Grasping Opportunities in Singapore’s Beer Industry

Beer Industry

The beer has always been the favourite alcoholic beverage for Singaporeans. Alcoholic drinks demand is growing at a very fast pace in emerging countries, such as China, Singapore, India and Indonesia and this is the reason why the alcoholic industry trend is in more demand nowadays. The primary driver of the industry is the increasing demand for premium alcoholic beverages. The major contributing factors for the global alcoholic beverages market are the extension of purchase channels, like convenience stores and online stores and moreover, the influential initiate taken by the alcoholic beverage manufacturers for strengthening their distribution channels. The beer industry is the major leading constituent of the alcoholic beverage sector.

Across the globe, beer is the most consumed alcoholic drink. A wide range of beers are available on offers and still, it cost too much to a person in Singapore. Singaporean beer market is highly immersed around the world with a wide range of products availability. It is the most common alcoholic drink easily available in restaurants and cafes. The average volume per person of the Singaporean in the beer markets amount to 20.9 litres in 2018.

Consumer Trends of Singapore Beer Industry:

Beer is easily available in restaurants and cafes; it is the most common alcoholic beverage in Singapore. The beer industry is categorized into different types, such as ales, stouts & bitters, low/no alcohol beers, premium lager, speciality beer and standard lager. When it comes to beer drinking the consumers in Singapore is more brands conscious. There is always seen a shift in the preferences in the consumers’ choice from local to imported beer. Younger population of Singapore are now more attracted towards the Asian flavoured beer introduced by the local microbreweries. As per the increasing interest of youngsters in local microbreweries, it is expected that flavoured beer is likely to grow in prominence.

Speciality in beers and craft beer always remain niche market amongst the liquor products and also considered as a premium product likewise wine and liquor are. Food and beer pairing events in Singapore is leading a strong interest among the consumers to try out the available variety of beer in the market. Through these events, people are willing to discover the right pairing of beer with different types of cuisines and these events are becoming popular with on-trade channels.

In Singapore, foodservice outlets and supermarkets are the major sources of the sales volume of beer. Also, coffee shops are other traditional establishments to serve local beers and the branded one at cheaper prices.  Other than these marketing and provisional activities during festive seasons such as Oktoberfest, Christmas and Lunar New Year in Singapore is the major tactics of the brands to connect with the consumers. Some major brands available at both the outlet’s retail foodservice and supermarkets are Anchor, Budweiser, Carlsberg, Chang, Coopers, Corona, Duvel, Erdinger, Foster’s, Grolsch, Heineken, Hoegaarden, Kilkenny, Leffe, San Miguel, Singha, Stella Artois, Tiger, Tsingtao and Victoria Bitter, etc.

Distribution Channels of Beer Industry:

The major distribution channels for the alcoholic drinks are specialist retailers, supermarkets/ hypermarkets and on trade businesses. The on-trade sales create the leading distribution channel of alcoholic drinks in Singapore. By 2021, the total alcoholic drinks revenue sale is created through online sales and it will be 2% of total revenue. The average revenue per person in Singapore in the alcoholic drinks market is US$171.75 in 2018. In 2017, Singapore imported $162.6 million beer in the country.

On-trade distribution is the leading distribution channel of the alcoholic drinks in Singapore. Beer or drinks selling through bars, restaurants, clubs, pubs and through other distribution channel specified in the hospitality industry all the channels included in the on-trade distribution. The craft beer available through the on-trade is costlier in comparison to off-trade distribution mode and this is the foremost reason why the market is extensively expanding in the developed economies where the consumers have the high ability of spending. Whereas, off-trade distribution channel, such as retail stores, wholesalers, and online stores as of now, not attracting that many consumers, but it is expected to witness notable growth as this is the segment targeting the group of customers who have low to medium buying power.

Rest of the market is covered by specialist retailers and other channels such as department stores including duty-free stores. Usually, speciality and craft beers imported through importers/distributor providing services to retail outlets (supermarkets) and the food service sector (hotels, restaurants, bars and clubs, etc.) They generally import speciality and craft beers directly from breweries. In Singapore, speciality and craft beers are considered a niche market. Availability of speciality and craft beers are very limited in supermarkets. Sometimes, foodservice outlets often import their suppliers through local beer importers.

Challenges for the Speciality and Craft Beer in the Market:

In Singapore, the speciality beer has stiff competition from local microbreweries, such as Archipelago – a subsidiary of APB, Brewerkz, Harry’s Bar, Paulaner Brauhaus, Red Dot Brewhouse, and Tawandang Microbrewery. Archipelago beers are much cheaper than imported beers but it is slightly costly than local beers. To target a larger number of consumers and to give the beer perfect touch of Asia, it uses Asian spices, such as lemongrass, coriander, Assam and ginger to make it perfect Asian spices flavoured beer.

Belgium speciality/craft beer is the dominating beer of the market with a wide variety of choices, such as abbey beer, craft ales, lager/pilsner, Trappist ales, wheat beer and lambic beer. Later on, distributors of imported speciality/craft beer from America, British, Germany, Italy, New Zealand, Switzerland and Ukraine penetrated. Other than this, each brand of Belgian speciality beer comes with its own beer glassware and it is one of the most unique selling points for the country. Apart from local consumption, Singapore is considered as the part of the Asian regional strategy for the regional market distribution such as Malaysia, Thailand and Vietnam. The local market is quite saturated with the country, so the Singapore beer industry importers are always in seek to grasp the opportunity to expand their distribution network to the region.

Asia Pacific Breweries and Carlsberg the big breweries generally have a huge marketing budget which could benefit in better advertising and promotion targeting at the end consumers. Whereas, smaller breweries specialized in craft beers are introduced by beer importers with an extensive promotional budget. Imported alcoholic drinks in Singapore are generally expensive and the reason being is the high taxes especially for speciality/craft beer with a high level of alcohol content making.

Opportunities for the Beer Industry in the Singaporean Market:

The beer industry is the niche segment of the alcoholic industry market. The younger populations’ increasing interest towards the imported speciality and craft beers is leading the growth of the beer industry market among the brand-conscious youngsters and affluent beer drinkers. Tiger, the national beer is losing popularity among the young drinkers, who are more attracted towards imported beer. The young generation is also fascinated towards Asian flavoured spices beer featured by microbreweries. Flavoured beers are the new attraction centre for the youngsters, noticed by the preferences of the youngsters during the Beerfest Asia.

Entry in this segment of the alcohol industry may be accomplished for small and large scale by observing niche market. Singapore’s powerful tourism and hospitality sector boosting trade consumption for alcoholic beverages. The beer industry’s revenue is expected to be dependent on the tourism industry. In addition, the alcoholic drinks market in Singapore is expected to reach 145ML by 2021 and the average volume per person is 24.2L in 2018. It clearly specifies that people in Singapore have a high capacity of expenditure in alcohol beverages and attracted toward the imported beer and is brand conscious too. It shows the Singaporean market could be a boon for the beer industry and alcoholic beverage businesses.

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