March 1, 2021 • 35 mins
China is the largest market in the world for beer in terms of volume. And Belgium is a country with a long history of brewing, dating back to the 12th Century. So what better guest to have on the podcast than Sean Harmon, the China head of the premium Belgian beer company Duvel Moortgat, probably best known in China for its brand Vedett. Despite its proud status in Belgium, Duvel Moortgat started its life in China with a youthful start-up mentality, and this spirit continues to live within the DNA of its culture today. Sean talks us through this growth story, and reveals how he nowadays needs to defend his company's position in China as one of the leading brands in the increasingly competitive market for 'craft' beers. The episode also includes a catch-up interview with Simon MANETTI from Season 01 Episode 17. (https://mosaicofchina.com/season-01-episode-17-simon-manetti). Chapters 00:00 - Trailer & Intro 00:52 - Part 1 19:43 - Part 2 27:33 - Outro 29:49 - Catch-Up Interview Subscribe to the PREMIUM version, see the visuals, and/or follow the full transcript for this episode at https://mosaicofchina.com/season-02-episode-09-sean-harmon. Join the community on Instagram (https://instagram.com/oscology), LinkedIn (https://www.linkedin.com/company/mosaicofchina), Facebook (https://facebook.com/mosaicofchina) or WeChat (https://mosaicofchina.com/wechat).
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:02):
[Trailer]OF: I think of those beers being big in Belgium.
Can I say it again? Those beers being bigin Belgium.
[Intro]OF: Welcome to Mosaic of China, a podcast
about people who are making their mark inChina. I’m your host, Oscar Fuchs.
I’m going to keep today’s intro short,since the interview itself starts with a nice
(00:23):
introduction of today’s guest, Sean Harmon.I’ll be back again at the end of the episode,
with information about a discount for listeners,so you’ll want to stick around until then.
Also, just two things to mention, at somepoint in the interview we referred to The
King Albert Fund, that’s a mistake, we shouldhave said The Prince Albert Fund. And also
the definition of craft beer in the U.S. haschanged since we recorded this, it’s now
(00:48):
anything under 6 million barrels. That’sit, let’s start the show.
[Part 1]OF: Well, thank you so much for coming in,
Sean.SH: Thanks for having me, Oscar.
OF (00:58):
And what is your full title? SH
and I’m the General Manager of Duvel MoortgatChina.
Say that again, Duvel…? SH
Moortgat, right. That is what language? SH
company.OF: OK. And you specialise in what product,
for anyone who does not know?SH: Beer. Specialty beer.
(01:20):
OK. We’re having a beer episode. SH
And I should basically volunteer the information pretty quickly that I'm not a beer drinker.
SH (01:30):
I know, I know. It's sad, but we can't win them all, you know?
OF (01:34):
Well, let's start in the same way that I start every episode, which is… What is
the object that you've brought in that insome way exemplifies your life here in China?
SH (01:44):
I brought in a bottle of Vedett Extra White.
OF (01:47):
OK. SH
I did, but I couldn’t. I couldn't thinkof anything that was more representative of
my China experience. So this little bottleof Vedett Extra White is actually what took
me all over China, over the past eight years,helping to grow the Duvel Moortgat business
here. It's our best selling product for ourcompany in China. And it's been the real growth
(02:09):
engine throughout my eight year tenure. Soit's a big part of my story. And actually,
you'll see here, this bottle in particularhas your face on the back.
Dude! OK, oh my gosh. SH
Vedett, is that each bottle has a consumer’sface on the back. So you can go on to the
小程序 [xiǎochéngxù] on WeChat, andupload your photo, and get a customised six
(02:32):
pack - or 24-pack - sent to your house. So,a gift for you. Even though you won't drink
it, I'm sure you know some people who willkindly enjoy it.
I absolutely do. And it's not about the drink itself at this point, it’s about my
ego, obviously. So you might not have fedmy stomach, but you're feeding my ego.
SH (02:50):
I'm glad I could feed something. OF
drink beer. It's just, like… It's somethingwhich is always, like, in the background for
me. I would never choose it as a drink myself.But when I have it, I do enjoy it. And I have
had your beer, so please don't castigate me,I have drunk your beer.
No problem, no problem. The market is big enough here, there are enough consumers
(03:11):
for us to target, we’ll let one slide.OF: OK, good. And have you always been a beer
drinker?SH: I have always been a beer drinker. So
when I tell my friends… or my friends firstfound out that I was going to work for a beer
company, they all found it quite interestingbecause I'm a beer guy, and they know it very
well. So…OF: It was destined to be.
It was destined to be. OF
(03:33):
Well, China is the largest beer market in the world in terms of volume.
OF (03:36):
Oh really? SH
in four beers in the world are consumed inChina. In terms of profit, it's actually only
number three, because the price, here, ofbeer is quite cheap. I mean, the number one
brand here is Snow.OF Oh right.
SH (03:52):
But you're buying a Snow at, what, 3-4 RMB a bottle, so…
OF (03:55):
And that's from, I would guess, a pretty low start, because historically China wouldn't
have been a beer drinking country, right?SH: Historically, it's a spirits country.
It's a 白酒 [báijiǔ] country.OF: Yeah.
SH (04:07):
But they do like their beer. The market actually is declining slightly every year,
as are beer markets all over the world. Butwhat is a nice trend, especially for us is
that, super premium beers - or ‘specialtybeers’, as we like to call them - are growing
very nicely. So the macro trend doesn't reallyaffect our niche sector so much.
OF (04:27):
Oh, interesting. So had I been interviewing somebody from a more mass-market brand like
- I’m guessing, what? - a Heineken, a Budweiser…What are these brands we're talking about?
SH (04:35):
So the biggest brand in China is China Resources, the company that owns Snow. I think
their global headquarters is in Hong Kong.But they have offices all over the place.
I'm not sure where their CEO of China sits,to be honest with you. They're big. ABI, of
course - AB InBev - is a major beer player,they own roughly a third of the beer consumed
(04:56):
in the world.OF: Oh right.
And then Carlsberg as well, is a big player. Heineken actually joined China Resources in
China. Those are the big three that we…Well, the big two we look at in our company
really is AB InBev and Carlsberg. But they'reso much bigger than we are, it's totally different
scales.OF: Right. Yes, because there's been so much
consolidation, and not just in beer, but alsowine and spirits, and the whole alcohol market.
(05:20):
But you as a company, you have remained prettysmall, right?
I mean, relatively. Duvel Moortgat is a family-owned company. So, established in
1871. The CEO today - named Michel Moortgat- is the fourth generation of the family.
So the company now is around 500 million Eurosin gross turnover. And that's doubled in the
(05:40):
last five years, which is incredibly impressive.OF: Oh wow.
The brands we sell in China are Duvel, Vedett, Achouffe, Firestone Walker, Maredsous
and Liefmans. Those are our focus brands here.OF: He's doing his job well, he's got that
all off the top of his head. I believe it'syou, you are the GM. You said it's a Belgian
(06:01):
beer, like… that has a connotation, right?Because Belgium, the beer culture there is
pretty famous. It's a tiny country, but ithas a lot of beer brands.
Have you been to Belgium? OF
I mean, that's actually quite sad that you've been to Belgium, but you are not a
beer guy.OF: I'm a waffle guy, does that count?
OK there you go. I mean, there's enough great waffles and chocolate as well. No, I
mean, it's an incredible country with a veryrich beer history. A lot of breweries that
(06:26):
have been around for hundreds of years. Andthe people really do respect the craft, which
is something that I really appreciate aboutworking for a Belgian company. Craft Beer
now - especially in the U.S. - is a huge trend.But Belgian beer, it's actually the original
craft. Before ‘craft beer’ was a thing,Belgian beer was there doing it first and
(06:47):
foremost.OF: Well what does it even mean then? What
does ‘craft beer’ mean?SH: That's a complicated question. In China
especially, I mean, the translation for ‘craft’,all sorts of companies are claiming now. So
you have wheat beers that are considered ‘craft’,you have obviously IPAs… Anything that's
non-lager in China is often called ‘craftbeer’. Globally speaking, I think it's something
(07:10):
that is really focused on the quality of theproduct. Quality is the most important thing,
and they're selling not the traditional standardproduct, which makes up the vast majority
of the market. So, lager beer - filtered lager- is 90+ percent of the market, and we are
(07:30):
doing the the other stuff, the specialty stuffthat's a little bit different.
