By 2016, China’s beer industry had reached a critical juncture. After years of steady expansion, beer production peaked at 50 billion liters in 2013, only to face a sharp pivot as younger consumers—particularly Generation Z—began favoring premium, experiential, and craft-style beers. Simultaneously, global brewing giants like AB InBev and Heineken intensified their push into the Chinese market, elevating competitive pressure across the industry.
For China Resources Beer (CR Beer), the nation’s largest brewer by volume, these market shifts posed a serious threat. Its core brand, Snow Beer, had long relied on high-volume, low-price strategies—an approach increasingly misaligned with emerging consumer preferences. Internally, the company faced a trio of formidable challenges: inefficient operations, limited presence in the premium segment, and a costly, aging workforce. Newly appointed CEO Hou Xiaohai referred to these issues as the “Three Mountains.”
Hou emphasized the urgency of transformation, asserting that success required adapting to evolving consumer behaviors, broader industry trends, and economic realities. This vision laid the foundation for CR Beer’s “3+3+3” nine-year strategic plan, launched in 2017. Designed to address systemic inefficiencies while establishing long-term competitiveness, the plan would come to define the company’s turnaround journey.
Streamlining for Sustainability: Operational and Cultural Reset
CR Beer’s transformation began with internal restructuring. In 2017, Hou gathered 100 senior executives at the company’s CR University campus in Xiaojingwan to initiate a comprehensive overhaul. The goal was to simplify operations and foster a more agile corporate culture.
Key measures included consolidating the number of breweries from 98 to 63, reducing the workforce from over 58,000 to 25,000, and implementing a 47% wage increase to retain and motivate top talent. A sweeping digital transformation was also launched under the leadership of Guo Hua, a veteran of IBM and Accenture, focusing on modernizing supply chains, intelligent manufacturing, and digital marketing.
Cultural change was equally critical. In 2018, the company introduced the Corporate Culture Reshaping Project, involving over 26,000 employees. The initiative championed a new ethos—“Every individual matters, every bottle shines”—which was integrated into performance reviews, leadership development, and daily operations to ensure cohesive alignment across all levels of the organization.
By 2021, CR Beer had achieved a leaner and more energized operational structure, paving the way for the next phase: brand reinvention.
Targeting the Youth Market: Premiumization and Brand Revitalization
With its foundation strengthened, CR Beer shifted focus to branding and innovation. Understanding that younger consumers were drawn to brands reflecting their lifestyle and values, the company unveiled a rebranding campaign under the slogan “We made for young.”
A centerpiece of this effort was the revitalization of Yongchuang Tianya SuperX, reimagined to appeal to the youth demographic. CR Beer invested heavily in influencer marketing, music festivals, and extreme sports events such as the XGames. The results were immediate—sales of SuperX doubled, signaling successful engagement with a new generation of consumers and solidifying CR Beer’s presence in the premium segment.
Strategic Alliance with Heineken: Accelerating Market Penetration
To further strengthen its premium offerings, CR Beer pursued a strategic partnership with global brewer Heineken. Hou framed the move as a shift in approach: “Rather than exporting Chinese beer, we should first bring in top international brands, collaborate, and refine our approach.”
In 2018, CR Beer entered a long-term agreement with Heineken, gaining exclusive distribution rights for its products across mainland China, Hong Kong, and Macau. As part of the deal, Heineken acquired a 20.7% stake in CR Beer, while CR Beer took a 0.9% share in Heineken Group.
The partnership yielded immediate dividends. Heineken’s global brand cachet and CR Beer’s extensive distribution network proved a potent combination. By the end of 2023, Heineken’s sales in China had quadrupled to 600,000 tonnes, making China its second-largest global market.
To capitalize on this momentum, CR Beer introduced the “4+4” brand matrix: four domestic brands (Yongchuang Tianya SuperX, Marrs Green, Craftsmanship, and Flower Face) paired with four international labels (Heineken, Red Baron, Tiger, and Sol). This balanced portfolio allowed the company to address a wide range of consumer preferences, reinforcing its dominance in the premium beer segment.
Looking Ahead
CR Beer’s strategic transformation—from operational overhaul to cultural reinvention and premium brand expansion—has positioned it as a formidable player in a rapidly evolving market. As China’s beer landscape continues to shift, CR Beer’s adaptive strategy underscores its commitment to remaining not just relevant, but competitive, in the next era of consumer demand.
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