China: Budweiser Brewing Company vows to continue expansion strategy for China
Budweiser Brewing Company APAC Limited has vowed to continue its expansion strategy for China after registering increased revenue in the first half of the year, thanks to rising women consumers and an increasing appetite for the company's premium beer, the China Daily reported on July 29.
The company saw a decline in sales volume as channels got disrupted because of sporadic COVID-19 outbreaks, but the business recovered in June once the conditions improved.
According to the company's fiscal report for the first six months of 2022, as released on July 28, the total sales volume of Budweiser APAC has declined 1.4 percent year-on-year, while revenue per hectolitre rose by 4.2 percent on a yearly basis.
In China, the beer producer saw volumes decline by 5.5 percent year-on-year, but revenue per hectolitre increased by 2.4 percent. As a result, revenue decreased by 3.2 percent from a year earlier.
The report said that channel disruptions in the Chinese market, including nightlife and restaurant closures owing to outbreaks, peaked in April before gradually easing through May and into June. Overall, the company saw a month-over-month recovery throughout the second quarter, with underlying consumer demands remaining strong.
By June, volumes recovered and grew high-single digits with premium and super premium portfolios bouncing back with double-digit growth.
On the new beer consumption trend in China, Jan Craps, CEO and co-chair of Budweiser APAC, said that the company has observed women consumers' growing purchasing power in China, leading the company to launch new innovation and line extensions especially targeting them.
For instance, Hoegaarden Fruity currently accounts for more than 10 percent of the sales in the Hoegaarden brand category, growing strongly by double digits in the first half of the year despite channel disruptions. Meanwhile, before summer started, Corona introduced three new flavors sea salt guava, sea salt pineapple and sea salt kalamansi to attract women consumers. Moreover, Bud APAC stays close to emerging consumer trends.
As consumers consume beers not only at KTVs but also at bars and lounges, and nightlife has moved more to open spaces, the company has invested in new nightlife channels.
The CEO also emphasized how premiumization is becoming a growing trend in China, where the number of middle income households continues to grow, as does the appetite for premium beers. In China, the company has a strong portfolio of premium beers and is driving further premiumization with six major brands, which include Budweiser, Budweiser Supreme, Harbin, Corona, Blue Girl, and Hoegaarden.
The company has continued to make sustainability part of its business.
In June, during World Environment Day, Budweiser APAC announced that its Jinzhou brewery in China was on track to becoming the second carbon-neutral facility in the Asia-Pacific region by the end of 2022.
"(The move) further demonstrates our commitment to a low-carbon transition. We continue to work towards achieving our 2025 Sustainability Goals and 2040 net zero ambition across our value chain," said Craps.
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