South Korea: InBev plans to capitalise on the growing success of its Cass brand

Belgium's InBev plans to capitalise on the growing success of its Cass brand in South Korea to break a stalemate with Hite Brewery and steal market share from the dominant player, Reuters communicated on Wednesday. Brent Willis, InBev's zone president for Asia Pacific, said on September 28 he was going to spend 10 % more in marketing next year to try to break a deadlock that has left InBev's market share stuck at 42 % for the last couple of years.

Willis, who took on the job less than a month ago, said he was ready to consider partnerships if it would help InBev expand through Oriental Brewery (OB), the local brewer 95 percent of which it owns.

"I don't mean selling a stake," he said, during a presentation at the head offices of the world's biggest brewer by volume in this town outside Brussels. "(But) if it means greater synergies to be had and (helping) us meet our targets, sure." Willis said InBev had received requests from different types of investors interested in joining OB. "I think people see it (OB) as a company that is under leveraged," he said. "Breaking out of the status quo has been difficult."

InBev saw Hite become an even more formidable opponent last summer when it acquired Jinro, the country's top liquor maker. Controlling more than half of the market for the traditional "soju" drink, Jinro has given Hite a dominant position in both beer and soju markets thanks to its well-established sales channels and a strong brand name.

Hite is 25 % owned by Denmark's Carlsberg. Willis said a lot was banking on Cass, whose popularity among young adults has seen it grow by 14 percent in volume terms this year in an overall declining market. "One of our keys to success is to continue to win with Cass," he said.

Its other big brand, OB, has fallen 30 percent. Willis said he wanted to expand Cass outside its main market to the north of Seoul and encroach on Hite territory to the south of the capital. He also wanted to improve pricing and packaging to give a boost to its OB brand, which has suffered from a grandfatherly image.

InBev brews about 8 million hectolitres (211,337,641 U.S. gallons) a year in South Korea, which boasts some of the world's heaviest drinkers. Cass is responsible for 3.5 million and OB 2.0 million. 1 hectolitre = 26.41 U.S. gallons.

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