--- title: "Betting on Stout: How Ruthless Is Diageo and AB InBev's Latest Move?" description: "After regaining control of Corona, AB InBev secured exclusive rights to distribute Guinness stout in mainland China from Diageo. On August 28, the two companies launched a five-year cooperation agreement, making AB InBev the sole distributor for all Guinness beer products in mainland China, including cans, bottles, and kegs. With rising imports and evolving consumer tastes, this partnership aims to capitalize on the growing premium beer segment." author: "糖酒快讯团队" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2017-09-03" language: "en" canonical: "https://xinjignxiao.com/en/articles/betting-on-stout-how-ruthless-is-diageo-and-ab-inbev-s-latest-move-8c4f3b66/" markdown: "https://xinjignxiao.com/en/articles/betting-on-stout-how-ruthless-is-diageo-and-ab-inbev-s-latest-move-8c4f3b66.md" original_source: "https://mp.weixin.qq.com/s/lgF6rnzmS3io3yKifpV8wQ" translation: "https://xinjignxiao.com/zh/articles/%E5%90%8C%E6%97%B6%E4%B8%8B%E6%B3%A8%E9%BB%91%E5%95%A4-%E5%B8%9D%E4%BA%9A%E5%90%89%E6%AC%A7%E5%92%8C%E7%99%BE%E5%A8%81%E8%8B%B1%E5%8D%9A%E8%B5%B0%E7%9A%84%E8%BF%99%E6%AD%A5%E6%A3%8B%E5%88%B0%E5%BA%95%E6%9C%89%E5%A4%9A-%E7%8B%A0-8c4f3b66.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/betting-on-stout-how-ruthless-is-diageo-and-ab-inbev-s-latest-move-8c4f3b66/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # Betting on Stout: How Ruthless Is Diageo and AB InBev's Latest Move? > After regaining control of Corona, AB InBev secured exclusive rights to distribute Guinness stout in mainland China from Diageo. On August 28, the two companies launched a five-year cooperation agreement, making AB InBev the sole distributor for all Guinness beer products in mainland China, including cans, bottles, and kegs. With rising imports and evolving consumer tastes, this partnership aims to capitalize on the growing premium beer segment. Click the image for details. After regaining control of Corona, AB InBev has secured exclusive distribution rights for the stout brand Guinness in mainland China from Diageo. On August 28, the two companies launched a five-year cooperation agreement, under which AB InBev will exclusively distribute the full range of Guinness beers in mainland China for the next five years, including all canned, bottled, and draft products. The volume of imported beer has been increasing year by year, and the expansion of beer categories and price tiers at the retail level has gradually driven consumption upgrades among domestic consumers during this competitive cycle. A new group of consumers with stronger brand loyalty and engagement is emerging, and companies are identifying new growth points through category segmentation. Currently, premium beer accounts for only 4% of the domestic market volume but contributes 18% of the industry's profits, making it a key focus for brewers. 1 **The growth potential of the mid-to-high-end beer market is being further unlocked** According to data from the National Bureau of Statistics, China's beer production in June 2017 was 5.092 million kiloliters, a year-on-year increase of 6%. In the first half of this year, cumulative production reached 22.686 million kiloliters, up 0.8% year-on-year. After three years of downturn, China's beer production has seen growth for two consecutive months. Industry insiders point out that the recovery is mainly driven by the expansion of mid-to-high-end beer product lines. During interviews, reporters learned that some consumers have developed a category awareness for beer, moving beyond brand-centric thinking and seeking products that suit their taste and flavor preferences. This has opened opportunities for high-quality beers. Additionally, the expansion of e-commerce channels in terms of brand variety and category depth has further stimulated mainland consumers' desire to try new products in the wave of "thousands of products competing." Beer consumption is becoming more personal and individualized, which has also increased acceptance of mid-to-high-end beers. As a result, craft beers, with their distinctive and artisanal appeal, have become the first to gain popularity. The proactive efforts of upstream manufacturers have sustained market interest in craft beer, and this process has also deepened the dissemination of beer culture and category knowledge, accelerating consumers' understanding of beer categories. This momentum is gradually spreading to other beer segments. 2 **Niche products face a new breakthrough point—this time, is it stout's turn?** The domestic stout category has enormous growth potential. According to data, domestic consumers are expected to consume 264 million liters of stout this year, and in the future, China may surpass the United States to become the world's largest stout market. In the mainland beer market, light beers made from malt remain the mainstream, but stout, as a sub-category, is in the stage of consumer cultivation and brand/product breakthrough. Its characteristics align with the evolving consumption trends in the domestic beer market. First, consumers' demand for differentiated beer flavors is growing, mainly reflected in preferences for "stronger taste" and "higher flavor complexity." Stout beers typically emphasize malt aroma and roasted malt flavors, with a fuller body and a naturally rich color, meeting the taste upgrade needs of future consumer groups. Second, with the enrichment and improvement of imported beer purchasing channels, more quality-oriented and personalized beer categories have become new favorites. The influx of many imported stout brands has created a certain category influence among consumers. However, we must also recognize that compared to the niche craze of craft beer, the category advantages and influence of stout are still limited, and the market is showing signs of further fragmentation. This is mainly due to the aggressive expansion of international beer brands in the domestic market, which are also making new adjustments in cost-performance to target the mass market. Meanwhile, domestic beer brands have been upgrading their products, with some higher-quality products entering the market, partially filling the gaps in category and quality for domestic beers. But this year may be a significant one for the domestic stout market, based on a recent collaboration between two international liquor giants. As early as early July, news spread in the industry that Diageo and AB InBev would jointly expand the domestic stout market. It was reported that AB InBev would become the exclusive distributor for Guinness beer in mainland China, securing a five-year sales right for all Guinness beer products, including cans, bottles, and kegs. On August 28, with the launch of the Diageo-AB InBev Guinness beer distribution cooperation conference in Shanghai, the partnership entered the market operation phase. 