A healthy thirst
The craft beer industry has seen robust growth in recent years despite a generally shrinking beer market as win makes inroads.
The Olympic Games and an unusually scorching summer should have provided a big boost for major beer companies, not least for craft beers who are emerging, it seems, stronger, swifter and faster.
The craft beer industry has been experiencing robust growth in recent years despite a generally shrinking beer market as wine makes inroads. TheNational Statistics Bureau announced last month that for the first half of 2016, China produced 22.51 million tons of beer, down by 8.36 percent year-on-year. The industry has recorded falling production, up to June, for 24 consecutive months.
In contrast, imports of craft beer have soared almost five fold over the past three years. In June, Chicago-based breweryGoose Island was officially introduced into China through Anheuser-Busch Inbev, which acquired Goose Island in 2011.
The domestic craft beer market is facing severe competition. US craft beer tavern franchiseWorld of Beer opened its first overseas outlet in Shanghai, on a bustling neighborhood street next to Dr Beer, a local brewery and bar.
“Craft beer drinkers in Shanghai have reached a sophisticated level. For instance, they give us tips such asRussian Imperial Stout should be kept out of refrigerators in order to maintain its rich flavor,” said Yin Cong, market development partner with World of Beer and the CEO of Shanghai WOB Restaurant Management Company.
The 31-year-old native of Sichuan became emotionally and physically “addicted” to the first WOB outlet in Tampa, Florida where he worked with a local IT company. Inspired, Yin then decided to introduce the concept to China.
“The craft beer scene has just started to emerge in China, and the number of craft beer enthusiasts has been increasing. Because of this enthusiasm, and World of Beer’s proven and successful model, we knew the concept would be a perfect fit,” he said.
Founded in 2007 by two close friends, World of Beer started as a humble neighborhood bar with an unusually extensive offering of craft beers. By adding different types of craft beer found from literally all over the world, it is now seen as the curator in the industry and has about one hundred franchises in the US.
The spacious Shanghai outlet has been decorated in a style resembling the original in the US. Some 400 types of bottled beers are arrayed in the six-door coolers, plus another 41 craft beers are on tap.
While more than half of the offerings are from established brands or breweries around the world, the Shanghai outlet has also some local brews, includingMaster Gao, one of the earliest craft beer brewers in China, based in Nanjing, Jiangsu province.
Gao Yan, founder of Master Gao, estimated that there are upwards of 60 craft beer breweries in China now.
“The oversupply of industrialized beer in China has led the (central) government to adopting a rather strict policy about allowing craft breweries to operate. But still, we have seen a growing number of brewers especially in big cities,” said Yin, adding that the quality, though, is still quite low.
Yin noted that the company is planning to open another three taverns in China by 2018, and a second one in Shanghai.
“Shanghai is like the testing ground for food and beverage. If you don’t succeed here, you are hardly going to make it elsewhere in China.’’
Competition has been stiff. Aside fromWestern restaurants, bars and supermarkets, a local grocery store operated by a Shanghai businesswoman, who has been lovingly nicknamed “Beer Lady” by the expat community, has a whopping collection of 200 types of bottled beer.
But Yin is confident that the market is large enough to have “more beer ladies”.
Euromonitor estimated that in 2015, China’s high-end beer market, which is mainly dominated by craft beer, increased by 20 percent, but this still accounts for just two percent of the general beer market.
Average beer consumption in China is 34.2 liters per year, slightly higher than the world average of 33 liters. But analysts predict that tastes are about to change with more opting for more refined and expensive beer.
And by 2017, China is likely to overtake the US as the world’s largest consumer of beer, according to Euromonitor.
“The way young Chinese people enjoy beer is so different from their parents’ generation,’’ Yin said, pointing out that beer is drunk in larger glasses and quantities today.
In fact, young Chinese are not only displaying a growing interest in sipping craft beer, but also brewing their own beer.
Li Wei, president of the Beijing Home Brewing Society, estimated that more than 20 provinces and cities now have their own societies for homebrew lovers, and the number of homebrewers is estimated at more than 10,000, about one-sixth that of the US.
The way young Chinese people enjoy beer is so different from their parents’ generation.” Yin Cong, CEO of ShanghaiWOB Restaurant Management Company
Tsingtao beer is appreciated by thirsty customers during the International Beer Festival in Qingdao, Shandong province, in August.
Craft-beer breweries are enjoying growing demand for their products. Pan Dinghao (left) casts a critical eye over his brewery’s output at the Panda Brew in Yiyang, Hunan province. He founded the venture in 2013.
Craft beer stored in theJiuhuaer Co in Shanghai. The firm runs China’s first craft-beer app.