In recent years, China has seen a noticeable shift from mass-market, low-alcohol content beers to more premium and craft flavors among its consumers. The country’s growing middle class, backed by their rising disposable income, are happy to spend more to experience something unique and new in their alcoholic beverages. As the demand grows, opportunities are opening for both domestic and foreign craft brewers.
China’s Craft Beer Market
Though still far from upstaging beer giants like Tsingtao and Yanjing, craft beers in China are quickly becoming popular, especially among young consumers. Small breweries are opening up in major metropolitan areas like Beijing and Shenzhen, eager to cater to the growing number of drinkers. Even foreign companies like Anheuser-Busch InBev (AB InBev) has aggressively been expanding its offerings to capitalize on China’s promising market.
Many Chinese consumers, especially Millennials, have developed a taste for stronger and more flavorful craft beers. Based on market sales, the slightly fruitier, sweeter brews are more well-received than others. Panda Brew, a local microbrewery, claims that the strong honey aroma of its craft beers makes it appealing to many Chinese consumers. Meanwhile, when it comes to packaging, those with creative and illustrative designs appear to be more attractive to buyers.
Opportunities and Challenges
China’s craft beer culture is still young. Despite the influx of foreign and domestic brewers in the country, competition is still relatively low. Consumers outside tier 1 cities remain unaware of the differences between craft and mass-produced beer, but this is slowly changing. Brewers have been hosting festivals and tasting events to educate more drinkers on the different flavors, styles, and types of beer.
One huge challenge for foreign companies is the craft beer’s shelf life since they are best served as fresh as possible to get the full impact of the flavor. Many of them have invested in upgraded infrastructure to maintain their product’s freshness and taste. In recent years, China has also been improving its storage facilities to better accommodate more alcohol exporters. This allows businesses to enter the market without the need to open their own brewery.
Parting Thoughts on China’s Craft Beer Market
Craft beer in China is still a new industry, but it holds huge promise to many beverage makers. Market growth is expected to be at 30% every year until 2020. As Chinese’s taste for beer becomes mature and more diverse, they will continue to look for high-quality, more flavorful options in the market.
To have better chances of succeeding, foreign companies planning to sell in China must understand the Chinese market and the consumer’s preferences to offer fresh flavors and innovative product packaging that fit the Chinese palate and hook their ideal costumers through smart engagements.