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Harbin, Budweiser enjoy double-digit growth

By Zhou Yan (China Daily)
Updated: 2009-10-19 08:52

Harbin and Budweiser beers, two core brands of Anheuser-Busch InBev (AB InBev) China, reached "double-digit" sales volume growth for the summer season, buoyed by the firm's comprehensive marketing initiatives and expanding geographical reach.

"Our aggressive distribution expansion of Harbin brands to untapped regions by using AB InBev's sales network has almost doubled sales increases for the peak selling season in its traditionally strong market in the Northeast," Rex Wong, vice president of marketing and new products for AB InBev China, told China Business Weekly.

Wong said the firm will expand its marketing investment in Harbin to more provinces such as Guangdong, Zhejiang and Hunan. The goal is to reach 187 different markets this year and 200 by 2010, up from 157 markets in 2008.

"We will make it a national beer rather than a local brand," Wong said.

In 2004, what was then Anheuser-Busch took over Harbin Brewery, China's oldest and then fifth-largest brewer, for almost $720 million.

According to research firm Euromonitor International, the total sales volume of Harbin beer grew 5 percent in 2008, to equal the overall market increase rate.

"Its summer sales have surpassed our anticipation of 10 percent in 2009, probably due to its expanding distribution in supermarkets and wider advertising reach geographically," said Joy Huang, Euromonitor's alcohol analyst based in Shanghai.

Huang said Euromonitor expected the overall beer sales volume in China to rise 5.7 percent this year.

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Wong said Budweiser beer, another mainstay brand under Belgium-based AB InBev, also enjoyed "double digit" growth in China in the same period, even though its growth rate was not as strong as Harbin.

"It's not easy for high-end brand Budweiser to have such growth in light of its already established leading position in China," Wong said, crediting the growth to intensive marketing promotions such as the Bud Music Kingdom campaign to attract young consumers.

Euromonitor reported that Budweiser topped China's premium beer market with 46 percent market share in 2008. Euromonitor anticipates the brand will increase by 9 percent in sales volume this year.

"We're now actively seeking dealers and expanding our distribution to penetrate inland and into smaller areas," Wong said.

But analysts said the road to lower-tier cities could be rough.

"Budweiser's main strength is in coastal cities. Small cities and towns are more familiar with local brands, with their low cost and high recognition," Huang said.

Beer market data provider Plato Logic projected per capita beer consumption in China will reach 35 liters per capita in 2010, up from 17.5 liters in 2000.