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Expanding The Czech Beer Market

Expanding The Czech Beer Market TRENDS IN THE CZECH BEER MARKET/MARKET SELECTION The Czech Republic has the largest beer consumption per capita in the world. They consume at a level of 167 liters per capita. That is almost double the consumption level of the United States. Even with the highest world beer consumption, the Czech Republic is still not a growth market for the beer industry. In the past century the number of breweries in the country has fallen from 200 to under 70 .

Over the past three years the market has grown less than 1% annually. The market is stagnate and not showing any signs of changing in the future. Therefore, if Budvar would like to experience growth in the beer market they will need to look elsewhere for the growth. In order to assess the potential for growth outside of the Czech Republic it is necessary to perform a market selection. We chose 11 different countries and rated them based on the countrys policitical stability, economic stability, religious restrictions, beer consumption growth and liters per capita beer consumption.

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This can be seen on the exhibit on the following page. Looking at the results you can see that China is the only country who does not meet the liters per capita requirement. However, they are also the only country who is growing at a rate of 25% per annum in their beer consumption. This rate of growth coupled with the population of over 1.2 billion people creates a very attractive combination. After five years at a rate of 25% growth, the per capita beer consumption in China will increase to over 40 liters per capita compared with the current 14 liters per capita consumed. Therefore, we feel that the greatest opportunity for future growth will come from implementing an expansion strategy for Budvar in China.

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