OF (07:35):
So it's not actually about the scale, because in my mind, ‘craft beer’
think of the microbrewery and, you know “Here'smy little brand, which I've come up with…”
It's not about that.SH: Well in the U.S. they have defined it,
and that's a brewery doing less than 2 millionbarrels, until you can be considered one of
the craft brands. But that term doesn't necessarilytranslate globally. So in Belgium, that's
(07:59):
obviously not the case. That's why I preferto use the term ‘specialty beer’, because
I think it's more encompassing of what whatreally matters. And that's the fact that the
product is really special. And in China, ofcourse, it's it's all very, very new. So it's
a very complex question, that seems very simple.OF: What is the story of the company in China?
SH (08:20):
It was started in 2006, technically. The first container arrived in 2007, which at
that time for Belgian beer was extremely early,perhaps too early. It took a long time to
build the volumes up. But that, for sure,gave us a very distinct first-mover advantage.
And it was my boss - till today, and my firstboss - named Vincent Smets, he came over actually,
(08:43):
on a government grant called, it’s calledThe Prince Albert Fund. And his goal was to
do a market study of one year on the potentialof the specialty beer industry in China. He
completed that study, he said “You guysshould definitely open an office, and you
should hire me to do it". And…OF: That’s a small conclusion.
It was a smart conclusion. And he did an excellent job. I mean, he… from the very
early years, he was a one-man kind of Spartanoperation. And then slowly but surely, we
(09:09):
grew. I joined in 2012. That was here in Shanghai.And what was interesting about us, we did
our own distribution, which - for many brandowners - is a very rare approach. But at the
time, I think we were so early that the distributorsdidn't want our beer. So our beers were too
expensive, they were too strong, they tastedfunny… You know, people didn't get it. So
(09:32):
it took time for that to kind of catch on,and the market to change. So we decided to
basically create our own distribution network.We were delivering the beer to the bars, we
were doing the sales, we were collecting themoney. It was a very, very labour-intensive
time in the company's history.OF: I mean, it sounds like a startup. And
that's what it was.SH: It was very much so a startup. And it
(09:53):
was a startup culture as well. So when wewould open a new office, for example, we would
hire someone, and this person would do allfacets of the business. On their own, they
would get on a three-wheeled bike, and drivethe five cases of beer to the bar, and deliver
it themselves. Even go install the draughtmachine, clean the beer lines. So that was
(10:14):
the early years. And still today you'll havea bar owner come up to you and say “I remember
back in 2010, when you had a 老外 [lǎowài]here delivering the cases to my door.” And
we got, definitely, a name in the specialtymarket for being so hands-on, so on-the-ground.
OF (10:27):
Yeah. And totally visible, I guess, as well. Especially since, like, it was a foreigner,
in one of these more provincial cities…SH: Right.
…Riding one of those scooters full of beer?
SH (10:36):
Yeah, exactly. OF
how you started in the company?SH: I started a little bit after the most
laborious days.OF: Right.
But yes, I was very much doing a lot of labour aspects of the business. I packed glasses
and coasters into boxes when a distributorwould order. And yeah, it was fun. It was
very fun to look back on. And there's a lotof good times.
OF (10:56):
But that's exactly what I sense when you're talking about it. You know, I can see the
smile on your face, I can see your eyes lightup. You know, that part of the business - when
you're really growing it - the expectationsaren't there either. Like, it's almost experimental,
you can just play, right?SH: That's exactly right. And you wouldn't
think that a global player would start a marketlike that. They were hands-off. They said
(11:18):
"You guys go grow the business. If you needsomething, reach out and we'll try to support
you in any way we can”. And I think that'swhat made it work. So we started, really,
in seven core markets.OF: That seems quite a lot, actually. I think
for you to regionalise so quickly, probablyis not what everyone would have thought that
you should do.SH: Definitely not. That's actually the key
to, I think, the success in the end. It wasthat we were on the ground in seven core markets.
(11:42):
And we were well positioned. So when the marketdid turn - and the big guys started investing
a lot into their specialty beers, and thetrends changed - we were there. And we had
boots on the ground, and we had a marketingplan. That's really what, I think, propelled
us in the last eight years or so.OF: Interesting. And because you were so frugal,
(12:04):
with that mindset, I guess your overheadswere kept low. So you were almost, like, latently
waiting. And then you could start pumpingin more investment later on.
SH (12:11):
Exactly, yeah. But that was a challenge as well, I would say, to switch from that
mentality of being very frugal to trying toget our team to invest in what they had. So
we had a lot of hoarders of our promotionalitems, for example.
OF (12:24):
Oh, what do you mean? SH
sign, a glass, a coaster… But some of thatstuff is pretty expensive. So in the early
days, we were extremely selective. You know,only the best accounts get a neon. And now
we have KPIs for our sales teams that theyneed to go out and give out X neons in the
quarter.OF: Right.
SH (12:44):
So changing that mentality of our team took some time.
OF (12:49):
That's interesting. Can you think of any other examples from those times? Like, you
know, when you would travel around, that costwould add up. But am I right in thinking of
you taking, like, overnight trains? How elsewould you save money?
SH (13:01):
Overnight, not so much. But we definitely had a very minimal travel expense policy.
We always shared rooms, we still do today.We stayed in the cheapest of cheap hotels.
So 七天 [Qītiān] - I don't know if you'veheard of 7 Days Inn, or…? I was a 7 Days
Inn member, 七天会员 [Qītiān huìyuán],there you go. Stayed in a lot of 七天 [Qītiān]s.
I mean it's funny actually you mentioned that,because when we would go to these markets,
(13:23):
we were also trying to kind of ‘fake ituntil you make it’.
OF (13:26):
Yeah. SH
basically take a train to a city where I sawthat we didn't really have much sales. And
I would go around and try to find the barselling any specialty beer, whether it's Hoegaarden
or Corona, anything that's not Tsingtao orSnow. And I would try to find the guy that
sold that beer to them, and try to have ameeting with that guy.
(13:46):
Oh I see, so almost like reverse-engineer what he saw other beers doing.
SH (13:50):
Yeah, exactly. OF
Because we didn't have the contacts. This is after we, kind of, shifted from only our
own distribution, to saying “OK, now wewant to expand distribution”.
OF (13:59):
Right. SH
want this big distribution company to thinkwe were some tiny startup. So I remember in
this one particular city, I would stay inthe 七天 [Qītiān], which was next to the
Shangri-La.OF: Yes.
SH (14:11):
And when the distributor would come pick me up for dinner, I would say just pick me
up at the Shangri-La, I'd walk across thestreet, and wait in the lobby of the Shangri-La.
And then he dropped me off back there at theend of the evening.
OF (14:21):
I love it. SH
Yeah. I mean, this is entrepreneurism. I mean, when I was starting my company, I
used to have this lovely suit, and I usedto meet at these great hotels just like you
did, and then I would, like, around the cornerbe eating, like, a rice snack in the gutter.
SH (14:37):
Exactly. I don't know if I could do it again. But it was… It was a trip, it was
a ride.OF: Yeah. Well, you've said then, there’s
been a challenge now to move away from thatmindset. And now, you do have more budget.
I guess the stress now is that, OK, you’veproven yourself, you've got to a level where
you've got this much growth, what's the nextstage? And you know, what's the next pressure
(14:58):
point? Is that the period of growth that you'rein right now?
Absolutely. I mean, the big lager players are investing heavily into the specialty sector.
So we must stand our ground, we have to defendour market share, grow our market share. So
the the strategy now is invest. Spend. Andspend wisely. We don't just spend to spend,
we try to spend as clever as we can.OF: But in a way, it's a different skillset
(15:21):
for you as a GM.SH: I would say it kind of comes naturally
somehow. I mean, that's what you do when you'regrowing is, you just rise to the challenge.
There are problems every day, and you justhave to try to attack it, you know, whatever
it may be. So marketing is a great example,because digital is extremely complex. It's
kind of a double-edged sword, because it'sthe best bang for your buck, in terms of generating
(15:43):
brand awareness. But there's also a lack oftransparency. I mean, there's these influencers
- KOLs - there’s a lot of fake data.OF: Oh, really?
Yeah. Yes. So you have to be aware of what's happening. It took some trial and error,
for sure. But we learn fast.OF: Let's just define this KOL term, it means…
(16:04):
‘Key Opinion Leader’, so it's an influencer basically.
