Lion Brewery – Doing a Roaring Trade
We learn how a Sri Lankan brewery with a historic legacy is looking to spread around the world.
The history of Lion Brewery goes back to 1849, over 170 years ago. During colonial times when Sri Lanka was ruled by the British, the brewery was started by Samuel Baker, a famous explorer, in the central hills of the country. Over the years the company has grown, become acquired by a larger conglomerate, and become the number one beer company in Sri Lanka with a clearly dominant market share. The brewery boasts one of the most state-of-the-art packaging facilities in South Asia and favourite Sri Lankan brands including their flagship brands, Lion Lager, Lion Strong and Lion Stout. Lion also maintains a partnership with Carlsberg and brews Carlsberg pilsner in Sri Lanka, under license. Today Lion Brewery is one of the most awarded breweries in Sri Lanka and maybe even Asia, with 38 international awards for beer and brewing to its name. The Company is ISO 22000-2003 certified.
For us, it’s definitely the internationally awarded quality of our brewing and also our heritage,” says Shiyan Jayaweera, Head of Marketing for Lion Brewery. “When you’ve been brewing for over 170 years you tend to know something about it. As a company and as a brand it’s woven into the fabric of Sri Lankan culture.”
Bringing Lion Beers to New Shores
While Lion Brewery has made the Sri Lankan market its own, the company has big ambitions further afield.
“We’ve been exporting since 1999 and we seriously started expanding overseas in the early 2000s. It started out as a very small business that’s grown over the years,” says Sharlene Adams, Head of Exports for the company. “We’re currently in 33 markets across the world from the US to Australia. Our strongest markets are in Africa and the Middle East and also the Maldives, where we are a market leader.”
Bringing these beloved Sri Lankan brands to the rest of the world isn’t simply a question of selling them to shops in other countries, however. Each new market Lion enters has to be approached carefully and strategically.
“We look at markets where we think our portfolio would have traction,” Adams elaborates. “We sell to craft beer drinkers in the US for instance, rather than Budweiser drinkers. Lion Stout is our lead brand in the USA; it’s been highly rated, featured in books by beer writers like Roger Protz and the late Michael Jackson ‘The Beer Hunter’, so that has given us credibility with consumers. Then if you look at Africa, we take a different approach, focusing on our Strong beer portfolio. We use our portfolio to leverage a point of difference, based on market potential.
Of course, one route to market that has proved valuable for Lion has been the growing communities of Sri Lankan ex-pats everywhere from Australia to the UK.
“They take their food habits into those countries. There is an emerging trend and interest in Sri Lankan food in some countries such as the UK and we have been able to leverage this trend to expand Lion sales,” Adams says. “Authenticity stemming from our 170-year-old heritage and a fantastic range of beers gives us credibility and exotic appeal without the big budgets of larger brands. We aim to build a niche for ourselves.”
Simply identifying a target market isn’t enough, however. You need a support structure and partners you can trust.
“The biggest challenge is building a route to market because when you’re a brand from a different country and you’re starting out in a new market your distributor partner is critical,” Adams says. “You may not always find top tier distributors. So, you start small and work on building market relevance in order to be approached by a high-profile distributor. You also need to find long term strategic partners with an outlook like your own. We want to build a brand, so we seek to list the brand and build a loyal consumer base, and it can be a challenge to find distribution partners on the same page as us on that. There are so many brands in some of these markets that finding your feet and competing and standing out is quite challenging.”
Many of the markets that Lion has been working to expand in were hit hard during the COVID-19 crisis, and while Sri Lanka hasn’t been hit as badly as some parts of the world, the pandemic has been a disruption for the business.
“From mid-March to mid-May we had a full lockdown. Our businesses were closed, the movement was restricted, especially for our country,” Jayaweera tells us. “Our outlet base was closed so we couldn’t distribute our beer in the Sri Lankan market until the middle of May. Since then restrictions have been lifted and we’ve been coming back into operation. Restaurants have been badly hit. Our tourism sector has been hit with a lot of our businesses dependant on that because it is a big sector in our country. So that has impacted our business obviously and is expected to continue for the rest of this year. We’ll look at how to, as a business, adjust to the new normal.”
Adams points out that in a situation like the COVID crisis, having entered a diverse range of markets mitigates and spreads the risk of a business downturn.
“If you look at the international markets, the US, Europe and the UK were seriously affected. In the US, most of our business is in New York. Our focus in New York has been the on-premise sector – so the closure of bars and restaurants meant we took a hit,” she says. “However the majority of our volume comes from the Middle East and Africa and the Off-trade in that region remained open throughout the COVID-19 lockdown so there wasn’t a huge drop in volume. Our African markets weren’t particularly affected and continued to perform well, faring better than last year in some markets.
Moving beyond COVID, Lion is looking to consolidate its gains and sustain its key markets, while continuing to expand its business across the world
“From a local context, our objective will be consolidation. This year, that means trying to figure out when conditions will normalise but beyond that our task is market expansion,” Jayaweera says. We’re working on new products, innovation to meet the needs of the consumer of tomorrow.
“Exports average 8-10% of our local business, but we want to see it grow to 25% of the local business over the next two years,” Adams says. Lion seeks to take a slice of Sri Lanka to the world, through partnerships for distribution and contract brewing and is actively seeking new partners in the regions of Africa, the Middle East, Europe and South America with a view to expanding our footprint across the globe. Sri Lanka received high ratings on Lonely Planet, Conde Nast Traveller and CNN Travel, among others, in the last few years; this resulted in tourists from diverse corners of the world visiting the country to enjoy its beaches, wildlife, ancient history and native traditions. It also generated greater awareness of the culinary styles of Sri Lanka, resulting in interest and mushrooming of Sri Lankan street food outlets in cities such as London, New York and other cities. As the leading beer of the country, Lion will no doubt have an authentic pairing with Sri Lankan food and, we hope that this trend will continue to give us leverage in expanding our overseas business,” says Adams.
Shiyan Jayaweera Sharlene Adams
Head of Marketing Head of Exports