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Current Position:Home » News » Beverages & Alcohol » Alcohol » Topic

Czech Beer Makers Set Their Sights on the East

Zoom in font  Zoom out font Published: 2014-06-27  Origin: esmmagazine  Views: 6
Core Tip: In 2013, Czech beer export volumes rose 9 per cent from a year ago to 3.4 million hectoliters, according to the Czech Beer and Malt Association.
Five years after the munCzech beericipality of Nachod in the Czech Republic sold Primator Brewery to privately held Liberec Investment Fund, the beermaker is trying to make up for stagnant domestic sales by going beyond traditional European markets to build on export sales that have already quadrupled in the past decade.

“There’s been enormous interest from markets we’ve previously never heard from,” said Primator's export manager Lenka Krausova. “We see a huge potential in those new countries.”

As the summer season begins to sizzle, Czech brewers like SABMiller Plc’s Plzensky Prazdroj AS, the maker of Pilsner Urquell, Primator, Budejovicky Budvar NP and Molson Coors Brewing Co.’s Pivovary Staropramen AS, are lining up against other international brands to win over drinkers in former Soviet republics to the east and Asia. Czech beermakers are betting they have an edge with campaign ads that tout European Union-protected Czech Beer and props such as 49-foot-tall wooden goats made by the maker of Pilsner Urquell that resemble Trojan Horses.

The success in finding a foothold in more-exotic destinations will depend on how well they address unfamiliar regulations, different drinking habits and low incomes among new consumers, said Amin Alkhatib, a London-based analyst at Euromonitor.

“Lots of producers of traditional brews, like pilseners or wheat beers in Europe, have been looking at stagnating domestic markets for quite a while, so to move beyond to Asia or even Latin America is a natural opportunity,” Alkhatib said. “It will take some time to assess whether they really manage to establish themselves there.”

In 2013, Czech beer export volumes rose 9 per cent from a year ago to 3.4 million hectoliters, according to the Czech Beer and Malt Association. Exports to the EU rose 4 per cent, while the volume of beer shipped to new markets, including Moldova, South Korea, Israel and Belarus, jumped a record 35 per cent last year, the group said.

Though Czech annual per-capita consumption is still the highest in the world, it stagnated at 144 liters in 2013 from the year before and is down from 159.3 liters in 2009.

Czech-Made

Czech beers have a chance to reach sustainable growth in Asia, the Pacific region and South America by using the “Czech Beer” geographical indication label approved by the EU in 2008 as an advertising advantage, said Vladimir Balach, the head of the Czech Beer and Malt Association. Geographical indications protect product labels such as Champagne, Feta and Parma ham from being used by producers outside the indicated region.

Carrying the Czech Beer label requires the use of specific types of Czech-grown barley and hops that give the domestic brew its characteristic bitterness, aroma and drinkability, Balach said.

“It’s the quality and distinctive flavour that rules global markets now and the traditional Czech lagers have them both,” Prazdroj marketing director Grant McKenzie said in an interview in Prague.

Prazdroj, the largest Czech beer maker, recorded its fastest growth in Georgia, Kazakhstan, Belarus, Moldova and Russia last year, according to McKenzie.

Goat Diplomacy

In town squares from Moldova to Georgia, the Pilsen, Czech Republic-based Prazdroj is using towering wooden goats to advertise its second label, Kozel, which means goat in Czech. At the foot of the structures are outdoor bars to dole out half-liters of the golden liquid.

The overall volume of all Czech beer sold in these countries may double in the next five to seven years, McKenzie said.

State-owned Budejovicky Budvar, the maker of the Czech version of Budweiser, exported 763,000 hectoliters abroad in 2013, a record in its 118-year history, and added seven new countries including Turkmenistan, Peru and Singapore to its 65 markets, spokesman Petr Samec said.

At Primator, founded in 1872 in Nachod, Krausova is touting the company as a small-time producer that avoids mass-production techniques. The brewer won the top prize at the World’s Best Beers Awards in 2013 with its Weizen beer. Though Poland remains the company’s largest export market, Krausova is swamped with e-mail from China, Israel, Chile, Indonesia, South Korea and Khazakhstan. The company sold 27,715 hectoliters, or 22 percent of its total output, for €1.6 million abroad and wants to build on that.

“People like us because they want authentic Czech lager that isn’t produced on a mass scale,” Krausova said. “We may not be able to go to Germany and Austria. But we can handle exports to Turkey or China.”

 
 
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