OF (16:07):
Right. So in China, this is what you need to use to promote your brand? You need to
find the right opinion leader, right?SH: Well I mean, there's lots of different
ways to invest in marketing, but one of thebest channels for sure is through KOLs. It's
just, how to do that in a way that you'restill efficient. And you're not pumping money
(16:27):
into something which actually has a followingof 5 million bots instead of real consumers.
I see, yeah. SH
But we've learned a lot over the years indoing digital marketing, and now it’s…
Now I would say that we have a lot of KOLswe work with regularly, who we vetted, and
we know them, they represent our brand. They'rebasically our brand representatives now, even
(16:49):
though they're obviously third party influencers.But it's very impactful, and the reach is
incredible.OF: And this is - I mean, I'm guessing - the
thing that keeps you most up at night. Itis the marketing piece. How do you spend that
money? How do you even justify it? And howcan you track, what you're spending has what
effect, right?SH: I mean, definitely, that's where our biggest
budgets are. I think also, innovation is abig one. Because I don't drink what my dad
(17:14):
drank, you know.OF: Right.
SH (17:15):
And my dad doesn't drink what his dad drinks. So the market will change over time.
And we're very aware of that.OF: Yeah, you say innovation, it makes me
ask, are there any types of beers or flavoursthat you find here in China that you perhaps
wouldn't find elsewhere?SH: In terms of specialty beer, the biggest,
by far, is wheat beer. But now, in the lastfew years, we've seen a lot of fruit beer
(17:37):
as well. So in addition to Vedette Extra White,we've launched Vedette Extra Rosé, which
is white brewed with raspberries. So I meanthat is a huge trend right now, is to sweeter
fruity wheat beers and other fruit beers.OF: Which strikes me as being a Belgian thing,
like, I think of those beers being big inBelgium. Can I say it again? Those beers being
(18:01):
big in Belgium.SH: Yeah, I mean, there's definitely a history
of fruit beer in Belgium. So they had thefirst advantage, the Belgian fruit beers.
But you also have a lot of craft brewers herethat are brewing some excellent IPAs and other
unique styles as well. So it's coming. It'sjust, it's a process. For today wheat is,
(18:23):
for sure, the most powerful sector.OF: And who is your consumer? Like, do you
have a particular demographic that you aremarketing towards? Or who just happened to
be the ones who like your beer?SH: Generally, it's younger people. I mean,
it's early 20s to late 30s. Our female demographicis actually quite strong as well. But yeah,
(18:44):
it's young people who are, kind of, lookingfor something better. It's affordable luxury.
OF (18:49):
Right. Right, this is it, because it's a premium beer, but it's not such a huge leap
to go from a bog-standard beer to your beer,right?
SH (18:57):
Right. In a shop, you're buying it at 16-25 块 [kuài]. I mean, it's not gonna
break the bank. But you can appreciate someof the best beer in the world, for that affordable
price.OF: Nice. And, you know, you have gone through
so many changes. What do you see as the future?SH: Yeah, it's a good question. I mean, I
(19:17):
think that it's so hard to leave China. Thegrowth, the energy. I love the city, I love
the people. Yeah, so we'll see. I mean, fornow, it's a growth story.
OF (19:27):
Yeah. And why not continue riding that wave while it lasts, right? Riding a wave
of beer.SH: Exactly.
That would be a dream to some people, less so for others. Thank you so much, Sean.
Now let's move on to Part 2.SH: All right, let's do it.
[Part 2]SH: 10 questions, let’s do it.
Are you ready? SH
(19:48):
Am I ready? Question 1, what is your favourite China-related fact?
SH (19:53):
My favourite China related fact… There's so many, the easiest thing is to do with the
scale of the country. This is maybe less truetoday after COVID. But a few years ago, China's
economy was growing at the pace of one Australianeconomy every year.
OF (20:10):
Oh wow, yeah. It's always interesting when you make that like-for-like comparison,
you know.SH: Yeah.
Because your mind can't really understand the scale.
SH (20:16):
Yeah. “What does GDP growth mean?” OF
“It means one new Australia!” OF
this is, like, five football fields’ worth.”SH: Yeah, you can conceptualise it a little
bit. Yeah, exactly.OF: Australia-size…. Question 2, do you
have a favourite word or phrase in Chinese?SH: Let’s think. I think the one I really
like is, it's a phrase (20:35):
车到山前必有路 [Chē dào shān qián bì yǒu lù]. Before
the car reaches the mountain, there must bea road. Which I think is really relevant here,
because things are often not that easy, butif you do keep pushing and you keep going
for it, usually you will find a way. It reallyspoke to me when I first heard it. And it's
(20:55):
simple Chinese. I mean, it's not complicated.It's not like one of these four-character
成语 [chéngyǔ]s which you have to reallyknow the story behind it. It's very direct,
and it speaks to me, so I love that one.OF: Yeah. And is it fatalism, where the road
will suddenly appear? Or is it that you haveto make the road?
SH (21:12):
To me it says “just keep going”. If you just keep driving, you keep going, the
road we'll go through.OF: I like it, thanks so much. Never heard
it, I'm going to use it.SH: Please do.
OF (21:23):
What’s your favourite destination within China?
SH (21:25):
It's such a big country, so… OF
I've travelled a lot in China. I've been to most of the provincial capitals at this
point. There's definitely more beautiful placesin China than 莫干山 [Mògànshān], but
to me it's kind of a sentimental place. Imean, we've had a lot of our annual company
meetings there with our management team. Wecook together, we run together through the
(21:49):
mountains, we do walks, and we create thenew strategy for the new year. I also go there
with my friends, on weekends to get out ofthe city. To me, it has a very special place
in my heart. I mean, now it's getting so builtup, which is a bit of a shame.
OF (22:02):
Yes, yes. People like you keep talking about it, man.
SH (22:03):
I know, I know. And now I'm sitting here saying it on podcast, which isn't helping
my case I guess. Whatever.OF: If you left China, what would you miss
the most? And what would you miss the least?SH: What I would miss the most is the energy.
I think I mentioned that in our chat. It'sjust so powerful here. If you push, and you
have a great product and a great plan, andyou put it to action, things can happen. And
(22:27):
people work hard. And it's fun, it’s addicting,that sort of energy where you feel like anything's
possible. Then the other side of that questionis, it's got to be the pollution. And it's
not only the air pollution. For me, it's alsothe noise pollution.
OF (22:44):
Oh right. SH
to call that ‘the birds of Shanghai’,because you don't hear birds that often but
you do hear that power drill frequently.OF: But those two things that you've said…
you don't get this energy, this growth, thismovement, without the sound of a growing city,
right?SH: Exactly, and that’s why I'm still here.
It evens itself out, you know, it's all worthit.
(23:04):
Is there anything that still surprises you about life in China?
SH (23:07):
I mean, every day, yes, absolutely. That's also one of the things I like so much about
living here. But recently, top of mind isfor sure eCommerce. The power in reach of
a channel that's so new. And how quickly everyone,it seems, has adapted to it. Regardless of
age, I mean, everyone is buying online, itfeels like.
OF (23:28):
OK, next question. What is your favourite place to go out, to eat or drink or just hang
out?SH: So I'm a 静安 [Jìng'ān] guy. I've
lived in 静安 [Jìng'ān] most of my timein Shanghai, it’s a district downtown. And
our office is right at the crossroads of 武定[Wǔdìng] and 胶州 [Jiāozhōu] which you
know. We were very lucky to choose that location.We moved in there in 2011, at that time, there
(23:50):
was no bars on that street. And fortunatelyfor us, they kind of built the road around
us somehow. Being a beer company, we havea lot of clients on that street. So we'll
pop down to Malabar and have a beer there.OF: Malabar.
SH (24:03):
But there are a lot of places I could mention to go have a good beer. I also love
The Rooster, I love Café des Stagiaires and…But it's countless, I mean, being connected
to the F&B industry.OF: Yeah. Well, I like Malabar, because that
has a nice interesting link to Angie Wu fromSeason 01, who said the same bar.
Oh really? OF
OK. OF
(24:24):
OK yeah, it’s a great place. OF
made in China?SH: The best purchase… I’ve listened to
some of your podcasts. And I was really tryingto think of something different. But there's
no better answer than the scooter. I mean,the scooter is…
OF (24:38):
Oh right SH
since I first arrived, and it's one of myfavourite things to do, just to ride around
the city on my scoot. My fiancée also hasa scooter, and we love to cruise. It’s amazing,
especially when the weather's nice.OF: What a beautiful, romantic image you’re
giving me. Actually, I'm not even on Mobikesnow, I just walk everywhere.
