Key Trends in the Global Beer Market - Kevin Baker, Global Research Director, Beer & Cider, GlobalData - Arena International
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Key Trends in the Global Beer
Market
Kevin Baker, Global Research Director,
Beer & Cider, GlobalData
International Beer Strategies Conference
London
May 2018
1
It Was 20 Years Ago Today…
Canadean’s 1st
International Beer
Strategy Conference
was held at the
Langham Hotel in
London
2
Also Launched in 1998
3
The World in 1998
4
The last 20 years have seen a lot of change….
5
These didn’t exist in 1998…
6
We have come a long way since 1998
7
GlobalData’s Platforms
GlobalData GlobalData GlobalData GlobalData
Wisdom Innovation Retail Foodservice
The only empirical,
Market intelligence An insight and Market and consistent and robust
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analysis, reports, focused on the key intelligence on retail solution to provide in
data, survey findings driver of change – companies, brands, depth intelligence on
and news on 40 the consumer. technologies, global foodservice.
global market consumers and
sectors. shoppers.
Forecasting
8
Global Beer growth hit by global financial crisis and yet to recover
Global Beer Performance ( Volume ‘000 HL and YOY Growth)
7.0%
000's HL YoY Growth
6.0%
5.0%
1,968,958
1,955,231
1,953,972
1,950,589
1,944,032
1,935,705
1,907,147
1,859,245
1,814,383
4.0%
1,799,947
1,767,654
1,671,995
1,578,546
3.0%
1,519,710
1,460,623
1,430,393
1,395,321
1,375,497
1,340,750
2.0%
1.0%
0.0%
-1.0%
-2.0%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Beer growth rates picked up after the credit crunch, fell again since 2013 due to
China, but are beginning to recover
9
Developing Markets Have Driven Growth
Africa; Asia; and MENA have driven growth. Australasia; North America; and West Europe
are flat or declining.
Beer Market Growth by Region, Cagr 1999 – 2017, %
Africa
Middle East, North Africa
Asia
Latin America
East Europe
Australasia
North America
West Europe
-1% 0% 1% 2% 3% 4% 5%
10The line-up of leading brands has changed dramatically
Chinese brands now account for 4 of the largest brands in the world
Top 10 leading International Brands, 000’s HL, Top 10 leading International Brands, 000’s HL,
1999 2017
Performance Performance
Budweiser 49,968 Snow 101,157
Bud Light 33,495 Budweiser 49,161
Kirin 27,015 Tsingtao 49,015
Asahi 24,145 Bud Light 44,809
Coors 22,768 Corona 41,664
Corona 22,647 Skol 39,103
Skol 21,759 Heineken 34,258
Brahma 21,643 Harbin 29,885
Miller Lite 20,209 Yanjing 29,699
Heineken 19,320 Coors 26,519
Combined Share Combined Share
of Top 10 19.6% of Top 10 22.8%
11Premiumisation Has Driven Value Into The Industry
Premium & Superpremium are growing faster than total beer. Discount and Mainstream
are growing below total beer.
Global Beer Growth by Price Segment,
Cagr 1999 - 2017
Performance
Premium and Superpremium
brands are driving growth as
All 2.0%
consumers are increasingly
“drinking less but drinking better”
Discount 1.6%
The premiumisation trend has been
bolstered by the financial crisis as
many consumers typically “trade Mainstream 1.6%
up” in a recession, seeking to get
“more bang for their buck”
Premium 3.1%
Superpremium 5.0%
12Premiumisation Has Driven Value Into The Industry
Pursuit of better choices drives premiumisation
Consumers are embracing a "less but better" 37% of global drinkers are
approach when making alcoholic beverage willing to pay extra for an
choices, to justify spending (particularly in alcoholic drink that will bring
extra levels of enjoyment and
times of economic uncertainty) indulgence.1
Ale and craft beer drinkers in particular tend
to seek premium or higher-end beer,
Global: percentage of drinkers who usually buy
although this tapers off with age beer at the premium or highest end of the price
range (%), 20142
In emerging or developing markets the
Ale/ Craft Beer Lager
appeal of premiumization is anchored in the
desire to demonstrate wealth and 11
10
12
10
11
9
11
9
sophistication
8 7
5 4
18-24 25-34 35-44 45-54 55-64 65+
Drinkers' pursuit of premium or high-
end beer diminishes with age.
