Advertising and Marketing

A blue-collar beer goes upmarket

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The above advertisement appears on the inside front cover of the current issue of Window of the South (南风窗), a respected biweekly business magazine. At first glance it looks like an ad for a wine or a brandy, but closer inspection reveals the actual brand: Pabst Blue Ribbon Beer 1844.

1844 was the year that the Pabst Brewing Company was established in Milwaukee, Wisconsin. In the US, the beer's lack of pretension led to a recent upswing in popularity among hipsters.

With 1844, the brand seems to be targeting a different demographic in the Chinese market.

The ad copy (on the facing page) begins with comparisons to the finest of alcohols:

It's not just Scotch that's put into wooden casks. There's also Pabst Blue Ribbon Beer 1844

Many world-famous spirits
Are matured in precious wooden casks
Scotch whisky, French brandy, Bordeaux wine...
They all spend long days inside wooden casks

It goes on to describe how the premium wood and craftsmanship of the casks creates the beer's wondrous color and flavor, and ends by calling Pabst "truly a treasure among beers."

Does Pabst Blue Ribbon 1844 truly merit such comparisons? It'll cost you around 300 RMB to try a bottle for yourself, according to a Beijing Youth Daily article from last November, when the product was launched.

The article quoted Ni Chunlin, head of Blue Ribbon Beer, which produced Pabst in China:

"China's beer market has an annual sales volume of 40 million tons. So why is the price of beer always around 5 or 10 yuan?"
...
Ni Chunlin said that the release of Blue Ribbon 1844 is aimed at changing consumers' ideas about beer. "The high-end market is occupied by baijiu and wine. Chinese people can afford to drink baijiu that costs tens of thousands, and I believe that a 300-yuan beer won't be a problem either."

Update (2010.07.21): Evan Osnos points to an interview with Alan Kornhauser, Pabst Brewmaster-Asia, from the July issue of All About Beer magazine:

I still like formulating specialty beers. In fact, with Pabst, I just made the first specialty beer in Mainland China. There’s almost no ale in China: I had to smuggle the yeast into the country. I formulated a special high-gravity ale called “1844.” It’s all malt, and we use caramel malts from Germany. The initial aging is dry-hopped rather heavily. Then we do a secondary aging in new uncharred American oak whiskey barrels. We bought 750 brand new barrels to the tune of $100,000. This is a very special beer; it’s retailing for about over $40 U.S. for a 720 ml bottle.

There’s an audience there for it?

There’s the nouveau riche, and in China, perception is everything—look at me, I’m rich. Then also, there is another group that may be part of our market, and that’s state banquet dinners. Normally, you’d drink brandy, and this beer kind of has the look of brandy—it’s a reddish-brown color, but it won’t hurt you as much.

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There are currently 13 Comments for A blue-collar beer goes upmarket.

Comments on A blue-collar beer goes upmarket

I love seeing mid-grade or cheap American brands go upscale when entering the Chinese market. Prior to this I have mostly seen it in the hotel market (Holiday Inn, Howard Johnson). Best of luck to PBR--at 300 RMB it really is a bargain compared to premium baijiu.

I find it very interesting that many American brands are able to sell in the Chinese upmarket relative to their native market, such as Pizza Hut, old Navy, now the 1844, among others. Is it due to lack of investigative journalism on the true identity of the brands, powerful marketing strategy, lack of confidence in the Chinese consumers, or the now increasing need for luxury goods to show off status?

"There's no place I'd rather be than right here, with my red neck, white socks and Blue Ribbon beer..."

"China's beer market has an annual sales volume of 40 million tons. So why is the price of beer always around 5 or 10 yuan?"

Ummmm, because that's a fair price for beer? And 300 rmb a bottle is totally ridiculous when compared to the price of even the most refined craft beers, and moreover, the average income in China.

This guy is completely muddled: the question he should be asking himself is "why should it be 300 yuan?". The justification could be the oak casks, but...

If anyone wants to try oak casked beer, I recommend Innis & Gunn: produced on a relatively small scale in Scotland using genuine oak casks, it comes in a number of varieties and has been recommended by Gordon Ramsey. Cost: equivalent of about 20 RMB per bottle.

This is just blatant profiteering - but a very interesting post for what it reveals about the superficial nature of a culture of supposed high-end consumption. Luckily it seems 1844 didn't catch on...

@C. Lou: Yes.

不求最好,但求最贵!

It's also interesting to see the popularization of brands like H&M and Uniqlo as choices for the hip middle-class, some of whom are white-collar workers. And obviously, these brands win out over local 'white-collar' brands and traditional outfits like the ones you would find at 百货大楼 in Beijing or the Friendship store. It's particularly striking when, if you live in the West, these stores are not the most sophisticated -- often targeted at high school girls and boys, no less.

Who would spend 300RMB for a PBR?? And does it come with the usual hangover? I will never spend more than 50 cents on a can PBR.

不求最好,但求最贵! (Hey you stole Leica's line!)

who know, may be it does taste better than regular PBR. I guess it's same way BMW and Mercedes are just regular cars in Germany, but luxury car everywhere else, Toyota Celsior get a premium treatment in overseas.

It's a popular marketing strategy, especially when your marketing segment is heavily saturated. Though a better approach will be buy a failing but still respected brand in Europe, then try to sell it in these market. It's would have been more credible. And it is commonly done in the wine industry.

I remember buying aluminum cans of PBR in Fuzhou back in 2004. No way to know if was legitimate or not, but it tasted as crisp and refreshing as the real thing.

I came here from the New Yorker: PBR (and Coors Light, the yin zidan) was one of the first US beers in China. I certainly had one in 1992. I'd guess that of all the import beers, they are the most Chinese with regards to marketing, staff, etc. Evan Osmos in the New Yorker seems to be under the impression that this is some kind of new thing, and unique to PBR -- but they're just following the general trend here, which is to make your beer in levels. Snow, Harbin, Yanjing, Qingdao, all have a cheap street version, a restaurant version, and a super-expensive restaurant version -- I think it comes from Qingdao selling domestic and export versions, and people at nice dinners wanting whatever 'the best' was.

That may be true, Dirk, but the PBR 1844 is priced at another level altogether. 300 RMB a bottle, retail (without the restaurant markup), outpaces the multi-level pricing trend. Even diners who are used to flaunting their wealth aren't going to be too pleased when they are charged 2,000 RMB for ordering six bottles of the "best".

300RMB? Too much.

Beer choices in China are developing, this will be the last product I would consider when travelling in China.

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