SH (25:00):
Wow. Yeah. OF
OK, he's getting his phone out. Let me justcheck mine.
I don't know why I love this sticker, but if you talk to my colleagues, they will
say that I certainly overuse this sticker.It's Denzel Washington in Training Day, and
he just says “Boom”. I don't know why,it just makes me laugh. And when you get good
news at work, or something happens, whereyou know, you land an account and… Yeah,
(25:24):
to celebrate a bit, just give an old Denzel“boom”.
OF (25:26):
OK, I'm gonna use this one. That's a great one.
SH (25:29):
It's also a great movie, if you haven't seen it.
OF (25:30):
I haven't seen it. SH
It’s an action movie, is it? SH
OK. SH
What is your go-to song to sing at KTV? SH
But I'm not great at KTV, I'm not the starof the room by any means. If I have to sing
(25:54):
- and I will sing - I do like the… I usedto very much like the… Red Hot Chili Peppers,
and the range of the lead singer Anthony Kiedis,he doesn’t get too high or too low.
Ah right. SH
embarrassing yourself. Maybe ‘By the Way’,if I have to choose one.
And finally, what other China-related media or sources of information do you rely
(26:18):
on?SH: I was actually just this morning listening
to the new Sinica Business Brief.OF: Right.
SH (26:23):
I think it's a weekly podcast. It's like 20 minutes, and it just updates you on, kind
of, all that's happening in the world of Chinabusiness. I also read Axios on China.
OF (26:35):
Right. SH
great.OF: Interesting.
SH (26:40):
So that's two great sources of China news for sure.
OF (26:43):
Yeah. Well, thank you so much, Sean. I mean, as I said at the beginning as well,
like, I'm not a beer drinker…SH: Let's have one beer together, and then
maybe you can reassess.OF: Done.
SH (26:51):
OK. OF
you one final question. Who, out of everyoneyou know in China, would you recommend that
I interview for the next season of Mosaicof China?
So many options. But I think a really cool story is the story of Peddlers Gin Company.
OF (27:08):
Right. SH
Fergus. And they're creating something I thinkis really impressive. It's a great quality
product. Still the alcohol industry, but different.It'd be a cool story, I think, for everyone
to learn.OF: That's great. Well maybe, that is the
equivalent story in the world of gin as youare in the world of beer.
SH (27:27):
Yeah, it's a startup story, for sure. OF
Thank you, Oscar. It's been a pleasure.
[Outro]OF: So first things first, where’s the discount
I mentioned? For this one you’ll need tobe in one of the WeChat groups for the show.
I’ve posted a special QR code there, whichyou can scan to open the miniprogram. And
(27:47):
from there you can then upload a photo toprint on a 6-pack of any Vedett beers, and
you’ll get a 30 RMB discount voucher ontop. Cheers!
Also in the WeChat groups, and on the mosaicofchina.comwebsite, you’ll find the images alongside
today’s episode, including photos of theDuvel Moortgat team in Moganshan and elsewhere;
(28:10):
one of Sean’s boss and predecessor Vincentinstalling a neon; and one of Sean and his
fiancée out and about on their scooters inShanghai. Incidentally, there were four people
from Season 01 who chose their scooters astheir best purchase in China, and one of them
was Jorge Luzio, the China head of Marketingfor the Sprite band at Coca-Cola from Episode
(28:31):
05. Sean touched on the topic of digital marketingin today's conversation, but if you want to
hear more, please listen to that episode withJorge. There’s also a secret digital marketing
connection between Sean and Stéphane Wilmetfrom L’Oréal, who featured in Episode 01
of Season 02, the secret being that you canonly hear that part of Stéphane’s chat
(28:53):
if you’re a Patreon subscriber. Here area few clips from today’s extended interview
over on Patreon with Sean…
[Clip 1]SH: We ended up staying in Hong Kong for five
weeks with, I think, three cancelled flights.OF: Oh right.
[Clip 2]SH: We’ve worked with him this year, and
the scale is unbelievable. 30 million peoplewatching.
[Clip 3]SH: We’ve worked with a lot of different
(29:14):
live stream sellers. And what we've realisedis, it's the big ones that actually do the
trick.[Clip 4]
We’re a young group. I think our average age is around 32. And that's my age as well.
So yeah.OF: Really?
Yeah. [End of Audio Clips]
And that’s all for today. Mosaic of Chinais me, Oscar Fuchs, with artwork by Denny
Newell. Stick around for the catch-up chatwith Simon Manetti from Season 01 Episode
(29:36):
17, and we’ll be back again this time nextweek.
[Catch-Up Interview]OF: Hello, Simon.
Simon Manetti (29:47):
Hi. OF
the hell are you?SM: I'm tired. I've been off coffee now for
maybe 12 days. And it's hard. And I've beenoff booze since - just checking my watch - for
(30:08):
eight days. And that's less hard. But nowit's the weekend. So it's a true test.
OF (30:11):
Oh, that's right. So this is a January thing for you, is it?
SM (30:16):
Yes. OF
Thanks. It is Friday afternoon. First week back at work. Negative 4 degrees. So
it's a tough time.OF: It is. Well, let's start there, then.
So you said that it is the end of a long weekof work. And that's one of the changes that
I know has happened since our last chat.SM: Was it not mentioned at all last time?
(30:38):
No, maybe not. So I'm now Managing Directorof Ritter Sport China, the wonderful German
chocolate company, that is very well representedin many expat stores in China. So it massively
over-indexes amongst the expat community,but we need to grow among the true heart of
(30:59):
China. Things like localising the brand, gettingthe portfolio right. And this Ritter Sport
family cares very deeply about their impacton the world through the company. The company
they see as something that was gifted to themthrough inheritance, and it is their opportunity
to do good in the world. So chocolate is actuallyjust a vehicle to do good in the world. And
(31:22):
every company you join will tell you “You'vejust joined a family”, and they will say
they care about you, and that they have apurpose and a vision. But having been on the
agency side, I've advised so many of thosecompanies on how to structure their vision
and their mission, and it’s all so synthetic.Whereas you come to a company like Ritter
Sport, and you see it. There is an authenticvalue system driving this company. So that
(31:45):
has been an extremely motivating and rewardingexperience. So I’m - though I look exhausted
- I'm in a very, very happy place.OF: Nice. But I don't want to go into the
chocolate industry. What I want to latch onto is the word ‘family’, because that's
another big change that we've had since ourrecording. What happened?
(32:05):
So I have a baby boy, Louie Edward Manetti. Quite a mix of culture there. And I have a
wife that is five months pregnant.OF: Dude.
Yeah. OF
Yes, yes. OF
your life gets even more into a turmoil. Sowhat were you doing in the last year over
(32:29):
COVID?SM: So, I was off to New Zealand for a wedding
over the Chinese New Year period. And thensay, by Feb 6 or so, flights were cancelled,
and we had to make a new plan. So ended upwith all of our summer gear, flying directly
(32:50):
into the depths of winter - I should say,the tail-end of winter - in Europe. And I
spent the next nine months in my mother-in-law’spolo shirts. Because my mother-in-law is the
sweetest woman alive. I feel bad about sayingit, but honestly, we had the most incredible
(33:11):
2020.OF: Right.
We were so lucky because we were staying in Talloires, which is near Annecy. You're
surrounded by beautiful nature. It's France,so food and wine is spectacular. We were really
really lucky.OF: I'm just going back to our original episode,
and I'm thinking about what you said aboutwhat you would miss the most and missed the
(33:32):
least, if you left China. And you did leaveChina. So I wanted just to check on you and
to see, was that true? So what you said thatyou'd miss was the optimism of China. Because
whenever you go to Europe, it’s all grumpyand negative. And then what you said that
you'd missed the least is when the internetdoesn't work properly.
Hmm, interesting. So optimism, definitely true. But when you move into the house of
(33:58):
another, what I really missed was being ableto be selfish, and…
OF (34:02):
Impolite, basically. SM
And that would, kind of, build up. And inthe end, I didn't get to see so many people,
because we were in lockdown. So I only sawthose immediately around me. So yeah, I can't
say that I tested that one. In terms of internet,I actually had a lot of problem getting stable
(34:24):
internet in France as well. So both of thosehave been dispelled, really.
