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New Belgian beers gaining market share
By Rachel Hall in Brussels
Published: December 30 2010 22:52 | Last updated: December 31 2010 00:00
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| Belgium’s beers have continued to grow, even through the recession |
If any place in the world epitomises the David and Goliath battle that is upending the global beer industry it is Belgium, home to both the world’s largest brewer, Anheuser-Busch InBev, and arguably the famous small-scale “craft” beers, the trappist ales made and distributed by monks.
For AB InBev, maker of the Budweiser and Stella Artois brands, the trends have been less than favourable. Beer drinkers in western Europe and North America have been consuming less for years and sales volumes in both regions have been dropping.
Last year, the brewer, based in the Flemish town of Leuven just outside Brussels, saw its volumes drop 4.9 per cent in Europe and 2 per cent in North America, according to Bank Degroof.
At the same time, Belgium’s smaller brewers have begun to benefit from the shift of western tastes towards richer, more complex beers by capitalising on a brand that has become hot in the beer-drinking world: Belgium itself.
“The cachet of Belgian beer is similar to French and Italian wines in the postwar era,” says Tim Webb, author of Good Beer Guide Belgium. “If you put the word Belgian on the label, you’re implying that it’s good quality.”
Five years ago, more beer was exported from Belgium than consumed there for the first time in Belgium’s storied beer-making history, and last year the amount sent overseas topped 57 per cent, according to the Belgian Brewers Association.
Yvan De Baets can testify to the newly found cachet. Seven years ago, he and business partner Bernard LeBoucq founded Brasserie de la Senne, only the second brewery now based in Brussels – and the first to be set up in the capital in more than a century.
After only two years in business, Mr De Baets says that the company could no longer keep up with exporters’ demand and began to look for a larger facility near the centre of town.
It now sells 20 per cent of its beers overseas, but Mr De Baets says that he expects it will soon account for half of all production.
“It’s easy for us to sell beer because we’re based in Belgium,” Mr De Baets says, sitting in his cavernous new facility in Brussels’ scruffy western neighbourhoods. “Consumers want to be a bit special, but nobody can be special while drinking Stella, because you can find it everywhere.”
Not so long ago Belgium’s speciality beer industry was expected to fade into oblivion; beer consumption in the country has fallen by 20 per cent over the past decade. By the 1970s, breweries were being shuttered and some of Belgium’s most distinctive recipes disappeared from drink lists.
The rediscovery of Belgian beers began almost 20 years ago, as food writers such as Briton Michael Jackson began spreading their gospel in books and articles.
Even through the ongoing recession, they have continued to grow, gaining market share from the larger, global brands.
“As consumers grow richer, they want to differentiate themselves from the masses. So they move away from the lager everyone knows,” says Gerard Rijk, a food and beverage analyst at ING.
“They are trying new beers, which increases consumer sophistication,” he continues
But Goliath is not taking the challenge lying down. In the 1980s, InBev acquired two highly regarded Belgian brews, Hoegaarden and Leffe.
But in recent years, it has used its global distribution system – made significantly larger when it acquired the US’s Anheuser-Busch two years ago – to get the brands in front of the same discriminating drinkers who have been imbibing independent beers.
Although AB InBev does not break out sales by brand, the company says Leffe, which can trace its lineage back to the 13th century, had its “best year ever” in 2009, while Hoegaarden is described as one of the company’s “fastest growing brands”.
Both are rated among the top three beers by Belgian consumers and are exported to more than 60 countries worldwide.
“Leffe and Hoegaarden are two great speciality beers in our portfolio that reach far back in history,” says Andreas Hilger, AB InBev’s vice-president of marketing for western Europe.
“Due to the fact that they are traditional specialities, they have a lot of appeal in markets even outside Belgium.”
Japan toasts rebranding of whisky
By Michiyo Nakamoto in Tokyo and Jamil Anderlini in Beijing
Published: December 22 2010 05:55 | Last updated: December 22 2010 18:26
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| That’s the spirit: drinkers at a whisky tasting event in Japan, where demand is forecast to increase by 20 per cent |
One evening this month, a group of women dining at Whisky Voice, a restaurant in Tokyo, made the somewhat unconventional choice of whisky and soda “highballs” to accompany their meal.