[1] GlobalDatas Q1 global survey, 2015; [2] GlobalDatas global survey, 2014 13Internationalisation of the industry has continued to take hold
International brands growing at double the rate of total beer
International brands are
outperforming the overall market, International vs Domestic Beer Growth,
driven by the increasingly global Cagr 1999 - 2017
reach of global brewers and by Performance
consumers who view many of these
brands as aspirational
Total Beer 2.0%
However the global beer market
remains fragmented in brand terms
with the ten largest international
brands still only accounting for less
than 10% of the total Domestic Beer 1.7%
International Beer 4.3%
14Internationalisation of the industry has continued to take hold
International brands have increased their share of the market
Top 10 leading International Brands, 000’s HL, Top 10 leading International Brands, 000’s HL,
1999 2017
Performance Performance
Heineken 15,480 Heineken 31,688
Amstel 8,139 Budweiser 30,076
Budweiser 7,661 Corona 18,460
Guinness 7,143 Tuborg 14,824
Carlsberg 6,995 Carlsberg 11,750
Corona 6,717 Stella Artois 10,298
Foster`s 6,148 Guinness 9,549
Stella Artois 5,103 Modelo 9,416
Coors 2,904 Tiger 9,039
Tuborg 2,666 Amstel 7,673
Combined Share Combined Share
of Top 10 5.2% of Top 10 7.8%
15Internationalisation of the industry has continued to take hold
Origin-specific beer offers perceived trustworthiness in a globalized world
Product standardization fuels an
42% of global consumers find how/where a beverage is produced
anti-globalization attitude that to be influential or very influential when choosing which alcoholic
leads to a preference for products beverages to consume, 20151
signifying specific places, traditions,
and cultures
38% 43% 43% 42% 42%
In developed markets this has led
to the development of the “World
Beer” category, where consumers 18–24 25–34 35–44 45–54 55+
can experience brands from The influence of product origin and product method is quite
“exotic” sources homogenous across age groups.
In emerging markets international
beer is seen as superior, generating 53% of consumers in emerging markets prefer
international alcoholic drink brands over local ones.2
demand for origin-specific beer
produced elsewhere
Source: ; [1] GlobalData Q1 global survey, 2015; [2] GlobalData next-generation emerging markets survey, 2014 16New customer segments have driven stronger growth
Flavored Beer & Beer Mixes Have Driven Growth…but Lager still accounts for 92% of the
total
Growth by Beer Type,
Consumers are looking for different Cagr 1999 - 2017
drinking experiences, leading them Performance
to try different beer styles Total 2.0%
Wheat Beer 4.5%
Flavored Beers and Beer Mixes in
particular appeal to consumes Stout 1.7%
seeking sweeter, “easy to drink”
products Others 4.3%
Other Top Fermented 2.1%
Declining volumes in traditional
markets has tempered the growth Lager 1.9%
in Ales and Stouts
Flavored Beer 11.9%
Dark Beer 4.3%
Beer Mixes 8.6%
Ale 0.9%
*Premium is defined as GlobalData’s Premium & Superpremium segments combined
** Premium Specialities are defined as non-lagers
17The advent of craft has given the industry a “Glocal” perspective
Craft growing 4 times faster than total beer, and now accounts for nearly 2.5% of the total.
“Craft” Volumes
(000s HL), 1999 - 2017
“Craft” beers have grown spectacularly 60,000
since 1998
50,000
Whilst this growth is almost certainly not
sustainable, the underlying drivers of 40,000
“craft” – anti-globalisation; localism; a
desire for small scale, exclusive products; 30,000
and an interest in artisanal production
methods; mean that “craft” volumes are 20,000
unlikely to fall.