Interesting. SM
On that note, let me say thank you again for coming in. It's great to see you, to have
a catch up. The person who recommended forSeason 2 actually couldn't be part of the
season, but I found a good replacement. SoI will be posting this conversation at the
(34:48):
end of that episode. But I'm very happy thatthere is an excuse for us to be in the same
room again, and I hope we have another excuseto do it again in the future.
SM (34:57):
Me too. OF
[Trailer]OF: I think of those beers being big in Belgium.
Can I say it again? Those beers being bigin Belgium.
[Intro]OF: Welcome to Mosaic of China, a podcast
about people who are making their mark inChina. I’m your host, Oscar Fuchs.
I’m going to keep today’s intro short,since the interview itself starts with a nice
(00:23):
introduction of today’s guest, Sean Harmon.I’ll be back again at the end of the episode,
with information about a discount for listeners,so you’ll want to stick around until then.
Also, just two things to mention, at somepoint in the interview we referred to The
King Albert Fund, that’s a mistake, we shouldhave said The Prince Albert Fund. And also
the definition of craft beer in the U.S. haschanged since we recorded this, it’s now
(00:48):
anything under 6 million barrels. That’sit, let’s start the show.
[Part 1]OF: Well, thank you so much for coming in,
Sean.SH: Thanks for having me, Oscar.
OF (00:58):
And what is your full title? SH
and I’m the General Manager of Duvel MoortgatChina.
Say that again, Duvel…? SH
Moortgat, right. That is what language? SH
company.OF: OK. And you specialise in what product,
for anyone who does not know?SH: Beer. Specialty beer.
(01:20):
OK. We’re having a beer episode. SH
And I should basically volunteer the information pretty quickly that I'm not a beer drinker.
SH (01:30):
I know, I know. It's sad, but we can't win them all, you know?
OF (01:34):
Well, let's start in the same way that I start every episode, which is… What is
the object that you've brought in that insome way exemplifies your life here in China?
SH (01:44):
I brought in a bottle of Vedett Extra White.
OF (01:47):
OK. SH
I did, but I couldn’t. I couldn't thinkof anything that was more representative of
my China experience. So this little bottleof Vedett Extra White is actually what took
me all over China, over the past eight years,helping to grow the Duvel Moortgat business
here. It's our best selling product for ourcompany in China. And it's been the real growth
(02:09):
engine throughout my eight year tenure. Soit's a big part of my story. And actually,
you'll see here, this bottle in particularhas your face on the back.
Dude! OK, oh my gosh. SH
Vedett, is that each bottle has a consumer’sface on the back. So you can go on to the
小程序 [xiǎochéngxù] on WeChat, andupload your photo, and get a customised six
(02:32):
pack - or 24-pack - sent to your house. So,a gift for you. Even though you won't drink
it, I'm sure you know some people who willkindly enjoy it.
I absolutely do. And it's not about the drink itself at this point, it’s about my
ego, obviously. So you might not have fedmy stomach, but you're feeding my ego.
SH (02:50):
I'm glad I could feed something. OF
drink beer. It's just, like… It's somethingwhich is always, like, in the background for
me. I would never choose it as a drink myself.But when I have it, I do enjoy it. And I have
had your beer, so please don't castigate me,I have drunk your beer.
No problem, no problem. The market is big enough here, there are enough consumers
(03:11):
for us to target, we’ll let one slide.OF: OK, good. And have you always been a beer
drinker?SH: I have always been a beer drinker. So
when I tell my friends… or my friends firstfound out that I was going to work for a beer
company, they all found it quite interestingbecause I'm a beer guy, and they know it very
well. So…OF: It was destined to be.
It was destined to be. OF
(03:33):
Well, China is the largest beer market in the world in terms of volume.
OF (03:36):
Oh really? SH
in four beers in the world are consumed inChina. In terms of profit, it's actually only
number three, because the price, here, ofbeer is quite cheap. I mean, the number one
brand here is Snow.OF Oh right.
SH (03:52):
But you're buying a Snow at, what, 3-4 RMB a bottle, so…
OF (03:55):
And that's from, I would guess, a pretty low start, because historically China wouldn't
have been a beer drinking country, right?SH: Historically, it's a spirits country.
It's a 白酒 [báijiǔ] country.OF: Yeah.
SH (04:07):
But they do like their beer. The market actually is declining slightly every year,
as are beer markets all over the world. Butwhat is a nice trend, especially for us is
that, super premium beers - or ‘specialtybeers’, as we like to call them - are growing
very nicely. So the macro trend doesn't reallyaffect our niche sector so much.
OF (04:27):
Oh, interesting. So had I been interviewing somebody from a more mass-market brand like
- I’m guessing, what? - a Heineken, a Budweiser…What are these brands we're talking about?
SH (04:35):
So the biggest brand in China is China Resources, the company that owns Snow. I think
their global headquarters is in Hong Kong.But they have offices all over the place.
I'm not sure where their CEO of China sits,to be honest with you. They're big. ABI, of
course - AB InBev - is a major beer player,they own roughly a third of the beer consumed
(04:56):
in the world.OF: Oh right.
And then Carlsberg as well, is a big player. Heineken actually joined China Resources in
China. Those are the big three that we…Well, the big two we look at in our company
really is AB InBev and Carlsberg. But they'reso much bigger than we are, it's totally different
scales.OF: Right. Yes, because there's been so much
consolidation, and not just in beer, but alsowine and spirits, and the whole alcohol market.
(05:20):
But you as a company, you have remained prettysmall, right?
I mean, relatively. Duvel Moortgat is a family-owned company. So, established in
1871. The CEO today - named Michel Moortgat- is the fourth generation of the family.
So the company now is around 500 million Eurosin gross turnover. And that's doubled in the
(05:40):
last five years, which is incredibly impressive.OF: Oh wow.
The brands we sell in China are Duvel, Vedett, Achouffe, Firestone Walker, Maredsous
and Liefmans. Those are our focus brands here.OF: He's doing his job well, he's got that
all off the top of his head. I believe it'syou, you are the GM. You said it's a Belgian
(06:01):
beer, like… that has a connotation, right?Because Belgium, the beer culture there is
pretty famous. It's a tiny country, but ithas a lot of beer brands.
Have you been to Belgium? OF
I mean, that's actually quite sad that you've been to Belgium, but you are not a
beer guy.OF: I'm a waffle guy, does that count?
OK there you go. I mean, there's enough great waffles and chocolate as well. No, I
mean, it's an incredible country with a veryrich beer history. A lot of breweries that
(06:26):
have been around for hundreds of years. Andthe people really do respect the craft, which
is something that I really appreciate aboutworking for a Belgian company. Craft Beer
now - especially in the U.S. - is a huge trend.But Belgian beer, it's actually the original
craft. Before ‘craft beer’ was a thing,Belgian beer was there doing it first and
(06:47):
foremost.OF: Well what does it even mean then? What
does ‘craft beer’ mean?SH: That's a complicated question. In China
especially, I mean, the translation for ‘craft’,all sorts of companies are claiming now. So
you have wheat beers that are considered ‘craft’,you have obviously IPAs… Anything that's
non-lager in China is often called ‘craftbeer’. Globally speaking, I think it's something
(07:10):
that is really focused on the quality of theproduct. Quality is the most important thing,
and they're selling not the traditional standardproduct, which makes up the vast majority
of the market. So, lager beer - filtered lager- is 90+ percent of the market, and we are
(07:30):
doing the the other stuff, the specialty stuffthat's a little bit different.
OF (07:35):
So it's not actually about the scale, because in my mind, ‘craft beer’
think of the microbrewery and, you know “Here'smy little brand, which I've come up with…”
It's not about that.SH: Well in the U.S. they have defined it,
and that's a brewery doing less than 2 millionbarrels, until you can be considered one of
the craft brands. But that term doesn't necessarilytranslate globally. So in Belgium, that's
(07:59):
obviously not the case. That's why I preferto use the term ‘specialty beer’, because
I think it's more encompassing of what whatreally matters. And that's the fact that the
product is really special. And in China, ofcourse, it's it's all very, very new. So it's
a very complex question, that seems very simple.OF: What is the story of the company in China?
SH (08:20):
It was started in 2006, technically. The first container arrived in 2007, which at
that time for Belgian beer was extremely early,perhaps too early. It took a long time to
build the volumes up. But that, for sure,gave us a very distinct first-mover advantage.
