Philippines demand for imported beer seen rising by 38% this year

MANILA, Philippines — The Philippines may raise its beer imports by more than a third this year amid increasing demand due to the resumption of economic activities and the country’s young and growing population, the United States Department of Agriculture (USDA) said.

In the latest report by its Foreign Agricultural Service (FAS), the USDA said traders are forecasting that Philippine  import of beer may  reach $4.7 billion this year, topping 2021 by 38 percent.

So far, beer imports have gone up  by 52 percent as of July, it said.

“While imported beer accounts for less than one percent of total consumption, traders are optimistic the country’s resumption of economic activities and its young and growing population will drive sales of imported craft beer in the coming years,” the USDA said.

The projected increase in beer imports follows the uptick in shipments starting last year, as the coronavirus lockdowns eased.

The USDA said the Philippines has seen declining beer imports since 2018, after AB Heineken Philippines began to brew Heineken beer and Tiger Beer locally.

At that time, the volume of imports dropped  by 29 percent to 4.8 billion liters.

This is coming from the 6.7 million liters imported in 2017, which was the highest on record.

Heineken beer and Tiger Beer, produced by Malayan Breweries in Singapore, comprised the bulk of Philippine imports then.

Other imported beer are Budweiser from Vietnam, Stella Artois from Belgium, Tsingtao from China, Pilsner Urquell from Chezh Republic, Corona from Mexico, and Singha from Thailand.

The US agency said the local food and beverage consumption is driven by a strong and growing consumer base and a young population, with 51 percent under the age of 24.

It noted that while gross national income (GNI) per capita stood at $3,300 (P188,793 at P57.21:$1)  in 2021, 20 percent of the population—or more than 20 million people—earn an average of $12,700 (roughly P726,500) annually.

“Some analysts describe the Philippines as a consumption ‘sweet spot’ despite broad income disparity,” the USDA said.

With the robust Philippine beer industry, the USDA said there are strong opportunities for US exporters to supply beer brands and brewing ingredients.

“Beer is the most widely consumed alcoholic beverage in the Philippines, accounting for 72 percent of total alcohol consumption or 2.1 billion liters annually,” it said.

The United States used to be the top eight beer exporter to the Philippines, but has lagged since 2018.

“The lack of imported beer variety in the market sparked interest among the large retail chains to import US commercial and craft beer brands,” the USDA said.

Moreover, the Philippines has membership in various free trade agreements and has a strategic location, it said.

“Commercial production of hops and barley in the Philippines is non-existent. In 2021, the Philippines imported close to $44 million worth of malt primarily from Australia and China, and $1.4 million worth of hop cones from Germany, the Netherlands, and the United States,” the US agency said.

The USDA also took note of microbreweries that have opened shop following the influx of imported craft beer.

These microbreweries banded together in 2015 to form the Craft Beer Association of the Philippines (CBAP).

This is to primarily to consolidate their orders of brewing ingredients, collectively promote their brands through social media and special events and encourage home brewers to get on the commercial brewing bandwagon by offering technical seminars.

CBAP membership has about 50 microbreweries all over the Philippines including Baguio Craft, Crazy Carabao, Engkanto, Monkey Eagle and Nipa Brew.

Source: https://www.philstar.com/business/2022/11/14/2223549/philippines-demand-imported-beer-seen-rising-38-year