Pabst Goes Upmarket in China

Posted by Abe Sauer on July 22, 2010 12:00 PM

Ever traveled through Germany and been struck by how, wow, everyone has a Mercedes Benz, as if the Benz is the Ford Taurus of Deutschland or something? Well, that's how Chinese beer drinkers must feel when they vacation in the United States. Plain old everyone's drinking Pabst Blue Ribbon, out of cheap cans… what's that all about?

That's because Pabst has gone upmarket in China. Pabst "1844" aims to be “the first specialty beer in Mainland China.” And unlike its American relative, the Pabst brand will be a little differently positioned in China:

"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."

By comparison, 720 ml of PBR in the States will set you back about $3.50 ($2 during happy hour).

Over here this may seem like an insane proposition. Of course, all brands would love to go upscale in another place simply by going through the motions of being a luxury brand, but it isn't that simple. And it certainly helps if you already are a luxury brand before you launch a localized, upscale offshoot.

Pabst appears to understand just how to go about this transformation though. It is going after the nouveau riche, desperate for status symbols that are nothing more than symbols of extravagant spending. Ingeniously, it is also going after state banquet dinners, the place where cadres also seek status but never themselves have to foot the bill.

Moreover, Pabst's 1844 strategy does not come without a foundation in the country. Launched in 1993, the brand was the first foreign brewery to open in China since the 1949 liberation. Today, Pabst already manufactures 1.5 million barrels locally and throughout the 1990s it was China's best selling foreign beer brand.

(Image via DanWei)

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