Beer in The Philippines: Euromonitor International June 2016
Beer in The Philippines: Euromonitor International June 2016
Euromonitor International
June 2016
BEER IN THE PHILIPPINES Passport I
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BEER IN THE PHILIPPINES Passport 1
TRENDS
Total volume sales of beer saw a negligible decline in 2015, as the category continued to face
competition from spirit-based RTDs and low-priced domestic spirits. Total volume sales
reached 1,632 million litres by the end of 2015. Volume sales of domestic mid-priced lager
were static.
There is increased availability of imported lager in supermarkets, hypermarkets, convenience
stores and other large-scale retailers, particularly Asahi Super Dry and Kirin Ichiban Shibori.
As there are more choices for consumers to try beyond the top imported lagers, such as
Budweiser and Heineken, they were more likely to try imported lager, therefore positively
affecting the overall demand for domestic lager. The slow increase for craft beer in
foodservice took away some volume sales of domestic lager, particularly domestic premium
lager.
Imported premium lager recorded the highest growth of 1% in 2015, reaching 1.1 million litres
in total volume sales. More than just increasing its availability and shelf-space in modern trade
channels, the leader Heineken strengthened its presence through event marketing and by
offering five-litre kegs in some off-trade establishments.
Premium lager registered a 3% decline in total volume sales in 2015, despite the growth of
imported premium lager. Demand for mid-priced lager also slowed down, as it showed a static
performance in total volume terms. However, the increasing availability of domestic mid-
priced lager in Visayas and Mindanao dragged down the demand for economy lager. The
significant decrease in premium lager indicates that consumers are gravitating towards mid-
priced lager, which is more widely available in on-trade and off-trade establishments, due to
taste preferences. The decreasing difference in the price point of imported lager compared
with domestic premium lager also encouraged brand switching.
The total average unit price of beer increased by 2% in current terms in 2015, as domestic
premium lager and imported premium lager continued to decrease the price difference with
mid-priced products, particularly in the on-trade channel.
Beer consumption in the Philippines cuts across gender demographics and socioeconomic
classifications. For instance, flavoured lager is preferred by women for its sweet profile and
lower alcohol content. Weight-watchers, on the other hand, prefer low calorie beer. Beer
manufacturers offer brands which target specific socioeconomic groups with different price
points in order to capture a bigger consumer base. However, foodservice finds both men and
women showing an interest in the consumption of craft beer.
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BEER IN THE PHILIPPINES Passport 2
The off-trade channel contributes more to sales of beer, accounting for a 76% share of total
volume sales in 2015, despite a better volume performance in the on-trade channel. Whilst a
large share of volume sales is derived from traditional retailers such as sari-sari stores (small
neighbourhood convenience stores), the increasing number of restaurants and bars led to an
increase in on-trade sales, particularly for domestic mid-priced lager. For premium lager,
however, there is an almost equal distribution of volume sales derived from the on-trade and
off-trade channels, in particular because of the greater availability of imported lager in on-
trade establishments. Despite the increasing availability of imported lager in supermarkets
and hypermarkets, traditional retailers and sari-sari stores still do not sell these products.
Domestic premium beer is also heavily targeted towards on-trade consumption; albeit that it
competes directly with domestic mid-priced beer and craft beer in the on-trade channel.
Beer in the Philippines is most often packaged in glass bottles in both the off-trade and on-
trade channels. Domestic lager mainly uses returnable glass bottles; this beer is consumed
within a foodservice outlet or purchased from sari-sari stores. However, to avoid the
inconvenience of returning glass bottles and collecting the deposit refund, selected brands
sold in supermarkets and convenience stores come in metal beverage cans.
Non-alcohol beer was virtually non-existent in the Philippines in 2015, with very limited
availability through speciality importers. San Miguel Brewery is the only domestic
manufacturer of flavoured lager with a low alcohol content of 3%, San Miguel Flavoured Beer,
which comes in apple and lemon flavours. The brand appeals to women and consumers who
do not like the taste of standard lager, which is why it directly competes with spirit-based
RTDs and other spirits. Meanwhile, San Miguel Zero has an alcohol content of 2.6%.
Craft beers in the Philippines are specialty or even “artisan” beers produced by small, private,
independently-run breweries. The popularity of craft beer has been growing in selected cities
in Metro Manila, which is manifested in the increased availability of craft beer in foodservice
and at craft beer festivals such as Circuit Brew Fest and Brew Fest Manila, held in 2015.