And it was my boss - till today, and my firstboss - named Vincent Smets, he came over actually,
(08:43):
on a government grant called, it’s calledThe Prince Albert Fund. And his goal was to
do a market study of one year on the potentialof the specialty beer industry in China. He
completed that study, he said “You guysshould definitely open an office, and you
should hire me to do it". And…OF: That’s a small conclusion.
It was a smart conclusion. And he did an excellent job. I mean, he… from the very
early years, he was a one-man kind of Spartanoperation. And then slowly but surely, we
(09:09):
grew. I joined in 2012. That was here in Shanghai.And what was interesting about us, we did
our own distribution, which - for many brandowners - is a very rare approach. But at the
time, I think we were so early that the distributorsdidn't want our beer. So our beers were too
expensive, they were too strong, they tastedfunny… You know, people didn't get it. So
(09:32):
it took time for that to kind of catch on,and the market to change. So we decided to
basically create our own distribution network.We were delivering the beer to the bars, we
were doing the sales, we were collecting themoney. It was a very, very labour-intensive
time in the company's history.OF: I mean, it sounds like a startup. And
that's what it was.SH: It was very much so a startup. And it
(09:53):
was a startup culture as well. So when wewould open a new office, for example, we would
hire someone, and this person would do allfacets of the business. On their own, they
would get on a three-wheeled bike, and drivethe five cases of beer to the bar, and deliver
it themselves. Even go install the draughtmachine, clean the beer lines. So that was
(10:14):
the early years. And still today you'll havea bar owner come up to you and say “I remember
back in 2010, when you had a 老外 [lǎowài]here delivering the cases to my door.” And
we got, definitely, a name in the specialtymarket for being so hands-on, so on-the-ground.
OF (10:27):
Yeah. And totally visible, I guess, as well. Especially since, like, it was a foreigner,
in one of these more provincial cities…SH: Right.
…Riding one of those scooters full of beer?
SH (10:36):
Yeah, exactly. OF
how you started in the company?SH: I started a little bit after the most
laborious days.OF: Right.
But yes, I was very much doing a lot of labour aspects of the business. I packed glasses
and coasters into boxes when a distributorwould order. And yeah, it was fun. It was
very fun to look back on. And there's a lotof good times.
OF (10:56):
But that's exactly what I sense when you're talking about it. You know, I can see the
smile on your face, I can see your eyes lightup. You know, that part of the business - when
you're really growing it - the expectationsaren't there either. Like, it's almost experimental,
you can just play, right?SH: That's exactly right. And you wouldn't
think that a global player would start a marketlike that. They were hands-off. They said
(11:18):
"You guys go grow the business. If you needsomething, reach out and we'll try to support
you in any way we can”. And I think that'swhat made it work. So we started, really,
in seven core markets.OF: That seems quite a lot, actually. I think
for you to regionalise so quickly, probablyis not what everyone would have thought that
you should do.SH: Definitely not. That's actually the key
to, I think, the success in the end. It wasthat we were on the ground in seven core markets.
(11:42):
And we were well positioned. So when the marketdid turn - and the big guys started investing
a lot into their specialty beers, and thetrends changed - we were there. And we had
boots on the ground, and we had a marketingplan. That's really what, I think, propelled
us in the last eight years or so.OF: Interesting. And because you were so frugal,
(12:04):
with that mindset, I guess your overheadswere kept low. So you were almost, like, latently
waiting. And then you could start pumpingin more investment later on.
SH (12:11):
Exactly, yeah. But that was a challenge as well, I would say, to switch from that
mentality of being very frugal to trying toget our team to invest in what they had. So
we had a lot of hoarders of our promotionalitems, for example.
OF (12:24):
Oh, what do you mean? SH
sign, a glass, a coaster… But some of thatstuff is pretty expensive. So in the early
days, we were extremely selective. You know,only the best accounts get a neon. And now
we have KPIs for our sales teams that theyneed to go out and give out X neons in the
quarter.OF: Right.
SH (12:44):
So changing that mentality of our team took some time.
OF (12:49):
That's interesting. Can you think of any other examples from those times? Like, you
know, when you would travel around, that costwould add up. But am I right in thinking of
you taking, like, overnight trains? How elsewould you save money?
SH (13:01):
Overnight, not so much. But we definitely had a very minimal travel expense policy.
We always shared rooms, we still do today.We stayed in the cheapest of cheap hotels.
So 七天 [Qītiān] - I don't know if you'veheard of 7 Days Inn, or…? I was a 7 Days
Inn member, 七天会员 [Qītiān huìyuán],there you go. Stayed in a lot of 七天 [Qītiān]s.
I mean it's funny actually you mentioned that,because when we would go to these markets,
(13:23):
we were also trying to kind of ‘fake ituntil you make it’.
OF (13:26):
Yeah. SH
basically take a train to a city where I sawthat we didn't really have much sales. And
I would go around and try to find the barselling any specialty beer, whether it's Hoegaarden
or Corona, anything that's not Tsingtao orSnow. And I would try to find the guy that
sold that beer to them, and try to have ameeting with that guy.
(13:46):
Oh I see, so almost like reverse-engineer what he saw other beers doing.
SH (13:50):
Yeah, exactly. OF
Because we didn't have the contacts. This is after we, kind of, shifted from only our
own distribution, to saying “OK, now wewant to expand distribution”.
OF (13:59):
Right. SH
want this big distribution company to thinkwe were some tiny startup. So I remember in
this one particular city, I would stay inthe 七天 [Qītiān], which was next to the
Shangri-La.OF: Yes.
SH (14:11):
And when the distributor would come pick me up for dinner, I would say just pick me
up at the Shangri-La, I'd walk across thestreet, and wait in the lobby of the Shangri-La.
And then he dropped me off back there at theend of the evening.
OF (14:21):
I love it. SH
Yeah. I mean, this is entrepreneurism. I mean, when I was starting my company, I
used to have this lovely suit, and I usedto meet at these great hotels just like you
did, and then I would, like, around the cornerbe eating, like, a rice snack in the gutter.
SH (14:37):
Exactly. I don't know if I could do it again. But it was… It was a trip, it was
a ride.OF: Yeah. Well, you've said then, there’s
been a challenge now to move away from thatmindset. And now, you do have more budget.
I guess the stress now is that, OK, you’veproven yourself, you've got to a level where
you've got this much growth, what's the nextstage? And you know, what's the next pressure
(14:58):
point? Is that the period of growth that you'rein right now?
Absolutely. I mean, the big lager players are investing heavily into the specialty sector.
So we must stand our ground, we have to defendour market share, grow our market share. So
the the strategy now is invest. Spend. Andspend wisely. We don't just spend to spend,
we try to spend as clever as we can.OF: But in a way, it's a different skillset
(15:21):
for you as a GM.SH: I would say it kind of comes naturally
somehow. I mean, that's what you do when you'regrowing is, you just rise to the challenge.
There are problems every day, and you justhave to try to attack it, you know, whatever
it may be. So marketing is a great example,because digital is extremely complex. It's
kind of a double-edged sword, because it'sthe best bang for your buck, in terms of generating
(15:43):
brand awareness. But there's also a lack oftransparency. I mean, there's these influencers
- KOLs - there’s a lot of fake data.OF: Oh, really?
Yeah. Yes. So you have to be aware of what's happening. It took some trial and error,
for sure. But we learn fast.OF: Let's just define this KOL term, it means…
(16:04):
‘Key Opinion Leader’, so it's an influencer basically.
OF (16:07):
Right. So in China, this is what you need to use to promote your brand? You need to
find the right opinion leader, right?SH: Well I mean, there's lots of different
ways to invest in marketing, but one of thebest channels for sure is through KOLs. It's
just, how to do that in a way that you'restill efficient. And you're not pumping money
(16:27):
into something which actually has a followingof 5 million bots instead of real consumers.
I see, yeah. SH
But we've learned a lot over the years indoing digital marketing, and now it’s…
Now I would say that we have a lot of KOLswe work with regularly, who we vetted, and
we know them, they represent our brand. They'rebasically our brand representatives now, even
(16:49):
though they're obviously third party influencers.But it's very impactful, and the reach is
incredible.OF: And this is - I mean, I'm guessing - the
thing that keeps you most up at night. Itis the marketing piece. How do you spend that
money? How do you even justify it? And howcan you track, what you're spending has what
effect, right?SH: I mean, definitely, that's where our biggest
budgets are. I think also, innovation is abig one. Because I don't drink what my dad
(17:14):
drank, you know.OF: Right.
