Analysis of beer market in China (on Russian)
Beer market of Ukraine: big three losing weightIn 2016, fast increase of excises and resulting price spike stood in the way of the beer market stabilization. Most of competition (as well as mass sorts) moved to the economy segment of the market. The biggest losses were incurred by the leading three, especially Obolon, which again experienced pressure after reallocation of Efes market share. However, one should already speak of TOP-4. Group Oasis CIS (PPB) became a strong player and competitor to transnational companies. Besides the net sales of many regional medium breweries look rather good and 16-fold cost reduction wholesale trade license for craft brewers opens up a possibility of rapid growth in 2017.
Analysis of beer market in China
China’s transition to a “new normal” reality backfired on the brewing industry unexpectedly. Stagnation and subsequent market decline resulted from dynamic social and economic changes. There has emerged a “two speed” market where the medium class significance is growing, yet the share of main beer consumers, “blue collar” is decreasing. Also the inflow of consumers is shrinking, as demographics stopped being a growth driver. Finally, beer is giving way to other alcohol drinks....
The Rising Upper Middle Class Vice of Craft Beer Infiltrates China
The bitter and rich taste of craft beer is becoming increasingly popular in China, where local brands flourish and a recent trend is drinking an Anglophile “ale” or a “lager” with a “bitter” touch.
Carl Setzer, event organizer and founder of the beer brand Great Leap, explained to EFE that the aim of the festival is to give Beijingers a taste of the beer market offerings outside of Beijing.
Setzer was one of the pioneers of the craft beer business in Beijing.
His business model is based on integrating flavors and Chinese names in the production of this elaborate drink.
The names of his beers play with terms or stories from traditional Chinese culture, such as “Iron Buddha,” the “Little General” or “Imperial Pumpkin,” as well as incorporate hints of spices, exotic fruits and local tea.
The rising Chinese middle class, its purchasing power, and its attraction to Western trends of consumption, seen as modern, are some of the factors that explain the rise of such beverages.
Chinese business people or exchange students have already experienced some of these trends, for example, in the United States, birthplace of the microbreweries or craft beer.
According to the UK’s Department for Environment, Food and Rural Affairs, China is the biggest global consumer of beer, with more than 54,000 million liters put back per year, followed by the U.S. with 24,000 liters, and Brazil with 14,000.
Even so, if one looks at per-capita consumption, the level is not very high, since Asian countries such as Japan, South Korea and Vietnam take more interest in these bitter drinks.
This factor makes the beer market in China “less mature,” Chandler Jurinka told EFE.
Jurinka is the creator of the Slow Boat brand – one of the most famous in China – giving the business a “competitive advantage” of being able to aspire to higher sales, something that would be difficult in countries where beer consumption is already steady.
“Our best selling beer is the Monkey Fest. It is strong, bitter and with hints of mango and passionfruit,” said Jurinka, who, like the most entrepreneurs venturing into this business in China is a foreigner, and reveals with pride that his new project is to create a lychee-flavored beer.
Preparing craft beers “with Chinese characteristics” is typical in this business – which has spread to major cities, including Shanghai – but there are also brewmasters that deviate from this trend.
Thomas Gaestadius and Will Yorke, a Swede and an Englishman, after working as “house” music DJs in Beijing clubs, and craft sausage-makers, began brewing their own beer by watching videos over the internet and using cooking pots.
“We don’t want to do things just to make ourselves clever,” they told EFE, and criticized the “temptation” of using Chinese flavors or ingredients in every beer of its brand Arrow Factory.
For now, most of their customers are foreigners – “the Chinese come later,” they said, ensuring that they will not change their style to offer “Chinese packaging” to the products or add an exotic ingredient to every beer: “anyone could put grapefruit in a carbonara sauce,” they said laughing.
They are not afraid of being labeled as “simple” or “less Chinese,” and compare brewing beer with making electronic music: “If you do something good, people will come.”
1 Mar. 2016