Tag Archives: developing countries

BRIC’s and Beer

20 Oct

As Germany’s infamous Oktoberfest winds down to a close, I find it appropriate to reflect on one of my favorite subjects: beer. After water and tea, beer is the third most popular beverage in the world, and one of the oldest prepared beverages – evidence of beer brewing, accidental or not, pre-dates written history by millennia. I find it particularly interesting to think about the challenges modern brewers face in marketing and distributing beer in such a competitive market, especially in some of the world’s largest populations and economies: the BRICs.   

A recent Businessweek article profiled the push by Budweiser, Anheuser-Busch InBev’s flagship brand, into Brazil. Interestingly enough, Brazil is the birthplace of the majority of the parent company’s board, and is the world’s fourth largest beer market by volume.  The annual per capita consumption of beer in South America’s largest country was 47.6 liters, according to Japanese brewer and holding company Kirin; seeing as how per capita consumption for the top 20 most fervent beer drinking markets is at least 59.6 liters, Budweiser and its competitors must be licking their chops at the opportunity to convert more Brasileiros from drinking caipirinhas to drinking cervejas.

In Russia, unsurprisingly, beer takes second place to vodka as the most popular alcoholic drink, and many consumers view beer not as an alcoholic beverage, but rather as a soft drink. Still, Russians consume on average 58.9 liters per capita.  Presently, the market is dominated by domestic brewer Baltika(now owned by Carlsberg), while AB-InBev’s Budweiser controls just 0.5% of the market. Though thirsty Russians may prefer vodka to beer, they still consume enough to make it the world’s third largest beer market, according to Kirin.

The Indian beer market dates back to the early days of the British Empire, when porters and the appropriately named India Pale Ales were exported to the subcontinent. According to the Institute of Alcohol Studies, the number of Indians consuming alcohol has increased from 1 in 300 to 1 in 20; even though alcohol consumption has grown rapidly, as marketers increase their efforts, beer accounts for only 10% of all alcohol consumed. What is the most popular beer in India? Kingfisher – roughly 1 out of every 3 bottles of beer sold in India is this lager, brewed by Bangalore-based United Breweries Group.

China, the world’s largest country by population, is unsurprisingly one of the fastest growing markets for beer in the world. China is already the world’s largest beer market by volume, yet per capita consumption – 22.1 liters – doesn’t even warrant the country a place in Kirin’s ranking of 35 beer-drinking countries.  As Madison Avenue advertisers and their international brethren refine their offerings for the Chinese market, one can imagine that it will only be a matter of time before the Chinese catch up to Western beer drinkers. Will foreign breweries be able to successfully infiltrate the notoriously difficult to navigate economy of China?  Yes, but not organically; CR Snow, a joint venture between SABMiller and China Resources, brews Snow, which eclipsed the domestic beer Tsingtao as the market leader for the first time in 2006.

Tastes vary among cultures and country to country, but there is no denying the investments that the world’s largest breweries are making to court those in the largest developing countries. The American image abroad hasn’t exactly been spotless in recent years, but what about American brands? According to Chris Buggraeve, AB InBev’s Chief Marketing Officer, American values resonate globally, even if American politics don’t. “It [Budweiser] doesn’t stand for America. It stands for deep American values that are extremely relevant worldwide,” he says. Cheers to that.