What is the world's best selling beer? If you're an American you'll probably say Budweiser. In fact, if you are European you'll probably also say Budweiser. South American? Budweiser would probably be the common answer, an international recognition of the supremacy of American products–even the mediocre–on a global scale. But when it comes to beer, the times they-are-a-changing.
Fear not American beer bellies are still as full and round as ever. Per person, Americans drink more beer than any other people in the world. Ha! Take that Germany and Britain. But one always has to remember that when you are talking about global trends, there is always an elephant in the room: Big, bad China of course.
They call it "Snow" and it is the number one selling beer in China and, therefore, the world. What Snow apparently lacks in taste in compensates for in its refreshing effect, wetting the appetite of an increasing interest in beer in the People's Republic. This appetite for Snow and its runner-up, Tsingtao have translated into an exciting opportunity for investors.
As Snow sales have risen, so too has the share price of its parent companies. Snow is brewed by CR Snow, which is a joint venture between China Resources Enterprise and the multinational giant SABMiller (SBMRF). Shares of SABMiller have risen over 8% since this year. In the past three years, shares have risen from $35 to their current level of $55. This study of this stock's chart reveals steady and predictable growth reflective of the equally steady and predictable growth in sales.
In more sad news for American beer enthusiasts, another Chinese beer, Tsingtao (TSGTF) , recently replaced Bud Light as the second best-selling beer in the world, pushing the beloved Super Bowl beer down to number three. While this impressive sales growth hasn't translated into the most impressive share increase, China's second favorite brewery still represents a solid investment opportunity into the Chinese increasing thirst for beer.
Just about everyone agrees that, while China will have its problems, it will continue to be a major player and a major market. And what does their new middle class want? The same products as their American counterparts: cell phones, iPads, cars and, of course, beer…and lots of it. Investing in "Snow" in China is like investing in rain in Seattle. For the foreseeable future at least, they'll be plenty of it.