The Pernod Ricard team were in London today (February 18) to flesh on the bones for their half year interim results which were announced last week.
At times it appears premium drinks only move from west to the east. The Asian thirst for cognac, whisky and claret is seemingly unquenchable. But in recent years a number of Asian beer brands have begun to swim against the eastern current, hoping to establish themselves on western shores. To many outside of Asia, brands such as Kingfisher, Chang, Asahi and Tiger have a familiar ring, but are still viewed as niche imports or ‘restaurant beers’. By playing up to the ‘speciality beer’ tag Asian beer brands may have gained a market footing, but if the proposition is one-dimensional, footholds can easily become pigeonholes.
“We don’t want Chang to be a beer that’s consumed just with Thai food – we want it to be a recognised choice within the broader market,” says David Lind, vice-president of marketing at International Beverage, owner of Chang. “In western markets we seeded the brand in the Thai restaurant channel but now we’ve introduced draft beer in a couple of markets and we’re starting to move more into retail to be accepted as a mainstream choice. In export markets we used to be all about Thailand. This year we’ve tried to break out of that and have more of an emotional, lifestyle connection with consumers.”
For Chang, founded in Thailand in 1991, its international expansion is not just in the west. Alongside the UK (which grew 28% in volume terms last year) and Sweden (+273%), the brand is burgeoning in Australia (+56%), Hong Kong (+28%) and the nearby ASEAN region (+53%) – which comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar Philippines, Singapore and Vietnam.
“Just as Sapporo’s done in America – where it is at 3 million cases [a year] – we’re beginning to do in Australia where we’ve moved into the broad market rapidly,” says Lind. “We’re distributed in Woolworths, the largest retailer, and we’re introducing draft there. We’re also looking to spill over from Thailand into the bordering ASEAN countries.”
Tiger, a Singaporean brand brewed across 10 Asian countries and distributed in 40 markets, currently ships 20% of its beer to outside of Asia. It was one of the trailblazers of the trend.
“For more than 10 years now, the western markets have seen an inclination for unique premium brands,” says Edmond Neo, group commercial director, Asia Pacific Breweries. “Tiger beer offers a sense of uniqueness for the consumer seeking an alternative to mass brands.”
It’s fair to say the trend in beer is away from mass-produced brands and towards quality. Certainly the craft movement witnessed in recent years in the west is a reaction to the consumer boredom of commodity beer, but do smaller imported brands benefit in the same way? Chang’s Lind answers: “They’re similar trends in the sense that people are moving away from the big, domestic, basic beers and want to try something new and different. What craft and Asian imported beers offer is different, but I see them growing together as consumers seek out new categories, brands and flavours.”
Kingfisher, the flagship brand of India’s United Breweries, sees the interest in imported speciality beers as a global trend. The brand is currently available in some 50 countries and is brewed in India, the UK, US, Australia and New Zealand, where it has found “extremely promising growth”.
“We believe there is a growing segment of “international speciality brands” in every country,” says Shekhar Ramamurthy, deputy president of United Breweries.
At Kingfisher, communicating the Indian message remains its principal strategy for wining over consumers. “Kingfisher’s Indian identity is key to the brand’s success,” continues Ramamurthy. “Consumers around the world are increasingly viewing Kingfisher as a ‘global brand of Indian origin’. We definitely use this in our brand activities, especially in linkages to Indian food.”
Asahi Super Dry is another brand which sells from the national heritage platform, but the message is more sophisticated to include the liquid in the bottle. “The key to the brand’s success both domestically and internationally is its identity as Japan’s number one beer, its karakuchi [dry] taste and its high quality,” says Ryoichi Kitagawa, general manager of the Asahi Group’s International Business Section.
“We communicate those characteristics through cool, cosmopolitan imagery in our major markets around the world.” It seems to be working. The group reports that Asahi Super Dry sells in 80 countries and has usurped Heineken as the leading premium beer in South Korea, while strong growth has also been seen in Australia and Hong Kong.
In volume terms, Asahi is the world’s 19th largest beer brand (Canadean 2012) – but at the moment that is largely down to the 38% share it claims to enjoy in its home market. Its international sales stand at just 3%. But the Asahi Group has big plans. “We aim to establish Asahi Super Dry as the number one premium beer brand from Asia,” says Kitagawa.
Domestic hegemony can often fuel the ambition to go global. But the need for large companies to mitigate the risk of a one-market business model is also significant. Chang’s successes on foreign shores sre helping to stabilise total volume sales, which stood at -3% last year. The company remains largely a domestic brand, with about 92% of its volume consumed within its borders.
“We are facing a few challenges locally, such as increased competitor activity (domestic and import) and a consumer move towards lower-alcohol beer,” says Lind. “We are addressing this, but we look at international growth as an ‘and’ rather than an ‘or’ alongside our domestic growth strategy. Expansion overseas reduces risk of dependency on one major market, but the domestic market is still critical for us.”
Chang also sponsors the English Premier League football team Everton FC, which on the surface appears to represent a tapping into the English market, but really it’s a domestic lever. “Ninety per cent of the benefit lies in Asia,” says Lind. “We’re a big brand here and the popularity of the Premier League is phenomenal.”
For similar reasons the brand has also signed deals with the Spanish clubs Real Madrid and Barcelona. “We also sponsor the Thai national team, the local league and the coaching of grassroots football,” says Lind.
Tiger is another on the football trail. “Wayne Rooney was the ambassador for Tiger Street Football in 2011 and this year Edgar Davids assumes the role to elevate the spirit of the sport in several Tiger beer markets such as Singapore, Thailand, Malaysia, China and Vietnam,” says Tiger’s Neo.
In India, United Breweries controls more than 55% of the Indian beer market and Kingfisher, in all its many guises, is the kingpin of the category. Its market share is also rising, according to Euromonitor International, thanks to the performance of Kingfisher Ultra and Kingfisher Blue.
The research agency also reports that the market’s largest players, Kingfisher Strong and Kingfisher Premium Lager, showed double-digit growth last year which has “widened the gap between the company and its nearest rival, SABMiller India”.
For Ramamurthy, it is United Brewery’s ability to “connect with consumers” and “service the market” that has brought it domestic dominance. “Having a manufacturing base in all the major states is key to market coverage and profitability,” he says.
Whether Asian beer brands can repeat the domestic trick and reign in the global arena will come down to their success at recalibrating consumer perception. Significant global sales require sophisticated marketing and prolonged investment – Budweiser, Heineken and Carlsberg were all domestic brands once. Certainly Chang and Asahi are on the right road. It seems they’ve realised the need to climb out of the pigeonhole to get to the wider market.