Beer sales decline 4.5 percent in first half of 2015

What’s going on in China? Last year’s 1.8 percent dip in beer sales could have been a one-off as many blamed it on poor weather. In fact it was the first year-on-year decline since beer sales statistics became available in 1998.

But the decline seems to continue. AB-InBev reported that total industry volumes dropped by approximately 6.5 percent in the second quarter and by 4.5 percent in the first six months of 2015. The sales decline affected value and core segments most strongly.

Market research company Mintel forecasts that beer sales will shrink by 1 percent in volume this year and attributes this to slowing economic growth and the domestic beer industry facing saturation. Mintel also says that the structures of beer consumption in China have evolved, with consumers driven by quality rather than quantity.

Assuming that China’s beer market has reached an early maturity, brewers with a veritable premium offering may be best prepared to face this new situation.

AB-InBev said that their beer volumes were essentially flat in the second quarter, but up 1.7 percent in the first half. Their three focus brands – Budweiser, Harbin and Sedrin – grew by 3.5 percent in the second quarter, with Budweiser maintaining double digit growth. “We are continuing to invest behind Budweiser’s leading position in the international premium segment, and have stepped up support for our ’Brewed the Hard Way since 1876’ quality campaign”, AB-InBev said.

With five leading beer conglomerates – China Resources Snow Brewery Co, Tsingtao Brewery, AB-InBev, Yanjing and Carlsberg – taking up 80 percent of market share, it is increasingly challenging to raise market share by mergers and acquisitions.

AB-InBev announced their market share in China has risen this year to reach 18 percent in the second quarter.