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While the projected volume growth of beer in Asia Pacific is expected to be sluggish due to the competition from alternative beverages such as spirits, the beer scene in Southeast Asia is booming. Beer volume consumption in Southeast Asia is expected to grow at a healthy CAGR of 5% up to 2023, with the Philippines and Vietnam being the key growth drivers. Trends shaping the Southeast Asian beer market include increased taste sophistication among millennials, the premiumisation of beer in the form of craft beer and opportunities for beer in the home delivery channel.
Millennial beverage consumers in Southeast Asia have shown less brand loyalty and a greater willingness to experiment with new and more sophisticated flavours. This is reflected in the high emphasis beer players in the region place on production innovation. Although beer with fruit flavours, such as Tiger Radler Lemon is not a new concept, we have seen more unique fruit flavours like lychee and strawberry being incorporated into beer in recent times.
There has also been a blurring of lines between alcoholic and non-alcoholic beverages. For example, in Thailand carbonates brand Est Play unveiled two mocktail flavours of Kamikaze and Pink Bomb in early 2019. While the drinks are non-alcoholic, the use of colour and alcoholic flavours appears to be targeted at millennials and creates opportunities for different consumption moments.
The need to cater to consumers who desire unique tastes, coupled with rising disposable incomes in Southeast Asia, has contributed to the premiumisation of beer in the form of craft beer. In Vietnam, craft brewers in cities like Hanoi and Ho Chi Minh utilise craft brewing techniques learnt from European countries and incorporate local ingredients like pho to create beer that appeals to local tastes. Even in Thailand, where government legislation provides a challenge for domestic craft breweries, Thai consumers resort to importing craft beer from regional countries like Cambodia and Vietnam.
Despite the booming craft beer scene, craft beer is still small relative to total beer in Southeast Asia, with just under 2% of beer by volume in Singapore being craft and less than 1% of beer in other Southeast Asian markets being craft. However, we can certainly expect more craft brewers springing up across Southeast Asia and honing their skills in the coming years.
The consumer need for convenience has provided opportunities for beer in an unlikely channel – home delivery. According to Euromonitor International’s 2019 Top 10 Global Consumer Trends, “I want it now!” has become a key consumer desire. Amidst increasingly hectic lifestyles, consumers place a greater emphasis not only on convenience, but also on getting their wants instantly.
Some food delivery services in Singapore have tapped into this to offer quick beer delivery services at a slight premium – Foodpanda promises delivery within 30 minutes, while Amazon’s local delivery subsidiary Prime Now guarantees delivery within two hours. Convenience aside, quick delivery allows for the possibility of fresh cold beer – something that is cherished in the tropical heat of Southeast Asia. Home delivery of beer by food delivery services is still niche and overshadowed by more popular beverages like bubble tea. However, could this change with a possible pairing of food with beer?
Despite the optimistic growth prospects for beer volume consumption in Southeast Asia, greater taste sophistication and higher disposable income could mean a shift in emphasis from quantity to quality of beer. Beer players will need to consistently reinvent themselves to stay relevant – new sophisticated flavours, craft beer and perhaps new channels to reach out to their consumers.
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