Old brand,new flavour
By Crystal Zou, Shanghai Star. 2001-07-12
REEB ("beer" spelt backwards) is a local brand known to Shanghai residents since the founding of the Shanghai Mila Brewery.
Mila changed its name in June to Shanghai Asia Pacific Brewery Co Ltd. It is a joint venture of Shanghai Yimin Brewery and Thai and Asian Pacific Breweries Group (APB). The latter is a joint investment of Fraser and Neave Ltd of Singapore and the Heineken Group of the Netherlands.
Some insiders worry about the survival of the brand, as under APB's management there are already two famous brands, Heineken and Tiger.
The insiders feel Reeb may be ignored if the company places the emphasis only on two international brands.
Huang Hongpeng, general manager of Shanghai APB, said such worries were unfounded. Shanghai APB, he claimed, would continue to invest in Reeb as the group's most important local brand.
This year, in order to revitalize Reeb, the company has invested 800,000 yuan ($96,386) to invite Citigate Su Yeang, a US-Singapore company, to design the packaging, advertising and corporate image."Reeb will grow with the city's development," he said.
"The acquisition is only part of APB's development strategy. Before the acquisition, APB was already the controlling shareholder. Now we have 97 per cent of the shares."
Huang emphasized that previously APB was on good terms with Yimin. Acquisition, he claimed, did not suggest any conflicts in the partnership but indicated Shanghai APB's ambition to expand.
Mila was the first Shanghai Brewery to attain ISO 9002. In 1997, Reeb was judged one of China National Food Industry's "Famous Brands."
Strong competition and the Asian economic crisis dethroned Reeb in 1998.
The Japanese brand Suntory now ranks first in Shanghai by sales volume. Reeb is second, and Tsingtao third.
Shanghai Asia Pacific Brewery has increased its capital investment to over $100 million from the original $30 million in 1989. Most of the brewing equipment in Shanghai APB is imported from Germany, the Netherlands and Italy.
The German automatic water purification equipment guarantees that the brewing water complies with European standards. The water samples are required to be sent to the Netherlands every month for 40 specification tests by the Heineken Group.
Huang said it is common practice for breweries to expand their business globally. Water purification equipment is becoming increasingly important. Since good water is fundamental to good beer, if there is no excellent water resource in the region, purification equipment is crucial to the success of the brewing process.
Apart from the $100 million investment, the company has invested another 10 million yuan ($1.2 million) in a complete set of German Heuft professional beer packaging inspection equipment.
EBI (Empty Bottle Inspection) examines the bottom and neck of the bottle and checks for damage points or blots on the body of the bottle.
Investment in this equipment ensures the consistency of Reeb's taste, and it won a Monde Gold Award in Brussels this year.
"In order to stand out from the competition, we should not only sell the taste but build Reeb's brand equity. We need to touch the hearts of changing consumers," Huang said.
With the aim of capturing more market share, the company is employing a "multiflavour" strategy.
Some say this might weaken the brand power of Reeb, but Huang believes the new Reeb with four flavours may cater to the tastes of more Shanghai people.