SH (17:15):
And my dad doesn't drink what his dad drinks. So the market will change over time.
And we're very aware of that.OF: Yeah, you say innovation, it makes me
ask, are there any types of beers or flavoursthat you find here in China that you perhaps
wouldn't find elsewhere?SH: In terms of specialty beer, the biggest,
by far, is wheat beer. But now, in the lastfew years, we've seen a lot of fruit beer
(17:37):
as well. So in addition to Vedette Extra White,we've launched Vedette Extra Rosé, which
is white brewed with raspberries. So I meanthat is a huge trend right now, is to sweeter
fruity wheat beers and other fruit beers.OF: Which strikes me as being a Belgian thing,
like, I think of those beers being big inBelgium. Can I say it again? Those beers being
(18:01):
big in Belgium.SH: Yeah, I mean, there's definitely a history
of fruit beer in Belgium. So they had thefirst advantage, the Belgian fruit beers.
But you also have a lot of craft brewers herethat are brewing some excellent IPAs and other
unique styles as well. So it's coming. It'sjust, it's a process. For today wheat is,
(18:23):
for sure, the most powerful sector.OF: And who is your consumer? Like, do you
have a particular demographic that you aremarketing towards? Or who just happened to
be the ones who like your beer?SH: Generally, it's younger people. I mean,
it's early 20s to late 30s. Our female demographicis actually quite strong as well. But yeah,
(18:44):
it's young people who are, kind of, lookingfor something better. It's affordable luxury.
OF (18:49):
Right. Right, this is it, because it's a premium beer, but it's not such a huge leap
to go from a bog-standard beer to your beer,right?
SH (18:57):
Right. In a shop, you're buying it at 16-25 块 [kuài]. I mean, it's not gonna
break the bank. But you can appreciate someof the best beer in the world, for that affordable
price.OF: Nice. And, you know, you have gone through
so many changes. What do you see as the future?SH: Yeah, it's a good question. I mean, I
(19:17):
think that it's so hard to leave China. Thegrowth, the energy. I love the city, I love
the people. Yeah, so we'll see. I mean, fornow, it's a growth story.
OF (19:27):
Yeah. And why not continue riding that wave while it lasts, right? Riding a wave
of beer.SH: Exactly.
That would be a dream to some people, less so for others. Thank you so much, Sean.
Now let's move on to Part 2.SH: All right, let's do it.
[Part 2]SH: 10 questions, let’s do it.
Are you ready? SH
(19:48):
Am I ready? Question 1, what is your favourite China-related fact?
SH (19:53):
My favourite China related fact… There's so many, the easiest thing is to do with the
scale of the country. This is maybe less truetoday after COVID. But a few years ago, China's
economy was growing at the pace of one Australianeconomy every year.
OF (20:10):
Oh wow, yeah. It's always interesting when you make that like-for-like comparison,
you know.SH: Yeah.
Because your mind can't really understand the scale.
SH (20:16):
Yeah. “What does GDP growth mean?” OF
“It means one new Australia!” OF
this is, like, five football fields’ worth.”SH: Yeah, you can conceptualise it a little
bit. Yeah, exactly.OF: Australia-size…. Question 2, do you
have a favourite word or phrase in Chinese?SH: Let’s think. I think the one I really
like is, it's a phrase (20:35):
车到山前必有路 [Chē dào shān qián bì yǒu lù]. Before
the car reaches the mountain, there must bea road. Which I think is really relevant here,
because things are often not that easy, butif you do keep pushing and you keep going
for it, usually you will find a way. It reallyspoke to me when I first heard it. And it's
(20:55):
simple Chinese. I mean, it's not complicated.It's not like one of these four-character
成语 [chéngyǔ]s which you have to reallyknow the story behind it. It's very direct,
and it speaks to me, so I love that one.OF: Yeah. And is it fatalism, where the road
will suddenly appear? Or is it that you haveto make the road?
SH (21:12):
To me it says “just keep going”. If you just keep driving, you keep going, the
road we'll go through.OF: I like it, thanks so much. Never heard
it, I'm going to use it.SH: Please do.
OF (21:23):
What’s your favourite destination within China?
SH (21:25):
It's such a big country, so… OF
I've travelled a lot in China. I've been to most of the provincial capitals at this
point. There's definitely more beautiful placesin China than 莫干山 [Mògànshān], but
to me it's kind of a sentimental place. Imean, we've had a lot of our annual company
meetings there with our management team. Wecook together, we run together through the
(21:49):
mountains, we do walks, and we create thenew strategy for the new year. I also go there
with my friends, on weekends to get out ofthe city. To me, it has a very special place
in my heart. I mean, now it's getting so builtup, which is a bit of a shame.
OF (22:02):
Yes, yes. People like you keep talking about it, man.
SH (22:03):
I know, I know. And now I'm sitting here saying it on podcast, which isn't helping
my case I guess. Whatever.OF: If you left China, what would you miss
the most? And what would you miss the least?SH: What I would miss the most is the energy.
I think I mentioned that in our chat. It'sjust so powerful here. If you push, and you
have a great product and a great plan, andyou put it to action, things can happen. And
(22:27):
people work hard. And it's fun, it’s addicting,that sort of energy where you feel like anything's
possible. Then the other side of that questionis, it's got to be the pollution. And it's
not only the air pollution. For me, it's alsothe noise pollution.
OF (22:44):
Oh right. SH
to call that ‘the birds of Shanghai’,because you don't hear birds that often but
you do hear that power drill frequently.OF: But those two things that you've said…
you don't get this energy, this growth, thismovement, without the sound of a growing city,
right?SH: Exactly, and that’s why I'm still here.
It evens itself out, you know, it's all worthit.
(23:04):
Is there anything that still surprises you about life in China?
SH (23:07):
I mean, every day, yes, absolutely. That's also one of the things I like so much about
living here. But recently, top of mind isfor sure eCommerce. The power in reach of
a channel that's so new. And how quickly everyone,it seems, has adapted to it. Regardless of
age, I mean, everyone is buying online, itfeels like.
OF (23:28):
OK, next question. What is your favourite place to go out, to eat or drink or just hang
out?SH: So I'm a 静安 [Jìng'ān] guy. I've
lived in 静安 [Jìng'ān] most of my timein Shanghai, it’s a district downtown. And
our office is right at the crossroads of 武定[Wǔdìng] and 胶州 [Jiāozhōu] which you
know. We were very lucky to choose that location.We moved in there in 2011, at that time, there
(23:50):
was no bars on that street. And fortunatelyfor us, they kind of built the road around
us somehow. Being a beer company, we havea lot of clients on that street. So we'll
pop down to Malabar and have a beer there.OF: Malabar.
SH (24:03):
But there are a lot of places I could mention to go have a good beer. I also love
The Rooster, I love Café des Stagiaires and…But it's countless, I mean, being connected
to the F&B industry.OF: Yeah. Well, I like Malabar, because that
has a nice interesting link to Angie Wu fromSeason 01, who said the same bar.
Oh really? OF
OK. OF
(24:24):
OK yeah, it’s a great place. OF
made in China?SH: The best purchase… I’ve listened to
some of your podcasts. And I was really tryingto think of something different. But there's
no better answer than the scooter. I mean,the scooter is…
OF (24:38):
Oh right SH
since I first arrived, and it's one of myfavourite things to do, just to ride around
the city on my scoot. My fiancée also hasa scooter, and we love to cruise. It’s amazing,
especially when the weather's nice.OF: What a beautiful, romantic image you’re
giving me. Actually, I'm not even on Mobikesnow, I just walk everywhere.
SH (25:00):
Wow. Yeah. OF
OK, he's getting his phone out. Let me justcheck mine.
I don't know why I love this sticker, but if you talk to my colleagues, they will
say that I certainly overuse this sticker.It's Denzel Washington in Training Day, and
he just says “Boom”. I don't know why,it just makes me laugh. And when you get good
news at work, or something happens, whereyou know, you land an account and… Yeah,
(25:24):
to celebrate a bit, just give an old Denzel“boom”.
OF (25:26):
OK, I'm gonna use this one. That's a great one.
SH (25:29):
It's also a great movie, if you haven't seen it.
