According to Asia Pacific Breweries CEO, Koh Poh Tiong, the development will generate significant volume increase and set the stage for growth in China, where APB's beer portfolio includes Tiger and Anchor, and local brands Reeb and Aoke. "This makes economic and strategic sense for APB.
Capacity utilisation of our Shanghai brewery will increase significantly, while cost savings arising from local production can be invested into building the Heineken brand and volume growth activities in China."
Mark Kennedy, director of marketing and brand strategy at Landor, said the strategy would enable Heineken to position its brand on the premium end of the market next to Budweiser, and would see the brand step up below-the-line activities and print advertising.
He added: "Manufacturers don't have much control over the pricing; it's very much up to the retailers. Beer is a volume-driven industry and that's where Heineken will benefit ... in most markets, the beer volume is static or falling. In China there's still untapped consumption levels."