First came the cola. Now comes the beer.
Heineken announced today it will re-enter Myanmar after a 17-year absence, following similar moves by PepsiCo and Coca-Cola. Global marketers are eyeing new growth in the southeast Asian nation as it ends authoritarian policies that had led to sanctions from western countries.
Heineken N.V. will operate in Myanmar through a joint partnership with locally-owned Alliance Brewery Co. Ltd, which is majority owned by businessman Aung Moe Kyaw. The plan is to build a $60 million brewery near the capital city of Yangon that will begin making and selling beer brands including Heineken by the end of 2014.
Heineken, whose flagship brand is the eighth-largest beer in the world, according to Euromonitor, hopes to make inroads in a market now dominated by local brands, such as one brand called Myanmar Beer, which controls 51% of the market, according to Heineken. "This is a truly exciting business opportunity that expands further our exposure to high-growth markets," Heineken CEO Jean-Francois van Boxmeer said in a statement.
Heineken joins global competitor Carlsberg Group, which in February announced a deal to brew and market Carlsberg beers in the country through a partnership with Myanmar Golden Star Breweries.
The brewers are banking on Myanmar's beer market reaching the size of other Asian nations. But there is a long way to go: Per capital consumption in Myanmar is 3 liters per person, compared with 30 liters in Vietnam, 26 liters in Thailand and 36 in China, according to Heineken. (Beer consumption in the U.S. is 75.9 liters per capita, according to Euromonitor.)
Marketing might prove to be a challenge due to advertising restrictions in Myanmar, a country of 60 million people. Beer cannot be advertised on TV, although "limited poster advertising" is allowed as well as sponsorship activities, said Heineken spokesman John-Paul Schuirink. He said it is too early to discuss Heineken's marketing plans.