OF (25:30):
I haven't seen it. SH
It’s an action movie, is it? SH
OK. SH
What is your go-to song to sing at KTV? SH
But I'm not great at KTV, I'm not the starof the room by any means. If I have to sing
(25:54):
- and I will sing - I do like the… I usedto very much like the… Red Hot Chili Peppers,
and the range of the lead singer Anthony Kiedis,he doesn’t get too high or too low.
Ah right. SH
embarrassing yourself. Maybe ‘By the Way’,if I have to choose one.
And finally, what other China-related media or sources of information do you rely
(26:18):
on?SH: I was actually just this morning listening
to the new Sinica Business Brief.OF: Right.
SH (26:23):
I think it's a weekly podcast. It's like 20 minutes, and it just updates you on, kind
of, all that's happening in the world of Chinabusiness. I also read Axios on China.
OF (26:35):
Right. SH
great.OF: Interesting.
SH (26:40):
So that's two great sources of China news for sure.
OF (26:43):
Yeah. Well, thank you so much, Sean. I mean, as I said at the beginning as well,
like, I'm not a beer drinker…SH: Let's have one beer together, and then
maybe you can reassess.OF: Done.
SH (26:51):
OK. OF
you one final question. Who, out of everyoneyou know in China, would you recommend that
I interview for the next season of Mosaicof China?
So many options. But I think a really cool story is the story of Peddlers Gin Company.
OF (27:08):
Right. SH
Fergus. And they're creating something I thinkis really impressive. It's a great quality
product. Still the alcohol industry, but different.It'd be a cool story, I think, for everyone
to learn.OF: That's great. Well maybe, that is the
equivalent story in the world of gin as youare in the world of beer.
SH (27:27):
Yeah, it's a startup story, for sure. OF
Thank you, Oscar. It's been a pleasure.
[Outro]OF: So first things first, where’s the discount
I mentioned? For this one you’ll need tobe in one of the WeChat groups for the show.
I’ve posted a special QR code there, whichyou can scan to open the miniprogram. And
(27:47):
from there you can then upload a photo toprint on a 6-pack of any Vedett beers, and
you’ll get a 30 RMB discount voucher ontop. Cheers!
Also in the WeChat groups, and on the mosaicofchina.comwebsite, you’ll find the images alongside
today’s episode, including photos of theDuvel Moortgat team in Moganshan and elsewhere;
(28:10):
one of Sean’s boss and predecessor Vincentinstalling a neon; and one of Sean and his
fiancée out and about on their scooters inShanghai. Incidentally, there were four people
from Season 01 who chose their scooters astheir best purchase in China, and one of them
was Jorge Luzio, the China head of Marketingfor the Sprite band at Coca-Cola from Episode
(28:31):
05. Sean touched on the topic of digital marketingin today's conversation, but if you want to
hear more, please listen to that episode withJorge. There’s also a secret digital marketing
connection between Sean and Stéphane Wilmetfrom L’Oréal, who featured in Episode 01
of Season 02, the secret being that you canonly hear that part of Stéphane’s chat
(28:53):
if you’re a Patreon subscriber. Here area few clips from today’s extended interview
over on Patreon with Sean…
[Clip 1]SH: We ended up staying in Hong Kong for five
weeks with, I think, three cancelled flights.OF: Oh right.
[Clip 2]SH: We’ve worked with him this year, and
the scale is unbelievable. 30 million peoplewatching.
[Clip 3]SH: We’ve worked with a lot of different
(29:14):
live stream sellers. And what we've realisedis, it's the big ones that actually do the
trick.[Clip 4]
We’re a young group. I think our average age is around 32. And that's my age as well.
So yeah.OF: Really?
Yeah. [End of Audio Clips]
And that’s all for today. Mosaic of Chinais me, Oscar Fuchs, with artwork by Denny
Newell. Stick around for the catch-up chatwith Simon Manetti from Season 01 Episode
(29:36):
17, and we’ll be back again this time nextweek.
[Catch-Up Interview]OF: Hello, Simon.
Simon Manetti (29:47):
Hi. OF
the hell are you?SM: I'm tired. I've been off coffee now for
maybe 12 days. And it's hard. And I've beenoff booze since - just checking my watch - for
(30:08):
eight days. And that's less hard. But nowit's the weekend. So it's a true test.
OF (30:11):
Oh, that's right. So this is a January thing for you, is it?
SM (30:16):
Yes. OF
Thanks. It is Friday afternoon. First week back at work. Negative 4 degrees. So
it's a tough time.OF: It is. Well, let's start there, then.
So you said that it is the end of a long weekof work. And that's one of the changes that
I know has happened since our last chat.SM: Was it not mentioned at all last time?
(30:38):
No, maybe not. So I'm now Managing Directorof Ritter Sport China, the wonderful German
chocolate company, that is very well representedin many expat stores in China. So it massively
over-indexes amongst the expat community,but we need to grow among the true heart of
(30:59):
China. Things like localising the brand, gettingthe portfolio right. And this Ritter Sport
family cares very deeply about their impacton the world through the company. The company
they see as something that was gifted to themthrough inheritance, and it is their opportunity
to do good in the world. So chocolate is actuallyjust a vehicle to do good in the world. And
(31:22):
every company you join will tell you “You'vejust joined a family”, and they will say
they care about you, and that they have apurpose and a vision. But having been on the
agency side, I've advised so many of thosecompanies on how to structure their vision
and their mission, and it’s all so synthetic.Whereas you come to a company like Ritter
Sport, and you see it. There is an authenticvalue system driving this company. So that
(31:45):
has been an extremely motivating and rewardingexperience. So I’m - though I look exhausted
- I'm in a very, very happy place.OF: Nice. But I don't want to go into the
chocolate industry. What I want to latch onto is the word ‘family’, because that's
another big change that we've had since ourrecording. What happened?
(32:05):
So I have a baby boy, Louie Edward Manetti. Quite a mix of culture there. And I have a
wife that is five months pregnant.OF: Dude.
Yeah. OF
Yes, yes. OF
your life gets even more into a turmoil. Sowhat were you doing in the last year over
(32:29):
COVID?SM: So, I was off to New Zealand for a wedding
over the Chinese New Year period. And thensay, by Feb 6 or so, flights were cancelled,
and we had to make a new plan. So ended upwith all of our summer gear, flying directly
(32:50):
into the depths of winter - I should say,the tail-end of winter - in Europe. And I
spent the next nine months in my mother-in-law’spolo shirts. Because my mother-in-law is the
sweetest woman alive. I feel bad about sayingit, but honestly, we had the most incredible
(33:11):
2020.OF: Right.
We were so lucky because we were staying in Talloires, which is near Annecy. You're
surrounded by beautiful nature. It's France,so food and wine is spectacular. We were really
really lucky.OF: I'm just going back to our original episode,
and I'm thinking about what you said aboutwhat you would miss the most and missed the
(33:32):
least, if you left China. And you did leaveChina. So I wanted just to check on you and
to see, was that true? So what you said thatyou'd miss was the optimism of China. Because
whenever you go to Europe, it’s all grumpyand negative. And then what you said that
you'd missed the least is when the internetdoesn't work properly.
Hmm, interesting. So optimism, definitely true. But when you move into the house of
(33:58):
another, what I really missed was being ableto be selfish, and…
OF (34:02):
Impolite, basically. SM
And that would, kind of, build up. And inthe end, I didn't get to see so many people,
because we were in lockdown. So I only sawthose immediately around me. So yeah, I can't
say that I tested that one. In terms of internet,I actually had a lot of problem getting stable
(34:24):
internet in France as well. So both of thosehave been dispelled, really.
Interesting. SM
On that note, let me say thank you again for coming in. It's great to see you, to have
a catch up. The person who recommended forSeason 2 actually couldn't be part of the
season, but I found a good replacement. SoI will be posting this conversation at the
(34:48):
end of that episode. But I'm very happy thatthere is an excuse for us to be in the same
room again, and I hope we have another excuseto do it again in the future.
SM (34:57):
Me too. OF
Popular Podcasts
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Therapy Gecko
An unlicensed lizard psychologist travels the universe talking to strangers about absolutely nothing. TO CALL THE GECKO: follow me on https://www.twitch.tv/lyleforever to get a notification for when I am taking calls. I am usually live Mondays, Wednesdays, and Fridays but lately a lot of other times too. I am a gecko.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.