10,000
0
1999200120032005200720092011201320152017
Total Beer “Craft”
Cagr 1999 - 2017 2.0% 8.2%
18The advent of craft has given the industry a “Glocal” perspective
Craft Brewers are seeking to defend the category from those trying to jump on the
bandwagon
There are a number of positive claims consumers associate with craft
A craft beer is most likely to be perceived as featuring high-quality ingredients, made by hand, and
authentic.
However these terms are often quite subjective
To defend themselves from lower-quality competitors that damage the image of the movement,
genuine craft producers are looking at ways of drawing consumers' attention and calling for claims to
be verified
Global: "What qualities/attributes do you associate with the following food and drink claims?", 20161
41% 40% 38% 36% 35% 35% 33%
30% 28%
23%
High quality Made by hand Authentic Locally made Better taste Healthy Unique taste Made by a Expensive Made in small
ingredients small batches
independent
producer
Source: [1] GlobalData 2016 Q3 global consumer survey
19The advent of craft has given the industry a “Glocal” perspective
The word "craft" is in danger of devaluation
Craft breweries are increasingly being 48% of global consumers want to see more craft alcoholic drinks
acquired by major market players (marketed around smaller brands making beverages with
natural and high quality ingredients)2.
Despite big brands generally maintaining a But…
hands-off approach to new craft additions,
they can experience rejection by consumers 41% of global consumers say that marketing buzzwords such as "craft" and
"artisanal production" are just an excuse for manufacturers to charge extra
for alcoholic beverages2.
The growth of craft volume can take away This includes:
from the perception of exclusivity, and this 46% 46% 44% 40% 38%
also has consequences for perceptions of
value
North America Asia-Pacific Middle East & Latin America Europe
Mass production makes it more difficult to Africa
justify a price premium compared to small-
scale brewers, who can charge more as a
focus on quality and hands-on brewing is
part of the brand narrative. 18–24 25–34 35–44 45–54 55+
41% 43% 41% 39% 45%
Source: [1] GlobalData 2015 Q1 global consumer survey; [2] GlobalData 2016 Q4 global consumer survey
20The World’s Top 10 Brewers 1998
Rank Company Volume (mhls)
1. Anheuser-Busch 118.8
2. Heineken 59.2
3. Miller Brewing 51.9
4. SAB 42.2
5. Interbrew 35.7
6. Ambev 34.8
7. Modelo 34.1
8. Asahi 29.1
9. Coors 28.8
10. Kirin 27.5
21The World’s Top 10 Brewers 2017 (Estimate)
Rank Company Volume (mhls)
1. A-BInBev (incl. SABMiller; excl. all
announced disposals) 553.4
2. Heineken (inc. Schincariol) 200.7
3. Carlsberg 118.3
4. China Resources (Snow) Brewery 117.3
5. Molson-Coors (incl. 100% of Miller Coors) 91.6
6. Tsingtao 79.8
7. Asahi (incl. Peroni, Grolsch & SABMiller’s
East European breweries)
60.6
8. Yanjing 45.1
9. Castel 28.9
10. Kirin (excl. Schincariol) 26.9
Based on 2016 volumes
22The Past
Major 20 Years HasMergers
International Seen Consolidation
& Of The Big Players
23The Past 20 Years Has Seen Consolidation Of The Big Players
1998 2017
Top 10 Brewers
All Others
24The landscape becomes even more interesting with the advent of zero
percent
Alcohol Free Beers are growing at twice the rate of regular strength
Alcohol Free beers are growing rapidly Beer Growth by Alcoholic Strength,
driven by consumers desire to manage Cagr 1999 – 2017, %
their alcohol consumption and a
repositioning of these products as
positive lifestyle choices Total
Low Alcohol volumes have been boosted No Alcohol
by the growth of Radlers
Low Alcohol
Despite the trend towards alcohol free
beers, Strong beers (>5.5% Abv) are
Standard
actually growing even faster – allied to the
Strong
growth of craft and premium
0% 2% 4% 6%
GlobalData defines Non-Alcoholic asOver a third of drinking consumers plan to cut down on alcohol
Healthier lifestyles and greater awareness of 37% of global consumers plan to cut down on alcohol for health reasons1.
