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					Global beer market trends
                                                      Alcohol category growth                            Beer growth trends
                                                      %                                                  %
                                                      100                                      Wine      10

                                                      80                                      Spirits    8

                                                      60




                                                                                                                                                                          Central & South America
                                                                                                         6

                                                      40




                                                                                                                       North America

                                                                                                                                        Western Europe

                                                                                                                                                         Eastern Europe
                                                                                                         4
                                                                                               Beer




                                                                                                                                                                                                                    Australasia
                                                      20
                                                                                                         2




                                                                                                               World




                                                                                                                                                                                                    Africa

                                                                                                                                                                                                             Asia
                                                               02    04     06   08     10       12
                                                      Beer share of alcohol trends in major              Five year beer compound annual growth
                                                      emerging markets                                   rate (CAGR) by region – 2003 to 2008
                                                      Source: Datamonitor                                Source: Canadean



Global growth trends in alcohol                      disposable incomes increased. In Western            and South America and 3.0% in Africa
During the past five years, on a pure                Europe, the prevalence of competitive               shows the significant opportunity that still
alcohol-equivalent basis, beer has increased         categories and a shift in beer consumption          exists for premium beer sales in these regions.
its share of total alcohol consumption by            away from on-premise outlets meant that             There is sizeable potential in Colombia and
more than 200 basis points (bps) to 41.1%.           CAGR was negative. More recently,                   Brazil where premium beers respectively
In 2008 the trend slowed somewhat and                consumer spending in Eastern Europe                 claim 3.7% and 5.6% of total sales.
beer’s year-on-year share of total alcohol           has also slowed – an indication, along with
consumption remained flat. In emerging               already high per capita consumption, that           The trend towards premium beer
markets, beer has generally shown higher             the beer category is maturing.                      consumption has slowed somewhat in
growth than other alcohol categories as                                                                  the recent economic downturn. However,
consumers gradually switch from local,               Central and South America grew at a CAGR            down-trading is limited and there are
generally high-alcohol, subsistence products         of 6.3% over the period while North America         notable instances of consumers continuing
towards attractively packaged, higher-quality,       had modest growth at a 0.5% CAGR. Africa            to trade up, both into beer and, within the
commercially produced beer.                          shows strong levels of growth with a five-year      category, into premium products.
                                                     CAGR of 6.4%. Asia’s growth in beer over
In South and Central America, beer’s share           the past five years remains the highest of any      Beer segment trends
of total alcohol consumption is now 51.5%            region, averaging 8.4%. China in particular
with increases in Colombia partly offset             has seen growth in beer averaging 10.7%
by recent declines in Mexico and Brazil.             per year, fuelled by the growing economy            Premium                       18%
In Eastern Europe, beer has been gaining             and the increasing availability of beer.
                                                                                                         Economy                       13%
share from spirits for some time and now
accounts for 48.0% of alcohol consumption.           Looking forward, there is a significant             Mainstream 69%
The past five years have also seen consistent        opportunity for the beer category to grow
gains in Africa and Asia where beer’s share          at the expense of non-commercial forms
of commercially produced alcohol now                 of alcohol, particularly in Latin America,
stands at 49.0% and 32.8% respectively –             Africa and Asia. In Africa, per capita
thanks, partly, to a greater emphasis on             levels are still relatively low but accelerating,   Segment mix within the global beer
quality and accessibility.                           and local players are expanding their               category as at September 2008
                                                     portfolios in all segments. Asia, in general,
                                                                                                         Source: Canadean
In more mature markets, a wider variety of           is seeing rising incomes and higher levels
alcohol products compete in a sophisticated          of beer consumption. In parts of Latin
marketing and retail environment. In North           America, efforts by brewers to transform            Industry consolidation trends
America, beer has been losing share as               the beer category should boost per                  Over the past decade, the beer industry has
spirits have benefited from more extensive           capita consumption.                                 seen significant consolidation and this trend
marketing and greater availability in certain                                                            continued during 2008. On a pro forma
states. That said, beer’s share stabilised           Beer segment trends                                 basis, beer sales by the top 10 players now
at 56.3% during 2008 as the economy                  Over the past five years, the beer industry         total approximately 65% of total global sales
slowed and brewers introduced innovative             has seen a trend towards consumers trading          compared to less than 40% at the start of
products, new packs and marketing                    up to more expensive beers. As a result,            the century.
initiatives. In Western Europe, where beer           premium beer has gained more than 40 bps
now claims 36.8%, the wine category has              and now constitutes 17.9% of total beer             In recent major developments, the division
increased its share as lower-cost offerings          sales. For mainstream beer consumers,               of Scottish and Newcastle’s business
have become more widely available.                   particularly in emerging markets, the most          between Carlsberg and Heineken was
                                                     common trade-up proposition is to attractive,       completed during the first half of 2008
Beer growth trends                                   local, premium brands.                              while InBev acquired Anheuser-Busch
Over the past five years, the beer category                                                              in November 2008.
has maintained a compound annual growth              In markets such as North America and
rate (CAGR) of 4.8% globally.                        Western Europe, premium beer’s share                SABMiller and Molson Coors combined
                                                     of total sales is already well above the            their operations in the USA and Puerto Rico
During this period, Eastern Europe saw               global average. On the other hand,                  to form the new MillerCoors brewing joint
a high single-digit CAGR as personal                 premium’s share of 10.1% in Central                 venture from 1 July 2008.




6 Global beer market trends SABMiller plc Annual Report 2009

				
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