BEER CONSUMERS IN EMERGING MARKETS OFFER A FLAVORFUL, FLOURISHING FUTURE

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Breaking into opportunities in emerging markets can generate tremendous growth, but staying ahead of sales trends in fast-moving consumer goods (FMCG) in these countries isn’t easy. Keeping up with macroeconomic trends, identifying categories that are showing a surge and anticipating consumer needs are just a few ways to maximize your brand’s global growth potential.

One FMCG category that is seeing significant growth, and is indicative of shifting spending in these markets, is beer. So what can beer tell us about emerging markets? As the most widely consumed alcoholic beverage around the world, beer can be a positive indicator of growth in these markets. Increasing consumption and changing tastes can signal that consumers are beginning to care more about—and spend more on—non-essentials, and beer sales are telling us that there are (h)opportunities worth exploring in countries like Argentina, Vietnam, and Ghana, among others.

BEER CONSUMERS IN EMERGING MARKETS OFFER A FLAVORFUL, FLOURISHING FUTURE

UNCAPPING A FEW OF BEER’S BUOYANT COUNTRIES

Though the Brazilian economy has suffered in recent years, there are significant signs that the worst is over. During the economic downturn, Brazilians adjusted their habits to reduce their consumption. For example, instead of going out, they turned their homes into gathering places, and sales data tell us that beer drinkers have been seeking better products. Even during the height of the economic crisis, 2015-2016, the volume of super premium beers grew by 30% and premium beers by 7%.

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Brands that have Brazilians willing to spend more on beer are delighting them with new ingredients, flavors, and packaging. They are also laser-focused on delivering superior experiences.

Across the Atlantic Ocean, and on the other end of the economic spectrum, is Ghana. At the end of 2017’s third quarter, Ghana’s total FMCG growth (+14.0%) was almost twice as high as the next leading African market, South Africa (+7.8%). Strong performances in food and beverages buoyed the market. These categories have done well in smaller formats and independent channels such as table tops and open markets. Smaller manufacturers have also stepped up to meet the needs of consumers, achieving growth ahead of the top five players.

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A deep dive into the beverage category shows sales of beer, spirits, coffee, and soda are all on the rise. This demonstrates that consumers are interested in spending a little more on everyday luxuries. Within these categories, rural regions are the biggest growth opportunity—in many cases two to three times faster than the total category.

BEER CONSUMERS IN EMERGING MARKETS OFFER A FLAVORFUL, FLOURISHING FUTURE

Africa is one of the fastest growing beer markets in the world and Ghana is seeing some of the strongest growth. Lagers have the largest share of consumers’ baskets, but growth is lagging behind the category. Older-style beers such as malt liquors and pilsners are also declining.

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So, what are Ghanaians cracking open? Fruitier, flavored beer categories such as shandies and beer-like drinks grew 51% and 21% in value sales between 2016 and 2017, respectively. As in other markets, these flavors appeal to those who may not like a traditional beer taste.

Ghanaians are upgrading their beer, which could be the first sign of premiumization in the category. To date, through multinational companies have driven share, with a few notable exceptions, there is a huge opportunity for local players to capture rural growth, but also develop beers that appeal to local tastes.

Emerging markets will remain important investments, even as the world’s developed economies take serious steps toward recovery. These markets are becoming increasingly competitive and still have their challenges, like distribution channels, refrigeration and sin taxes. To win, companies must evolve their strategies and tailor them for each country, if not city. This requires an investment in deeply understanding consumers needs, desires, and attitudes, but it is an investment that stands to yield significant returns if done correctly.

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