Competition in Myanmar’s fast-growing beer market is ramping up. On Wednesday, Hiroshi Fujikawa, CEO of Myanmar Brewery Ltd. (MBL), the country’s largest beer firm with 80% of the market (or 65- 70%, if smuggled and imported brands are counted), said that he hopes to double current sales figures for all MBL brands in five years. (The firm racked up $198 million in sales last year.) “To do that we will have to rely not just on the growth of the market, but on innovation and new products to attract new consumers to drink more beer,” he stressed.
Myanmar’s beer market experienced doubled-digit growth in 2015, driven by foreign investment, Fujikawa added. And there is tremendous room for further growth — Myanmar drinks an average of 6 liters of beer per capita each year, compared to 36 to 40 liters per capita in China and Thailand, said Birgitte Weeke, marketing director for Myanmar Carlsberg. According to Euromonitor, the value of Myanmar’s beer market will double from an estimated $375 million this year to $675 million in 2018.
So international drinks firms have been positioning themselves for the long game in Myanmar’s beer market. In May, Danish firm Carlsburg established a brewery in Myanmar; Dutch firm Heineken did the same in July, and Japanese firm Kirin Holdings bought a 55% stake in MBL in August.
MBL is still the industry leader, but its future success is not guaranteed to hold at this level. Unfortunately for the brewery, in August it lost the rights to produce two of its most well-loved brands: ABC stout and Tiger beer. Heineken, which holds the licenses to produce both brands, exercised its contractual right to terminate MBL’s licenses to brew and sell those brands in the country.
This was a blow, Fujikawa admitted, but on September 9, MBL launched a new product to recapture that same customer base. “Black Shield is a stout, and the market for stout is not yet very big, compared with the market for lager,” he said. He hopes the market will grow to a similar size, and the firm says customers have responded well to Black Shield. (Its 8.1% alcohol content is no coincidence; the digits add up to 9, a lucky number in Myanmar.) Early next year, MBL also plans to introduce a competitor to the Tiger brand.
Meanwhile, aside from Carlsburg’s and Heineken’s standard “international premium” beers, they now have their own local beers for the Myanmar market. Carlsberg created Yoma, which will be the firm’s cheapest brand, comparable in price to MBL’s Myanmar Beer. Yoma (translating to “mountain range”) is made with rice from the Bago region and has 5.4% alcohol by volume, because five and four add up to make lucky number nine. Heineken’s recently-created Regal Seven will also target the mainstream market, competing with Myanmar Beer and Yoma.
Despite these new challenges, MBL is optimistic about the future. “Myanmar Brewery is growing so rapidly that we cannot catch the supply up with the demand, but once we are up to full capacity, we can move forward with export plans,” said Tetsuhiko Sato, Kirin Myanmar’s general manager. Japan, Australia, the U.S., Brazil, and Europe are future export targets for the firm.
Cost and taste are key factors, but among comparable brands local tailoring may prove to be the deciding factor. MBL has made that central to its business model. Beneath the declaration “WE ARE MYANMAR,” MBL’s website states “Myanmar Beer reflects the strong local values of the Myanmar people, and the rising aspirations and sense of belonging to the country and patriotism. It has become one of the symbols Myanmar is proud of.”
And the firms’ jockeying for market share is nothing but good news for Myanmar’s consumers: a wider selection at competitive prices. Cheers to that!