Beer growth favourable in emerging markets

While the beer industry is struggling - like most others - in a financially challenging market, some beer brands are demonstrating excellent growth. According to Canadean, the key to this growth lies in the market.

Many emerging markets have been favourable for growth as the middle class swells and beer becomes an affordable option. The top 13 fastest-growing brands worldwide, over the last three years, are all found in developing beer markets: China, Mexico, Brazil and South Africa.

China, in particular, has seen constant development. In the report ‘China Beer Market Insights 2013’, Canadean’s Marina Zeng reports on three brewery expansion plans, the inauguration of a new brewery and the announcement of plans for three more breweries just from A-BInBev for 2012 alone.

The top four fastest growing brands are all Chinese and all of their growth stems from their domestic market. Only Tsingtao is available internationally, but over 99% of the brand’s volume is still sold in China, despite Canadean recording measurable volume growth for this brand in 15 other markets.

The top 14 fastest growing brands have all been driven by growth from their domestic market. According to Canadean, several factors make the performance of a beer brand in its domestic market extremely important. These include the traditional high degree of brand loyalty shown by beer drinkers, the longevity of beer brands as well as the often strong links between a brand and national or regional culture. It is common to see a beer referred to as the country’s ‘national beer’ or as the ‘regional beer’ for a certain area.

However, not all the top-performing brands have been driven by their domestic market. The Heineken brand has witnessed growth in several countries, with its performance in Vietnam being particularly notable. According to Canadean, the success in Vietnam can be attributed to the brand’s stylish image along with its distribution network and intensive marketing and promotional activities.

The beer brands that exhibited the best growth have some factors in common: they all have success in their domestic market, a solid brand image, an appropriate price point and an effective distribution. However, each beer market has its own specific dynamic and drivers. The performance of international brands has varied widely in recent years, due to market-specific conditions.