China: Tsingtao Brewery upgrading marketing concepts in line with changing tastes

Tsingtao Brewery, a time-honored beer brand based in Qingdao, Shandong province, is upgrading its marketing concepts in line with changing tastes, the China Daily reported on December 2, citing company officials.

Young people are reshaping the company's concept of appealing to those looking primarily for the value of their money. Instead, it is finding that it pays to attract those who want to associate the product with feelings such as warmth and uniqueness, they said.

The company has opened new types of taverns to cater to diverse demands and has seen business booms.

Tsingtao Brewery has opened more than 260 taverns in over 60 cities nationwide, and those taverns have found favor with the new generation of consumers.

At Liyuan tavern in Qingdao, the space is also set up for activities such as tea drinking, reading books and bed-and-breakfast stays.

The company said it hopes the taverns will satisfy different groups of consumers, such as those who like taking pictures, prefer a relatively quiet environment or wish to discuss business privately.

Company officials said the process of opening taverns has been very different from running breweries to produce beer. Operating their pubs means managing supply chain systems and maintaining standards across all their businesses, they said. The most challenging part is to deliver fresh beer to all parts of the country in the shortest time.

"For instance, the process of brewing craft beer is strict. It is produced only in Qingdao, and the quality guarantee period is only seven days. The products must be delivered quickly to other cities in the country," said Zhu Junhai, president of Tsingtao Brewery Culture Communication Co, a subsidiary of Tsingtao Brewery.

"Beer consumption in China is increasingly evolving toward being high-end, in the right setting and conducive to social interaction.

"To meet the demand, taverns are the best locations to create the feelings that consumers want. Taverns should be thought of as the top place for brand promotion, new product experiences and enjoyment of high-end and high-quality beer," Zhu said.

Tian Yiming, manager at the Liyuan tavern, said customers get a choice of services and the utilization rate of the tavern has been quite high. Business has been good since it started its trial operation in late June, and it usually requires reservations two to three days in advance to book private rooms.

Generation Z consumers, who were born in the late 1990s or early 2000s, have become a main force in the beverage consumption market, experts said. The group has grown up in an era with rapid economic growth and technological development, and their spending patterns are very different from older generations. Their preferences involve convenience, creation of enjoyable experiences and a willingness to try new products, according to a recent report by domestic market research provider Analysys International.

While some Gen Z customers still rely on their parents economically, they have become one of the groups who spend the most in China, said market research company Daxue Consulting.

To attract these customers, Tsingtao Brewery has special launches of beer in customized packaging designed around the FIFA World Cup Qatar 2022. The pop-top cans are printed with different colors and languages of participating national teams to attract young consumers.

The brewer has also launched more than 200 soccer-watching parties nationwide at its trendy Tsingtao 1903 taverns and some restaurants in cities such as Beijing and Shanghai, as well as Guangzhou and Shenzhen in Guangdong province, Xiamen in Fujian province and Wuhan in Hubei province.

"The tavern is the new scene for customers to enjoy beer and life experiences in an immersive environment. It allows them to experience beer culture better," said He Yongru, secretary-general of the China Alcoholic Drinks Association.

"It will certainly become a business model that can combine the enjoyment of beer with fashion, culture and tourism, and create a new experience for consumers as well as space for the industry's growth," He said.

During the Singles Day shopping spree this year on Nov 11, the Shandong province-based brewery achieved one of the highest sales revenues among various beer brands on Alibaba's Tmall e-commerce platform. Bestsellers included its middle to high-end products and some differentiated products, such as classic beer, less-bitter white beer and craft beer, the company said.

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