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“It was the first time for them to drink a highball, but they kept ordering it through the evening,” says Kazuharu Ishikawa, manager of Whisky Voice.
Their choice underscored the comeback that whisky is enjoying. After two decades of fading popularity, the tipple is back on the menu in Japan, where it was long overshadowed by beer, wine, sake and shochu – an alcoholic drink distilled from potatoes, barley or rice.
After peaking in 1983, when more than 381 kilolitres of whisky were consumed, demand for the drink had shrunk to 74 kilolitres by 2008, according to Japan’s Tax Agency.
But last year, the relentless slide in consumption was reversed, with shipments rising 10 per cent. Demand for whisky is expected to be even stronger this year, up an estimated 20 per cent, says Suntory, the country’s oldest and largest whisky producer.
Strong whisky sales drove a 48 per cent boost in Suntory’s operating profits for the first six months of the year, to a half-year record of Y41bn ($489m).
Competitors have also benefited, with Asahi’s Black Nikka Clear Blend whisky notching up 27 per cent growth in the first 10 months of this year.
“Sales of all whisky brands are showing very robust levels of increased demand,” says Rob Remnant, president of Moët Hennessy Diageo in Japan.
While the improved sales can be attributed in part to the group’s reconfigured portfolio, Mr Remnant says, “there is no doubt also that there has been a resurgence of consumer interest in whiskies which . . . is properly attributed to the increased popularity of the highball”.
Japan’s rediscovery of whisky owes much to the efforts of Suntory, which has about 60 per cent of the market. The privately held company, which also owns Orangina, the European drinks group, launched a concerted effort two years ago to revive demand for the product, recently winning several international awards.
The problem was largely one of image, says Tetsu Mizutani, an executive officer of Suntory who is credited with helping spark the latest whisky craze. Whisky has long been seen as a drink to have at the bar after dinner, but young people in Japan do not go for that after-dinner round any more, explains Mr Mizutani.
And many young Japanese considered whisky a drink for old people.
Another issue was that young Japanese were drinking less and choosing drinks with low alcoholic content, says Takuya Kano, president of Sakebunka Institute, an alcoholic beverage think-tank in Tokyo.
Overall alcohol consumption has also declined 8 per cent since peaking in 1999, according to the Tax Agency.
Suntory decided to broaden the market by highlighting more opportunities to enjoy the drink, particularly for young people who had never tried whisky before.
The company launched an advertising blitz to improve the image of whisky, and aggressively marketed the highball to restaurants and izakaya, casual Japanese eateries.
Suntory even developed a highball tap to make it easier for restaurant staff to serve and to ensure the consistency of the drink, and a canned version to encourage consumption at home.
“Suntory educated restaurants on how to serve whisky,” says Mr Kano.
The company says the highball also gained popularity because of the tough economy, as it is generally cheaper than a similarly sized beer, and its low alcohol content makes it easy drinking with meals. Still, the whisky boom has taken even Suntory by surprise.
“I thought it would take five years to reignite demand for whisky,” says Mr Mizutani. “I didn’t think it would happen so quickly.”
While whisky is resurgent in Japan, campaigns to bring the drink to China have not been quite as successful.
In China, massive advertising campaigns by brands such as Chivas led to rapid growth in whisky consumption over the past decade, but it has not developed the kind of hard-core aficionados found in places such as Japan and Taiwan.
“Despite the amazing efforts of whisky companies to sell their product in China the results appear to be quite disappointing, especially when you consider the margin companies are earning on each bottle,” according to Paul French, chief China analyst at Access Asia, an independent research company.
International executives in charge of whisky sales in China lament the fact that gains in their market share appear to last only as long as their ubiquitous advertising campaigns and as soon as they reduce promotions their sales tend to fall off.
While Chinese investors have been avid speculators in red wine, especially the much sought after Château Lafite, in recent years there has been little sign of wealthy Chinese flying to Scotland to buy single malts by the barrel.
At the same time, the resurgence in popularity of traditional Chinese white spirits, which still dominate the domestic liquor market, have prompted large international companies such as Diageo to make their own investments in Chinese white spirit distilleries.
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