Budweiser APAC brewing up big business in China

In Beijing's Great Hall of the People, Jan Craps, CEO and co-chair of Budweiser APAC, took his place among the distinguished members of a delegation led by the Belgian prime minister to China. The visit from Jan 11-12 was deemed as an extraordinary diplomatic mission — a testament to the role of business and commerce, particularly Belgium's storied beer industry, in the fabric of China-Belgium ties.

Craps was honored to join the Belgian prime minister in Beijing as a business leader of the delegation from Belgium and the European Union presidency.

AB InBev, the parent company of Budweiser APAC, is celebrating its 40th anniversary in China. With a legacy spanning 600 years, it represents not only Belgium's rich brewing heritage but its commitment to quality, innovation and perseverance — values that have resonated deeply within China over the past four decades.

During the high-profile meetings with senior Chinese officials, Craps was delighted to present the centuries-old brewing skills and some of the finest beer brands, such as Leffe, Hoegaarden and Stella Artois. He also shared his views and suggestions for further strengthening exchanges and cooperation between China and Belgium, and China and Europe.

Growing for four decades

From its early days in 1984, when it first set foot in Guangzhou, Budweiser APAC has shown a commitment to growth and innovation. Since then, the company has had many milestones to celebrate. In 1995, the first Budweiser brewery was opened in Wuhan. Following a successful initial public offering at the Hong Kong Stock Exchange in 2019, the company's robust presence today is evidenced by its 23,000 employees, a network of 30 breweries, and a portfolio of more than 50 iconic brands that have become a staple in China's beverage landscape.

"We have a lot of things to celebrate," said Craps, whose company recorded an impressive 13.1 percent year-on-year increase in total sales for the first nine months of 2023.

China recorded GDP growth of 5.2 percent in 2023, with the surging preference for quality over quantity being a powerful catalyst for consumption upgrade, according to the National Bureau of Statistics. Craps believes China's anticipated 5 percent annual GDP growth in the coming years will still make it "the largest contributor to absolute GDP growth among any country in the world".

Craps' optimism is supported by the trade-up trend fueled by the country's 400 million middle-income households, a number expected to reach 700 million by 2030, thereby leaving "huge room for growth in the premium market".

As the world's largest beer market, China commands a quarter of global consumption. Yet, the premium beer segment is underdeveloped at only 17 percent, compared to over 40 percent in Western countries, indicating significant growth potential, according to Craps.

Daring to dream big, the company has always spared no effort in setting an industry bench mark for high-quality growth, which resonates well with China's own development trajectory. "We want to upgrade the beer industry and offer more high-quality products. And we also want the beer industry to become high-tech and digital, whether that's about smart breweries or digitizing our whole sales system," he said.

Developing locally

"In China, for China" encapsulates Budweiser APAC's approach of forming a symbiotic relationship with local stakeholders, from aligning strategically with various government levels to establishing a supply chain in China that empowers local suppliers and vendors.

"We call it 'Supplier Strategic Alliance' and 'Vendor Strategic Alliance', where we work together … to improve bench marks, set standards and really develop an optimal supply chain upstream and downstream from our breweries," Craps said.

Yet Budweiser APAC's community-centric approach is most exemplified in its Corona Extra Lime project in Anyue, Sichuan province, which is renowned for lime farming.

"When you drink a bottle of Corona, you might want a slice of lime. So we work with these farmers to increase the quality of the limes and make them the bench mark limes you can buy from anywhere in the world," Craps said. Upon achieving top quality, the company committed to purchasing these limes, distributing them through its wholesalers and retailers in China.

This initiative has greatly boosted local lime growers' productivity and income, offering comprehensive support in aspects like seed selection and soil improvement. By 2023, it yielded more than 740 metric tons, significantly increasing the income per hectare, and aiding in the region's development.

The project's achievements have been widely acknowledged and celebrated. In July 2023, it was honored with the Titanium Lions Award at the Cannes Lions International Festival of Creativity. Remarkably, this marked the very first instance in history of a Chinese case receiving this prestigious accolade.

Sustainable growth

Budweiser APAC has vowed to cut carbon dioxide emissions across the value chain by 25 percent by 2025 and aims for net zero across its value chain by 2040. The brewing powerhouse is not only advocating eco-friendly practices for itself but actively involving its network of partners in creating a sustainable, low-carbon value chain.

Wuhan Brewery, the company's first brewery in China since 1995, achieved carbon neutrality in 2021, becoming the first large brewery within AB InBev globally to do so. "It was here in China that we did it," Craps said with pride, adding that another carbon-neutral brewery is operational in Jinzhou of Liaoning province.

On the green partnership front, Budweiser APAC and Supertime Baoying's joint venture has led to Jiangsu province's first carbon-neutral malt factory in Baoying county, poised for certification within the year.

Also, the company has now mapped 100 percent of the road map of how to get its glass bottles to be carbon neutral in the coming years. By now, it has 10 breweries that use 100 percent renewable energy, and five breweries with zero waste. Craps said: "So we have many different forms in which we make our whole supply chain essentially green and sustainable."

Also sustainable, perhaps even "resilient", is the company's commitment to China. The trade-up trend, the country's pursuit of high-quality growth, and the company's leadership in the premium beer segment, are solid reasons for confidence, Craps said.

"We created lots of employment. We're very happy with our business in China and we're optimistic about China. We'll continue to invest here in the long term," he said.

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