3 **How ruthless is Diageo and AB InBev's move?** After 22 years of brand operations and market development, AB InBev has basically completed its strategic layout in the mainland beer market. Currently, AB InBev's Budweiser brand targets the high-end market, while the national brand Harbin Beer is tasked with competing in the mass market. Additionally, regional brands such as Fujian Sedrin, Hubei Jinlongquan, and Changsha Baisha are used to achieve deep penetration in second- and third-tier cities. Guinness, as a core brand under Diageo, has a very mature brand foundation worldwide. However, Diageo's sales channels in mainland China are primarily based on its spirits brands, which differ from beer's strong FMCG attributes. Despite being crowned the "world's number one stout" and enjoying international acclaim, Guinness has not established widespread brand recognition in the domestic market. By partnering with AB InBev, a "China expert," Guinness products will leverage AB InBev's powerful channel advantages to reach more cities and consumers through offline channels such as supermarkets, Western-style bars, and gastropubs, as well as online channels like JD.com and Tmall. Zhu Zhenhao, Managing Director of Diageo Greater China, stated: "To fully unlock Guinness's growth potential in China, the world's largest beer-consuming country, we need a partner with strong beer distribution channels and capabilities in the Chinese market." Earlier, senior AB InBev executives revealed that AB InBev's current products can meet 80% of the market, but challenges remain. Highlighting product differentiation has become a key focus to meet the needs of local beer consumers. Securing the distribution rights for Guinness, an international stout giant, is undoubtedly another major move in its category segmentation strategy, following the introduction of Belgian white beer Hoegaarden and Harbin Beer's launch of a white beer product this year. "This cooperation will further enrich AB InBev's product portfolio and better meet consumers' diverse needs," they said. 4 **"Wolf" is coming? The stout market may face new changes** Under AB InBev's operation, Guinness stout, which now has both brand influence and channel control, will undoubtedly enter a new development stage. This is likely not good news for other stout brands in the domestic market. In the imported beer sections of most large supermarkets, products priced between 18-30 yuan are dominated by beers from Germany, Belgium, Spain, and the UK. In the stout segment, there are numerous German brands, with prices ranging from 8 to 30 yuan. During market interviews, reporters found that the high concentration of origin and the deliberate association of some domestic stouts with German flavor and technology have created a consumer perception that "Germany equals stout." It is foreseeable that Guinness's strong entry into the terminal market will challenge and disrupt this phenomenon. On the other hand, with AB InBev, which has strong market communication capabilities, joining the expansion of the domestic stout market, the initial and subsequent impacts will inevitably accelerate the cultivation of stout taste and drinking popularity among consumers. This will help more consumers understand and accept stout, thereby driving the breakthrough of stout products with brand influence and quality, and contributing to market standardization and maturity. Source: Tangjiu Kuaixun (ID: tjkx99) Click the image for details. The 3rd (CFIC) China FMCG + Internet Conference will be held in Chongqing in October 2017. At this conference, New Distribution has invited over 1,000 distributors, 500 brand owners, founders of 200+ B2B platforms, and 100+ investment institutions to participate. The theme of this conference is: New Forces, New Ecosystem. We will invite well-known domestic B2B industry experts, mentors, and B2B platform founders to discuss the following topics: **Core Topics of the Conference:** > * How can the FMCG industry achieve new growth opportunities through B2B? > > > > > > > * How should the new supply chain behind new retail be built? > > > > > > > * How can intra-city logistics help B2B achieve leapfrog development? > > **Highlights of the Conference:** > * The industry's first "2017 China FMCG B2B Industry Competitiveness White Paper" > > > > > * Case studies of excellent distributors undergoing transformation and upgrading > > > > > * Upgraded conference + exhibition, with Hall 6 Internet Technology Exhibition strengthening networking > > > > > * Leaders from various fields, including Alibaba Retail Link, GL Capital, EAS, Baisi Dianjia, Yijiupi, Unilever, Haiding Technology, and Yunmei, will deliver speeches and share pioneering insights. > > October 17-18, 2017 Chongqing International Expo Center Registration is now open. Long-press the QR code below or click "Read Original" to register. Early bird tickets before September 15 enjoy a 30% discount! Add friend with note "Conference Registration" Click the links below to review the highlights of the first and second FMCG + Internet conferences: 2016 "FMCG + Internet" Summit Forum 2017 (2nd) China FMCG + Internet Conference Click the links below to review the highlights of the first and second FMCG + Internet conferences: [2016 "FMCG + Internet" Summit Forum]() -END- --- ## Copyright and AI use This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL. Contact: zhaobo258@gmail.com · +86 158 5481 7671