Analysis

Premium beer market to top US$200 billion by 2010

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While the beer market as a whole has been static in many regions, the premium sector has been showing healthy growth. And, according to a recent report from just-drinks.com, will continue to do so for some time to come. Chris Brook-Carter reports.

In the developed markets of the West, premium beer has been something of a lifeline. In recent years, it has been and remains the fastest growing segment of the beer market, both globally and in many regions.

Moreover, in the mature markets of the UK, the US and Germany, to name a few, it has delivered the only significant growth in the industry. And as we move forward, it will continue to gain in importance with the major international brewers diverting greater amounts of advertising and promotion to a highly competitive but also highly profitable sector.

Sales of premium beers by volume increased fairly rapidly between 2000 and 2003 whilst the total beer market was relatively static. Premium beer sales accounted for around 15% of total beer sales in 2000 but by 2003 premium beers accounted for 20% by volume, according to the latest report from just-drinks.com.

The report - "A global market review of premium beer - with forecasts to 2010" - shows that premium beers are 10% to 50% higher in unit price than standard beers, adding to their importance in an industry where brewers are constantly battling against low margins brought about by retail and consumers pressure.

According to just-drinks.com, global sales of premium beer totalled US$86 billion in 2000. By 2003, total global premium beer sales had risen by nearly 35%, to US$116 billion, representing an average annual growth rate of 11.6%. In volume terms, just-drinks.com estimates that the global market for premium beer grew by a massive 79% between 2000 and 2003 to 269m hectolitres (hl).

In 2003, the report says, Western Europe was the largest regional market for premium beer, accounting for 39% of total global sales by volume. North America accounted for 21.6%; followed by Eastern Europe with 14.9%; and Asia Pacific also with 14.9%; then Latin America (5.2%); Africa and the Middle East (3.3%); and Australasia (1.1%).

The US (70m hl) followed by Germany (35m hl) and the UK (24m hl) were the biggest individual markets for premium beer in 2002. Between them they accounted for 47% of total global sales, just-drinks says.

China (12m hl) was the fourth largest market for premium beer sales in 2002 in spite of being the biggest market for total beer sales of any type. The premium sector accounted for 5.1% of total beer sales in China in 2002.

Expert Analysis

A global market review of premium beer - with forecasts to 2010

just-drinks.com gives you the size and structure of the global and regional premium beer sector based on interviews with a number of the international players and data contained in their annual reports. You will also receive eight leading company profiles, an insight in to the premium beer consumer and sales forecasts to 2010.

To find out more about this report and to order your copy, please follow this link.

 

Spain (10m hl), Portugal and Brazil (9m hl each) were the next largest premium beer markets in 2002. These top seven markets for premium beer accounted for 60% of total global sales by volume in 2002.

"This regional structural pattern for premium beers strongly suggests that it is influenced by a number of different but interacting factors," says the report. Perhaps most important of these is the development and sophistication of the market, which helps drive sales in Western Europe and North America. Then there is the size of population, which affects sales in Australasia, for example, as it is very small. The historical tradition of the beer market is also important, which explains the good growth in longstanding beer markets such as the UK, Germany, Belgium and Scandinavia. Finally there are the consumer tastes and preferences.

"Premium beer has taken off faster in Western Europe than anywhere else. Eastern Europe is a young but rapidly growing market. North America has its very large population but demand is static," says the report. "Just because a country is a very large market for beer in total does not mean that it is necessarily a leading country for premium beer. While China is the number one market for total beer sales, the premium sector occupies only 5.1% of the market i.e. 12m hl in 2002. Thus China is the fourth largest premium beer market in the world."

However, just-drinks.com believes that particular attention to China and the US is justified since they are the two biggest markets for beer in general and have a major influence on the potential of the global beer segment.

Overall, the leading international players in the global beer industry are optimistic about the future of premium beer. There is an expectation that demand for premium beer will continue to grow even though it may vary between the different regions.

As Scottish & Newcastle put it: "Globally the trend will be more towards premium products. However on a country-by-country basis it is dependent on the maturity of the market and the economic outlook for that particular country. Less developed markets will not have reached this point in the market life cycle. However, developed markets will see most growth in this category."

Interbrew too is forecasting growth in the global demand for premium beer, except in Africa. "We project share-growth for premium beers on a global level and share-growth in every continent except for Africa, reflecting the economic and social development and urbanisation trends in those markets which help create consumer demand, and increasing industry investment in premium brands to meet the latent demand," Interbrew told just-drinks.

Taking account of analysis of population trends and the global economic outlook, together with the views of leading international players, just-drinks.com forecasts that between 2003 and 2010, the global sales of premium beer will grow by over 72% to reach US$200bn by 2010.

For more on this report, visit: /store/products_detail.asp?art=29251&lk=rotw

Or, call Will Johnston on +44 (0) 1527 573 608


Sectors: Beer & cider

Companies: Anheuser-Busch InBev

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