However, it is targeted towards a niche market, particularly high-income consumers aged 25
and over. A newcomer is Pedro Brewcrafters, which has a microbrewery in San Pedro,
Laguna, and offers three craft beer variants. Craft beers are usually sold in on-trade
establishments in major cities, and have not gained the traction for wider distribution, and
Pedro is the only locally-made craft beer carried by an off-trade channel, Family Mart
convenience stores.
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BEER IN THE PHILIPPINES Passport 3
and Stella Artois until the end of 2014. Other speciality importers import beer from other
regions in Asia, South America and Europe.
Lager in the Philippines is dominated by domestic products, with total volume sales of 1,631
million litres, making up 99% of total volume sales in 2015. Imported lager accounted for total
volume sales of only 1.1 million litres, but grew by 1% from 2014, in contrast to domestic
lager, which saw a negligible decline because of the increased availability of imported lager
and direct competition from spirit-based RTDs.
COMPETITIVE LANDSCAPE
San Miguel Brewery dominated beer in total volume terms in 2015. The company‟s lager
brands are leaders across all domestic lager categories. Its volume sales saw a slight decline
in 2015, but the company maintained a share of 91% of total volume sales, with sales of
1,489 million litres. The company continued increasing its market visibility and implemented
stronger above-the-line advertising and trade marketing campaigns.
Of the very few craft brewers in the Philippines, Katipunan Craft Beer, is the most prominent
and most visible in various niche channels. The microbrewery is based in Manila, and has a
range of craft beers in its portfolio, most of which are dark beer. The brands are available
mostly in upscale on-trade establishments, speciality food markets and speciality retailers in
Metro Manila and selected cities around the country that have tourist traffic (Baler and
Boracay). However, Pedro Brewcrafters‟s three craft beer variants are the only local craft
beers available not just in on-trade channels and speciality liquor shops, but also in the
convenience store chain, Family Mart. They are distributed in glass bottles, and on tap when
available.
Asia Brewery recorded the biggest decrease in sales in 2015, of 1% in total volume terms.
Colt 45 and Beer na Beer are mid-priced lager brands which are less well-distributed
compared with the four brands of San Miguel Brewery in this category.
Domestic brands continue to dominate beer in the Philippines, with total volume sales of
1,631 million litres. Total volume sales of domestic brands, however, recorded a slight decline
from 2014, as imported brands recorded growth of 1% in 2015.
In 2014 Asia Brewery launched the first domestic wheat beer which aims to target Millennials,
Brew Kettle, alongside the reformulated Colt 45. In the same year, the partnership between
Asahi Breweries and Asia Brewery allowed the latter to launch and distribute Asahi Super
Dry, an imported lager with previously limited visibility. The local brewery also launched a
version of Brew Kettle in metal beverage cans in 2015. However, more new imported lagers
were introduced in the market in 2015, such as Asian lagers Harbin, Chang and Hite, as well
as the Spanish beer Estrella Galicia 1906 Red Vintage.
Domestic mid-priced lager brands continue to dominate total volume sales of beer, since the
top three brands with the most volume share, Red Horse, San Miguel Pale Pilsen and San
Mig Light, all fall under this category. Domestic premium lager continues to decline in
popularity, as imported premium lager brands such as Heineken, Budweiser and Kirin Ichiban
Shibori achieved stronger volume sales growth in 2015.
There are two major breweries in the Philippines, namely San Miguel Brewery and Asia
Brewery. San Miguel Brewery operates six production facilities, whilst Asia Brewery has two
production facilities. San Miguel Brewery has a greater advantage than its competitor, Asia
Brewery, in terms of production and distribution, with its greater number of breweries
strategically located throughout the country.
At the end of the review period, no private label brands were present in beer in the
Philippines.
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BEER IN THE PHILIPPINES Passport 4
PROSPECTS
During the forecast period beer is expected to increase by a CAGR of 2% in total volume
terms. The increase in the excise tax since 2013 will continue to hamper total volume growth
during the forecast period, as most beer drinkers, particularly of domestic economy lager and
mid-priced lager, belong to the low-income group. However, cost-containment measures by
beer manufacturers, such as maximisation of the glass bottle system and efficient distribution,
as well as trade promotions in off-trade channels, will offset the impact of excise taxes.
Imported premium lager is expected to see the fastest growth in beer during the forecast
period, primarily because of Asia Brewery‟s distribution of Asahi Super Dry and San Miguel
Brewery‟s distribution of Kirin Ichiban Shibori. These two brands will continue to have access
to the distribution networks of these two local breweries, which other imported premium lager
brands do not have. Importers will also contribute to the positive prospects for imported lager
as they distribute more brands.