risks aligned with excessive alcohol drinking This sentiment is more popular among men, at 39%, than women, at 34%1.
results in consumers changing their attitude to
alcohol Global: "To what extent do you agree with the following statements? I
am trying to cut down on the amount of alcohol that I consume for
health reasons," responses of "agree" or "strongly agree," 20151
37% of global consumers state they plan down
to cut down on alcohol consumption for health 39% 40% 37% 36%
33%
reasons
Younger consumers (aged 18–34) are most likely
to intend to cut down on alcohol for health
reasons, with the attitude relaxing as consumers 18-24 25-34 35-44 45-54 55+
age.
This can be attributed to a growing popularity of 53%
sporty lifestyles, as well as ever-increasing 38% 38%
34%
image-consciousness, as consumers try to limit 29%
their intake of calories
Asia-Pacific Latin America Africa North America Europe
Source: [1] GlobalData 2015 Q1 global consumer survey
26Healthy lifestyles
Consumers seek lower-ABV beverages to accompany moments of fun
The desire for fun, indulgent beverages, along 84% of global drinkers are trying to reduce or moderate their
with the growing amount of consumers looking consumption of alcohol1.
for healthier lifestyles, has boosted the number
of launches of low-ABV beverages such as 32% of global consumers check for nutritional
radlers and low- or non-alcoholic beers information such as calorie content or ABV when
choosing what alcoholic beverage to have2. This
includes:
Increasingly consumers are checking the alcohol Global: "I check for nutritional information such as calorie
content or ABV when choosing what alcoholic beverage to
content before choosing a beer. This is have," 20152
especially prevalent in Asia; Latin America and 42%
36%
North America 33%
26% 25%
Low-alcohol beverages such as radlers give
manufacturers plenty of space to experiment
Asia-Pacific Latin North Europe Africa
with unusual recipes and flavors America America
18–24 25–34 35–44 45–54 55+
36% 37% 33% 30% 26%
Source: [1] GlobalData 2016 Q4 global consumer survey; [2] GlobalData 2015 Q1 global consumer survey
27Other Trends…
1 2 3 4 5
Category Blurring Seasonal Beers Sour Organic Gluten Free
6 7 8 9 10
Home Delivery Attracting Food Pairing Neo- Nano Brewing
Female Prohibitionism
Consumers
28Conclusions
• The global beer market is unlikely to grow by more than 2% per annum for the
foreseeable future
• However consumers are “drinking less, but drinking better”
• International premium brands are outperforming domestic mainstream
• Consumers are more experimental in their consumption habits and looking for new
experiences and new beer styles
• Although the current momentum is unlikely to be maintained, “craft” is likely to
continue to be a major issue
• The growth of craft and anti-globalisation/capitalism will see the emergence of more
disruptors
• The industry has probably reached peak consolidation…but I said that in 2008!!
• Alcohol-Free beers are likely to grow in popularity and become mainstream choices
29The next 20 years?
• Will beer return to the growth levels seen in the early 2000’s?
• Will the premiumisation trend continue?
• Will we see the emergence of truly “global” brands?
• Will we see new players from Asia join the acquisition trail?
• Will we see Spirits producers or Soft Drinks Companies enter the market, or will
brewers acquire companies in those sectors?
• Has consolidation reached the endgame?
• Will Alcohol Free beers become a mainstream choice?
• See you in 2038!!
30For more information please contact:
Thank You Kevin Baker, Global Research Director, Beer & Cider
kevin.baker@globaldata.com
0044 7917 841 086
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