BOFFerding: HOW TO MAke iT in CHinA how it all began

Bofferding: How to
make it in China
How it all began
Mathias Lentz,
Service Global Export representative
at Bofferding responsible for the
Chinese market
Once a small family
business, Bofferding S.A. has
developed into Luxembourg’s
number one distributor of
drinks. Currently employing
267 people, it is part
of the Bofferding National
brewery, which resulted from
the merger between two
family-owned breweries.
Created in Luxembourg in
1764, Bofferding which will
soon celebrate its 250th
anniversary, has managed to
develop its reputation well
beyond its borders.
Bofferding | P. 22
The story of Bofferding in China began
in 2007 when the tasty Luxembourgish
beer was first introduced to the Chinese
market through the famous Jade Garden
Restaurants chain, King Man Group. "They
knew us from Luxembourg and offered
our beer in their prestigious venues. Due
to this presence the demand for our beer
began to grow. We were then approached
by the Feng sisters who introduced us to
the Beijing market", explains Mathias Lentz,
Service Global Export representative at
Bofferding responsible for the Chinese
market. In order to increase its market
penetration, it became important to find a
partner to access the consumers at home.
This marked the introduction of the Luxembourg brand to the Chinese distribution
market after the Beijing Hualian Group investment Holding Co Ltd (BHG), one of the
largest Chinese retailer operating a chain of
stores, agreed to ensure it was stocked on
the shelves of supermarkets. Active in more
than 40 cities and 23 Chinese provinces,
the Asian distributor has considerably
helped the brand becoming a household
name in China. "We are now present in
more than 87 point of sales in Beijing and
Shanghai including hotels, supermarkets,
restaurants and bars", points out Lentz, who
was appointed manager of the Chinese
market in October 2012 in order to support
the growth of the family business further
to the agreement with BHG.
After being present in Luxembourg for
250 years, the group which sells over
16,200,000l annually, is an uncontested
leader in the Grand Duchy enjoying 60%
of market share. However, running a business in China is a challenge as the brand
is a relative newcomer on the Chinese
market. In order to strike successfully,
Bofferding received extensive support
from Luxembourg diplomatic institutions.
"Beside my full-base support and my
numerous local friends, I can rely on the
official diplomatic missions. The Embassy
in Beijing and particularly the Consulate in
Shanghai are always available for precious
advice", says Lentz.
"Our goal in China is to set up a company
that will become a niche competitor in
our selected markets", he adds. To do so,
Bofferding implements two distinctive
strategies in Beijing and Shanghai in order
to penetrate the Chinese market.
"In Shanghai we concentrate on on-trade
business such as Hotels, Bars and Restaurants while in Beijing, we focus more on off
– trade business such as supermarkets and
retail stores", explains Lentz.
Made in Luxembourg
The Chinese beer industry has enjoyed
impressive growth over the last past three
decades, ranking as the largest market in
the world with more than 500,000,000hl
per year, representing ¼ of the world
production. With competitors such as
Snow beer (雪花) and Qingtao beer, both
respectively ranked as the largest brand on
the globe and the most famous Chinese
beer on the international market, competition is stiff. "Obviously competition is keen
so we have to be the best. Establishing our
brand name therefore goes through testing
and tasting our beers", says Lentz. Since its
arrival in China in 2007, Bofferding sells up
to 200,000l annually and will count four
employees at the end of 2014.
To adapt to the Chinese market, Bofferding
can rely on the excellence of its products
anchored in its long-standing brewing
tradition. "Although every city and every
area of China is different, the only selling
strategy for all the regions is our absolute
quality and pureness. And that has been
our family philosophy since 1764", explains
Lentz. Present on the market for 250 years,
Bofferding’s brewery has tremendous
experience in brewing top quality beer
and that is exactly what Chinese consumers value the most. "Chinese consumers
are very sophisticated in choosing their
consumer goods. They love high and unique
quality. Local consumers also value special
beers brewed the traditional way, like slow
brewing, using only pure ingredients", adds
Lentz. In this respect, Bofferding Lager is a
prime example of the brand’s savoir-faire.
Brewed according to purity law and free
of any additives and preservatives, water
is drawn from its own natural source in
Luxembourg, more than -300 meters
below ground and is submitted to rigorous
quality controls at all times.
Bofferding’s strict controls for the highest
quality are then key drivers of success. In
fact, even though the Chinese government
tightened food-safety standards in 2008
and required all breweries to comply with
strict management codes, the market is still
too easily saturated with low-quality products that don’t meet quality standards.
In order to make a splash in Chinese
homes, Bofferding also focuses on the
participation and sponsoring of important
events such as attending the Shanghai
Formula 1 and the BMW Golf Masters
which enable the brand to meet up to
150,000 guests but also sponsoring smaller
events such as the Sinan Mansion Beer
festival and the Kerry Beerfest gathering an
average of 5,000 guests. "The events give
us a chance to get closer to our customers
and give them the opportunity to taste our
products. Overall we get very good feedback and are always happy to see that our
customers consist not only of one-timers",
points out Lentz enthusiastically.
and quality. "My family and I, we personally guarantee these important factors. This
guarantee is highly appreciated and we will
see the value of these factors becoming
more and more recognised in the future:
this will be the essence of our success." OB
A bright future
Since the Chinese market is the largest in
the world, growth is certainly foreseeable.
As regards the future of the Luxembourg
brewing industry in China, Mr. Lentz is
confident that its success will largely rely
on Luxembourg’s long-standing savoir-faire
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