GLOBAL: Drinks co's should go local in emerging markets - analyst
Multinational alcoholic drinks companies should look to cultivate a local brand presence in emerging markets going forward, according to an industry analyst.
In a comment piece late last month, Jeremy Cunnington, senior alcoholic drinks analyst at Euromonitor International, said that the larger drinks companies are looking to Asia Pacific, Latin America, Eastern Europe and Middle East and Africa for growth, not just through exports, but through domestic acquisitions.
Cunnington used Anheuser-Busch InBev's takeover of Grupo Modelo in June as a case in point. “A-B InBev, just like other major brewers, has been looking to increase its presence in high-growth emerging markets," he said. "The Mexican market offers potential for the company as beer volumes are forecast to increase by over 1bn litres (3% CAGR) over 2011-2016 thanks to economic development and growing disposable incomes.”
In spirits, “many (international spirits companies) are now looking to acquire local spirit brands as a means to become more thoroughly embedded,” said Cunnington. “The most active multinational player in terms of moving into local spirits has been Diageo, which in 2011 developed its own Indian whisky brand (Rowson’s Reserve), acquired the local Turkish spirits giant Mey Içki and gained a majority stake in the Chinese baijiu producer Sichuan Quanxing. In 2012, it has so far purchased Ypióca, the Brazilian cachaça producer.”
Wine companies, meanwhile, ought to focus their attentions on China, where "the rapid rise of China’s middle classes continues to have global repercussions for the wine industry".
“So long as mature Western economies continue to hold back overall growth … , we can expect such activity to continue,” he continued. “However, entry into local emerging market spirits categories will remain limited, at least initially, and focused on specific economies such as the major growth markets of India, Brazil and China.”
To read the full comment piece, click here.
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