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AB InBev opens new brewery in China to capture middle-class spending power

By Mary Ellen Shoup contact

- Last updated on GMT

AB InBev hopes to unlock the market potential of China's middle class who are trading up from domestic to international beer brands like Budweiser. ©GettyImages/imtmphoto
AB InBev hopes to unlock the market potential of China's middle class who are trading up from domestic to international beer brands like Budweiser. ©GettyImages/imtmphoto

Related tags: Brewing, Brewery

AB InBev has opened its newest brewery in China, aimed at tapping into the booming growth of the country’s growing middle class - accounting for 76% of the total urban population by 2022 - and their premium beer preferences.

The Putian Brewery, located in the southern Fujian province of China, is capable of producing 1.5 million tons of beer per year and 160,000 cans per hour making it the largest brewing facility in Asia Pacific, AB InBev CEO Carlos Brito told CNBC.

Domestic brands like Tsingtao, Snow, and Yanjing have a strong presence in China with a little over half of the beer market, according to Kantar data. However, Chinese consumers are showing more interest in beer made by international brewers such as AB InBev viewing it as a more premium product.

"Our brands, our activities, our experiences that we give to consumers are not in the mainstream side of the market,” ​Brito said. “They are in the premium and super-premium side of the market, and those segments are growing very nicely,"

AB InBev has experienced steady growth of its Budweiser brand in China where it is classified as “premium.”​  Stella Artois, considered “super-premium,”​ has experienced double-digit growth since it launched in China three years ago.

The new brewery will be include new technology to improve quality control such as high-speed scanning and automatic discarding of defected products.

The Putian Brewery will also have several environmentally-friendly features including solar panels to reduce emissions and sustainable water and heat processes, Brito said.

"It was built in record time like everything in China and it's a very environmentally sound brewery, as most of our breweries are,"​ AB InBev CEO Carlos Brito told CNBC

Related topics: Business

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