China: Foster's wants to turn Shanghai beer into an international brand

Australian beer maker Foster's wants to turn Shanghai beer into an international brand, Asia Pulse posted on June 22. "What I think is unique about Shanghai beer is that it is offering something completely different. There is nothing from China that we feel is in the premium-beer category," Duncan Loynes, general manager for international brands at Foster's, said in a statement.

"Established international brands are generally identified quite strongly with their home market: Heineken with Holland, Budweiser with America, Foster's with Australia, Carlsberg with Denmark," Duncan Loynes commented.

The first step, already under way, is to take the beer out for a taste test. "We think there is a natural market among expatriates living here and visitors," he said.

One of the world's worst-kept secrets is that the Chinese like beer. In 2002, China surpassed the United States as the world's largest beer market. hile growth in Europe or America is flat at 1-2 per cent, China's love of a cold one, or even a warm one, is growing at a rate of 6 per cent annually.

The world's major brewers are battling for a larger piece of the Chinese market (a recent high profile dustup between Anheuser-Bush and SAB Miller to take over Harbin Brewery Group is one example), but Foster's is taking the opposite approach.

"We would like to develop our core market in the trend-setting, more affluent echelons of local Shanghainese society and then take it offshore," Loynes said.

For a beer brewed just a few minutes from the Bund, Shanghai's popular waterfront area, the city's "international" bars are an obvious starting point. Regulars are used to drinking international premium beers but may be lacking a top local brew. Enter Shanghai Beer.

The name was first used in 1949 after liberation. But the product was lost in a sea of similar brands.

Foster's bought it in the early 1990s and two years ago, took it off the market while it refined the brewing process and allowed some time for the brand to shed what baggage it had.

While the hundreds of smaller breweries in China are spotty in terms of consistency, Foster's developed a new formula and mechanized brewing in search of consistency, explained Ross Shaw, the man in charge of Foster's brewery in Shanghai.

"What I wanted to do was reposition it as a beer that could compete globally. I wanted to create some daylight between the old beer and the new beer," said Loynes.

The logo, a slinking red dragon, survived the transition. The beer is available in small bottles; and for draft, the company developed a pouring font with a dragon's head which freezes condensation on the outside. "We wanted something that would be linked to Chinese heritage," Loynes said. "Authenticity is very important for the brand."

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