In terms of domestic lager, domestic mid-priced lager is expected to see the fastest growth
during the forecast period, as brands within this category, particularly Red Horse, San Miguel
Pale Pilsen and San Mig Light, have strong brand equity. Domestic premium lager is
expected to decline further, as it faces direct competition from imported premium lager, and
even domestic mid-priced lager. Meanwhile, the increasing availability of domestic mid-priced
lager where domestic economy lager is available will drive down sales of the former.
However, spirit-based RTDs remain a close substitute for domestic lager, which therefore
poses a threat to the potential forecast growth of domestic lager.
As the beer category recovers from excise taxes, the average unit price is expected to
stabilise after 2015. However, price competition will remain crucial, particularly because of the
fragmentation of the category due to the availability of more imported products.
New product launches are expected to see higher availability in the off-trade channel, but are
not likely to reach significant shares, as imported lager is relatively fragmented. Beer
manufacturers are likely to counter the presence of these new products through implementing
more marketing efforts and promotions.
San Miguel Brewery and Asia Brewery will continue to implement marketing campaigns which
encourage beer consumption, via both traditional and digital advertising. There will also be
event marketing efforts for both beer manufacturers and importers. For example, San Miguel
Brewery annually organises Oktoberfest, a beer festival with games and music, and a
National Beer Drinking Contest. A number of craft beer festivals also took place in 2015,
which are likely to continue in the forecast period.
The on-trade channel is expected to see faster growth, as consumers are more likely to be
open to trying imported lager in bars and restaurants compared with supermarkets and other
off-trade channels where domestic lager brands are available. Beer is also a popular choice
during social occasions in the on-trade channel, as it is priced lower in comparison with
products in other alcoholic drinks categories.
CATEGORY BACKGROUND
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BEER IN THE PHILIPPINES Passport 5
CATEGORY DATA
Table 1 Sales of Beer by Category: Total Volume 2010-2015
million litres
2010 2011 2012 2013 2014 2015
Dark Beer - - - - - -
- Ale - - - - - -
- Sorghum - - - - - -
- Weissbier/Weizen/ - - - - - -
Wheat Beer
Lager 1,589.9 1,614.4 1,638.8 1,630.6 1,636.1 1,632.4
- Flavoured/Mixed Lager - - - - - -
- Standard Lager 1,589.9 1,614.4 1,638.8 1,630.6 1,636.1 1,632.4
-- Premium Lager 5.8 6.0 5.5 5.3 4.7 4.6
--- Domestic Premium 5.3 5.1 4.5 4.3 3.6 3.5
Lager
--- Imported Premium 0.6 0.9 1.0 1.1 1.1 1.1
Lager
-- Mid-Priced Lager 1,458.0 1,478.2 1,499.2 1,490.2 1,492.2 1,492.5
--- Domestic Mid-Priced 1,458.0 1,478.2 1,499.2 1,490.2 1,492.2 1,492.5
Lager
--- Imported Mid-Priced - - - - - -
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BEER IN THE PHILIPPINES Passport 6
Lager
-- Economy Lager 126.0 130.2 134.1 135.1 139.2 135.3
--- Domestic Economy 126.0 130.2 134.1 135.1 139.2 135.3
Lager
--- Imported Economy - - - - - -
Lager
Non/Low Alcohol Beer - - - - - -
Stout - - - - - -
Beer 1,589.9 1,614.4 1,638.8 1,630.6 1,636.1 1,632.4
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
PHP million
2010 2011 2012 2013 2014 2015
Dark Beer - - - - - -
