASIA PACIFIC

Heineken said Tiger has seen strong volume growth in Asia Pacific - boasting a compound annual growth rate of 33 per cent between 2011 and 2013. Tiger’s volume was 5.1 million hectolitres (mhl) in 2013, up from 4 mhl in 2012 and 2.9 mhl in 2011.

Last year, Vietnam was one of its top performing markets with a 21.8 per cent volume growth. Market research firm Euromonitor International said Tiger’s plan to expand in the US “opens up a path to make it more of a global brand”.

But it will be up against not just the American beers, Budweiser and Miller, but Mexican ones like Corona as well.

Said Mr Amin Alkhatib, an alcoholic drinks analyst at Euromonitor International: “We are talking about one of the biggest markets. Volume-wise, it is the second-biggest market in the world, value-wise it is the biggest market in the world.

“US is also a high margin market. So something like Tiger Beer, if it is positioned as a premium product, Heineken will be getting quite significant margin out of this product. In the US, there has been a trend towards ‘premiumisation’ - the more premium your beer, the more interesting your beer, then you can charge a higher price and US consumers are willing to pay for it. With that, they will be able to expand on that margin.”

HEINEKEN TO PRODUCE, EXPORT STRONGBOW CIDER

There is something else brewing at APB as well. Heineken said that by the end of this year, it will be producing and exporting ciders under the United Kingdom’s Strongbow brand from Singapore - making it the first brewery in Asia to so.

The brewer said the move could help capture market share from other beer makers. It estimates that in five years, ciders will account for 10 per cent of the market in the region, up from the low single-digit share currently. CHANNEL NEWSASIA