According to Hai Tong Securities research report, the craft beer market in China is growing rapidly and the gross margine and net profit margine in this sector amount to 50% and 30% correspondently. This is much more than the producers of the traditional bottle beer earn.
No wonder that in the conditions of sales decline in the industry, a lot of brewing businesses including the market leaders paid attention to this sector and started producing crafty style beer.
Tsingtao Brewery’s Laoshan factory has been in craft beer production since the end of 2015. Beer Tsingtao is currently supplied to bars in 16 communities.
Zhuajiang Brewery, belonging to AB InBev by quarter invested 250 mln yuan into building of new production lines for craft beer filling in Guangxi, east Wan, Zhanjiang, Hunan. In May 2015, the company launched high-end market for the Fort Snow – Craft series including puree beer, dark beer, and red beer.
Yanjing Brewery is also investing a lot of efforts into the craft beer development.
While the major beer players are striving to develop the niche which is new for them, in the central cities (Chongqing, Beijing, Shanghai, and Tianjin) the craft brewing is thriving. In Beijing the most popular brands are minibreweries Panda, Cow Beer Hall; and in Shanghai Boxing Cat Leybold Fresh Beer, Tap House Workshop, and pub Wuhan No. 18 are most demanded. Equally high interest among the Chinese is enjoyed by Nanjing High Master, Chongqing Fung Rudder, Chengdu Harvest, and some other brands. Even Tibet and Ningxia have their a craft of their own.
Panda Craft Beer is surely an unrivaled leader in the Chinese craft beer market, with its 20 mln yuan sales revenue and the annual natural volume of 1 mln liters of beer. The brewery’s regional offices are located in more than 50 cities throughout the country, and the company is far from being complacent.
Panda Craft is striving to increase the number of outlets in big cities like Shanghai, Shenzhen and Chengdu and to woo tourists of Dali district. The craft brewing development is equally prospective both in big cities and in third-tier cities (medium-sized cities of each province). However, Chinese consumer awareness of craft beer is not clear. Few Chinese actually know what craft beer is. Besides, the local craft brewers still have to improve the branding marketing strategies in order to be able to compete with import beer like Goose Island Beer.