- Ale - - - - - -
- Sorghum - - - - - -
- Weissbier/Weizen/ - - - - - -
Wheat Beer
Lager 145,444.8 153,487.0 156,756.4 160,243.2 157,698.0 161,190.3
- Flavoured/Mixed Lager - - - - - -
- Standard Lager 145,444.8 153,487.0 156,756.4 160,243.2 157,698.0 161,190.3
-- Premium Lager 846.5 1,063.1 1,070.9 1,102.0 1,070.6 1,085.7
--- Domestic Premium 597.4 606.6 567.7 584.3 528.1 525.1
Lager
--- Imported Premium 249.2 456.5 503.2 517.7 542.4 560.7
Lager
-- Mid-Priced Lager 138,085.9 145,431.2 148,339.8 151,783.3 149,305.7 152,858.1
--- Domestic Mid-Priced 138,085.9 145,431.2 148,339.8 151,783.3 149,305.7 152,858.1
Lager
--- Imported Mid-Priced - - - - - -
Lager
-- Economy Lager 6,512.4 6,992.7 7,345.8 7,357.9 7,321.7 7,246.5
--- Domestic Economy 6,512.4 6,992.7 7,345.8 7,357.9 7,321.7 7,246.5
Lager
--- Imported Economy - - - - - -
Lager
Non/Low Alcohol Beer - - - - - -
Stout - - - - - -
Beer 145,444.8 153,487.0 156,756.4 160,243.2 157,698.0 161,190.3
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
Dark Beer - - -
- Ale - - -
- Sorghum - - -
- Weissbier/Weizen/Wheat Beer - - -
Lager -0.2 0.5 2.7
- Flavoured/Mixed Lager - - -
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BEER IN THE PHILIPPINES Passport 7
Dark Beer - - -
- Ale - - -
- Sorghum - - -
- Weissbier/Weizen/Wheat Beer - - -
Lager 2.2 2.1 10.8
- Flavoured/Mixed Lager - - -
- Standard Lager 2.2 2.1 10.8
-- Premium Lager 1.4 5.1 28.3
--- Domestic Premium Lager -0.6 -2.5 -12.1
--- Imported Premium Lager 3.4 17.6 125.0
-- Mid-Priced Lager 2.4 2.1 10.7
--- Domestic Mid-Priced Lager 2.4 2.1 10.7
--- Imported Mid-Priced Lager - - -
-- Economy Lager -1.0 2.2 11.3
--- Domestic Economy Lager -1.0 2.2 11.3
--- Imported Economy Lager - - -
Non/Low Alcohol Beer - - -
Stout - - -
Beer 2.2 2.1 10.8
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
million litres
2010 2011 2012 2013 2014 2015
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BEER IN THE PHILIPPINES Passport 8
PHP million
2010 2011 2012 2013 2014 2015
% volume growth
2014/15 2010-15 CAGR 2010/15 TOTAL
% total volume
Company 2011 2012 2013 2014 2015
% total volume
Company 2011 2012 2013 2014 2015
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BEER IN THE PHILIPPINES Passport 9
% total volume
Brand (Global Brand Company 2012 2013 2014 2015
Owner)
Red Horse (San San Miguel Brewery Inc 56.4 57.6 58.1 58.3
Miguel Corp)
San Miguel Pale San Miguel Brewery Inc 14.9 14.8 14.9 15.0
Pilsen (San Miguel
Corp)
San Mig Light (San San Miguel Brewery Inc 9.3 9.5 9.5 9.6
Miguel Corp)
Gold Eagle (San San Miguel Brewery Inc 8.2 8.3 8.5 8.3
Miguel Corp)
Colt 45 (SABMiller Asia Brewery Inc 5.5 4.8 4.6 4.5
Plc)
Beer na Beer Asia Brewery Inc 4.9 4.3 3.8 3.8
Red Horse Beer (San San Miguel Corp - - - -
Miguel Brewery Inc)
San Mig Light (San San Miguel Corp - - - -
Miguel Brewery Inc)
San Mig Strong Ice San Miguel Corp - - - -
(San Miguel Brewery
Inc)
San Miguel Pale San Miguel Corp - - - -
Pilsen (San Miguel
Brewery Inc)
Others Others 0.8 0.7 0.6 0.6
Total Total 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
million litres
2009 2010 2011 2012 2013 2014
million litres
2009 2010 2011 2012 2013 2014
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BEER IN THE PHILIPPINES Passport 10
PHP million
2009 2010 2011 2012 2013 2014
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BEER IN THE PHILIPPINES Passport 11
million litres
2009 2010 2011 2012 2013 2014
PHP million
2009 2010 2011 2012 2013 2014
© Euromonitor International
BEER IN THE PHILIPPINES Passport 12
million litres
2015 2016 2017 2018 2019 2020
Dark Beer - - - - - -
- Ale - - - - - -
- Sorghum - - - - - -
- Weissbier/Weizen/ - - - - - -
Wheat Beer
Lager 1,632.4 1,636.5 1,656.9 1,686.2 1,719.8 1,756.6
- Flavoured/Mixed Lager - - - - - -
- Standard Lager 1,632.4 1,636.5 1,656.9 1,686.2 1,719.8 1,756.6
-- Premium Lager 4.6 4.4 4.3 4.3 4.3 4.4
--- Domestic Premium 3.5 3.3 3.2 3.2 3.1 3.1
Lager
--- Imported Premium 1.1 1.1 1.1 1.1 1.2 1.2
Lager
-- Mid-Priced Lager 1,492.5 1,500.1 1,522.9 1,553.7 1,588.5 1,626.4
--- Domestic Mid-Priced 1,492.5 1,500.1 1,522.9 1,553.7 1,588.5 1,626.4
Lager
--- Imported Mid-Priced - - - - - -
Lager
-- Economy Lager 135.3 132.0 129.7 128.2 127.0 125.9
--- Domestic Economy 135.3 132.0 129.7 128.2 127.0 125.9
Lager
--- Imported Economy - - - - - -
Lager
Non/Low Alcohol Beer - - - - - -
Stout - - - - - -
Beer 1,632.4 1,636.5 1,656.9 1,686.2 1,719.8 1,756.6
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
© Euromonitor International
BEER IN THE PHILIPPINES Passport 13
PHP million
2015 2016 2017 2018 2019 2020
Dark Beer - - - - - -
- Ale - - - - - -
- Sorghum - - - - - -
- Weissbier/Weizen/ - - - - - -
Wheat Beer
Lager 161,190.3 162,807.9 166,221.7 170,814.2 175,869.6 181,180.7
- Flavoured/Mixed Lager - - - - - -
- Standard Lager 161,190.3 162,807.9 166,221.7 170,814.2 175,869.6 181,180.7
-- Premium Lager 1,085.7 1,078.9 1,076.6 1,088.4 1,110.2 1,140.7
--- Domestic Premium 525.1 511.3 499.7 495.5 495.8 498.7
Lager
--- Imported Premium 560.7 567.7 576.9 592.9 614.4 642.0
Lager
-- Mid-Priced Lager 152,858.1 154,643.8 158,169.5 162,818.0 167,910.5 173,243.2
--- Domestic Mid-Priced 152,858.1 154,643.8 158,169.5 162,818.0 167,910.5 173,243.2
Lager
--- Imported Mid-Priced - - - - - -
Lager
-- Economy Lager 7,246.5 7,085.2 6,975.6 6,907.8 6,848.8 6,796.8
--- Domestic Economy 7,246.5 7,085.2 6,975.6 6,907.8 6,848.8 6,796.8
Lager
--- Imported Economy - - - - - -
Lager
Non/Low Alcohol Beer - - - - - -
Stout - - - - - -
Beer 161,190.3 162,807.9 166,221.7 170,814.2 175,869.6 181,180.7
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Dark Beer - - -
- Ale - - -
- Sorghum - - -
- Weissbier/Weizen/Wheat Beer - - -
Lager 0.3 1.5 7.6
- Flavoured/Mixed Lager - - -
- Standard Lager 0.3 1.5 7.6
-- Premium Lager -2.7 -0.9 -4.2
--- Domestic Premium Lager -3.8 -1.9 -9.2
--- Imported Premium Lager 0.8 2.2 11.4
-- Mid-Priced Lager 0.5 1.7 9.0
--- Domestic Mid-Priced Lager 0.5 1.7 9.0
--- Imported Mid-Priced Lager - - -
-- Economy Lager -2.5 -1.4 -7.0
--- Domestic Economy Lager -2.5 -1.4 -7.0
--- Imported Economy Lager - - -
Non/Low Alcohol Beer - - -
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BEER IN THE PHILIPPINES Passport 14
Stout - - -
Beer 0.3 1.5 7.6
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Dark Beer - - -
- Ale - - -
- Sorghum - - -
- Weissbier/Weizen/Wheat Beer - - -
Lager 1.0 2.4 12.4
- Flavoured/Mixed Lager - - -
- Standard Lager 1.0 2.4 12.4
-- Premium Lager -0.6 1.0 5.1
--- Domestic Premium Lager -2.6 -1.0 -5.0
--- Imported Premium Lager 1.2 2.7 14.5
-- Mid-Priced Lager 1.2 2.5 13.3
--- Domestic Mid-Priced Lager 1.2 2.5 13.3
--- Imported Mid-Priced Lager - - -
-- Economy Lager -2.2 -1.3 -6.2
--- Domestic Economy Lager -2.2 -1.3 -6.2
--- Imported Economy Lager - - -
Non/Low Alcohol Beer - - -
Stout - - -
Beer 1.0 2.4 12.4
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
© Euromonitor International